Auto Renewals: A Bad Telecom Legacy

Posted by Mark Greim on Feb 3, 2015 11:12:00 AM

As a business, you're excited about the opportunity to evaluate new technologies and drive benefits to your organization.  After all, a Hosted VoIP system is becoming commonly accepted as not just the technology of the future, but of the present.  Your peers in your industry are moving to these services and they come highly recommended.  You've calculated the benefits to your business, determined your return on investment, and selected your new hosted VoIP provider.  Now, you turn to your existing telephone service and, after struggling to even find the right person to talk to, find out that, BAM, your service was auto renewed for another year!Term_Contacts_bad_for_Phone_Service

This is not a story presented merely for effect.  It is a reality that occurs every day.  As telecom companies desperately hang on to their old, analog technologies, they rely upon the shackles of term contracts and the dreaded, insulting, and gutless auto renewal to keep their customers hostage.  We'll set aside the question of the auto renewal for a moment and discuss the other bad legacy at play here, the term contract.

How are businesses convinced that a term contract for their telecom services is a good thing to begin with?  It's all about feeling like they are getting the best deal.  First, they are presented with the merits of a bundle of services on a single bill, albeit a confusing bill.  Then, they see that the overall price is reduced for the bundle for each year tacked on to the term.  They sign the order, and all is good.  But, is it?  Many times, the order signed references terms and conditions that are not attached, but available on line.  These terms are rarely reviewed and certainly not negotiable.  Typically, they are not discovered until the business is ready to make a change or when their agreed upon pricing increases during the term.

Most businesses in this situation are usually of the belief that they are out of term and free to make a change or negotiate a renewal.  After searching hard and actually finding someone who can effectively answer questions regarding their service, they discover that their contact auto renewed for another year a month ago without any notice or warning.   Following the example above, they are shocked that such terms existed in the first place.  Telecom companies claim that they are doing the business a service in that they are staying with their current bundle price and didn't revert to a higher, non-term price.  However, all they accomplished was to further drive dissatisfaction with the situation and shackle the customer to one or more years.

It may be deemed to be a little indulgent that this message is being crafted by a company who doesn't believe in term contracts and has a clear philosophy of earning our customers' business every day.  Perhaps, but we literally run into this exact scenario each day when working with businesses who are ready to invest in VoIP technology.  It is a sad situation and a bad legacy of the industry, one that needs to change.

What should your business do?  First, evaluate your current telecom contracts and seek out the specifics of your term.  Then, you will at least know your options and the time frame in which you have to either seek out alternatives or attempt to negotiate a renewal with more favorable terms.  With the rate of exodus from traditional telecom providers, they may be more flexible in the future when it comes to term and price negotiation.  If you don't want to bet on that becoming reality, examine your alternatives and what new technology from new providers can provide your business.  Many offer no contacts, clear, competitive pricing, and cutting-edge, but affordable technology.  Your business deserves to be free from the shackles of term contracts and auto renewals!


About the author:  Mark Greim is the Vice President of Sales and Marketing at sipVine, a provider of a variety of VoIP phone solutions and services. Mark has extensive experience working for start-up or entrepreneurial organizations and has a passion for affordable, reliable, and purposeful technology solutions in those environments. 

Topics: Changing Phone Service Providers, Moving Phone Service

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