How often has a carrier account manager conditioned a particular response to you around what he or she "can do" or "has to do" in light of corporate directives? Pretty often, I bet. Carriers find it convenient to tie the hands of their people in the field around various sourcing and operational requirements -- or at least let account teams give the impression that their hands are tied.

Keep that in mind the next time you're dealing with the mixed blessing of a corporate directive from your company. Obviously many telecom buyers are hearing demands from senior management for specific and immediate cost savings -- a double-edged sword that can lead to manipulation by carriers when these demands come out into the open. But you may also be dealing with a new set of additional mandates rooted in the pressure that companies feel to standardize the procurement function in today's economically stressed environment.

These mandates come under many names and cross the boundaries between sourcing and ongoing operations. You may have a "Supplier Governance" process that you have to instruct your carriers and equipment vendors to follow. There may be a set of "Procurement Compliance" procedures that you receive from higher-ups and must be satisfied. You may now even have a "Chief Procurement Officer" to deal with, to go along with the demands of CFOs and other top executives.

Even if you don't hear these terms in your company, you may be part of an over-arching IT organization with a steadily increasing diet of standard demands that alternately assist and hinder you in your job. Some companies even try to force standardized IT agreements onto the telecom process -- misunderstanding the unique structure of telecom agreements and making it more difficult to include critical, telecom-oriented terms and conditions.

Of course, IT organizations are also very concerned about data security, both in a generic sense and in terms of industry-specific mandates that derive from legislation in the healthcare, banking and other fields. But sometimes, generic IT requirements just impose an additional layer of bureaucracy and makework in the supplier-user relationship. These extra requirements can present a mixed message about priorities to your key suppliers when they overwhelm the process.

The key here is to harness these "facts of life" in today's environment to your advantage, instead of letting them control you. One way to harness them is to let suppliers know that both sides of the negotiation are operating under mandates, so their mandate isn't the only one that counts.

Take the issue of billing. Companies love to standardize terms for their accounts payable, and they often pressure their managers (such as you) to enforce them with all their vendors. Up to a point, that's a great help. Carriers need to be told not to require silly terms, such as 30 days to pay a bill after a "bill date" that they arbitrarily assign and may not represent actual delivery of the bill.

But telecom billing platforms do have notorious built-in legacies, and some enterprise-wide billing mandates can have the counterproductive effect of forcing a demand into RFPs that none of the bidding carriers will accept. That leaves you without an effective stick to meet your company's mandate. It's an example of what can happen when a mandate controls you rather than you utilizing it to your advantage (such as putting yourself in a position to negotiate the carrier rep away from his or her company's mandate).

The bottom line is that you can't wait until everyone's gathered around the negotiating table to start whining about what bureaucratic checkpoints you need to fulfill. Determining requirements up front in a competitive RFP (or other initial sourcing communication) helps settle what sort of mandates you will need to get from carriers even if they aren't core to the telecom process, and where you are willing and able to go to the mat for a particular requirement.

Do this work up front, and you'll be better prepared to "trade points" with carriers and their actual or perceived corporate requirements. In the end, it'll make it far easier for you to put the energy of the procurement on the core pricing, service levels, and key terms that you know you need for your network rather than let the process get overwhelmed and sidelined by other issues.

One of the shocks that people often get with their first stock market investment is finding out what a stockholder really is. People often buy stocks thinking they're getting a "piece of the pie" along with the other stockholders. But that's only true if the company doesn't owe anybody any money. Debt holders go to the front of the line, way ahead of stockholders. If there's no pie left after the debt holders finish eating, then the stockholders are out of luck, no matter how good the company's story is or how innovative its products appear to be.

When you a sign a term contract with a carrier, you should think like a bondholder. Do you deserve service ahead of the stockholders? Of course you do. In fact, your term contract with a vendor creates one of the many layers of obligations that it holds ahead of the need to pay off stockholders. But if it can't pay off the bondholders, your carrier's performance is bound to suffer.

In recent months we've begun to see a gratifying upsurge in the number and quality of proposals from telecom carriers other than the AT&Ts and Verizons of the world for specific enterprise-class services. Many are getting their bearings around new services like SIP trunking and related, fully integrated voice/data networks over very high-capacity lines.

But more often than not, these carriers have sorry-looking stock charts that seem never to have recovered from the tech/telecom bust of almost a decade ago. Or they have strange financial histories littered with bankruptcies and buyouts by unfamiliar entities that seem to come out of a dark corner of Wall Street and have nothing else to do with telecom. That naturally makes these carriers a difficult sell within your organization.

You and your management have a right to be suspicious of carriers that look bad in the stock market, but this suspicion should lead to further investigation. Instead of tossing out a carrier because of its stock chart, a bond-like analysis is often a better idea. But it's tricky. Once you know how much debt a carrier has, what does it really mean? What do you compare it to -- the carrier's revenues, operating margins, profits, or what?

For enterprises, the key is the connection to the term of the contract you're being asked to consider. In a way, signing a three-year contract with a carrier is like issuing a three-year bond to the carrier. Just as the bondholder must be paid back in three years, you must receive service for three years. In fact, whatever the length of contract is before you, it's probably best to add one year to the deal for the purpose of this analysis, in order to account for ramping down the old service after awarding a replacement service to a new carrier.

At the upcoming Telecom Negotiation Conference in Washington, I'll be presenting some bond-maturity charts for carriers. Instead of showing the gross level of overall debt, these charts show on a year-by-year basis the amount of debt maturing in given years like 2012, 2013, 2014 and beyond. Making sure your contract expiration comes before a year with a large "balloon" in your carrier's debt is a good idea.

It may even be a good negotiation tactic to have this specific information in hand. But year-by-year debt maturities often have to be calculated from individual bond disclosures by companies in their SEC filings. It's not as easy as going to one of the popular financial websites and looking up a chart, as it would be if you were just looking at their stocks!

Be aware that actually having debt is not necessarily worse than the situation that some other carriers are in -- having no debt because of a past bankruptcy, but also having very concentrated ownership because of the way they were brought out of bankruptcy. That's another trade-off I'll be discussing in my breakout session, called "The Status and Prospects of the Telecom Providers."

See the full Telecom Negotiation agenda for details. Along with the rest of the TC2 and LB3 presenters, I look forward to the opportunity to meet you in Washington!

You might have thought that the IP convergerce era would have brought in easier networks and simpler contracts. You know, buy one service from one carrier, have it do everything, sign a single document where all the conditions for buying that service are lumped together, and plan to work 9-5 during the term of the deal.

Of course, things haven't worked out that way. Complexity is built into the very act of installing new technologies that render faster and more flexible results for end-users. That's true for the network engineering side, the provisioning and service levels, and the contract deal itself.

One way in which we see this is in the carriers' reaction to innovative mechanisms in terms and conditions. Carriers like to set up a game of whack-a-mole whereby they try to offset apparent new flexibility in one contract idea with a straitjacket somewhere else.

The reason they usually get away with this relates to a simple truth in telecom and networking: Nobody rips out an entire network at once and immediately replaces it with another. New services are usually additive. That gives carriers a self-replenishing supply of rate elements on which to sneak in restrictive conditions that prevent you from riding down the market price.

We often see this in both explicit and implicit terms that apply to individual circuits. A per-circuit term plan that applies to a newly installed circuit (often a very high-cap metro or national circuit, and/or a new WAN technology such as Ethernet or an MPLS-like add-on to an Internet connection) has the effect of canceling out a "no-commitment" overall deal. Controlling the procurement process within your company is key here. Carriers know that new or naive CIOs who want to "make their mark" by forcing telecom vendors into what are superficially no-commitment, top-level contracts are fodder for this kind of misdirection.

A stealth variant of this is an innocuous-sounding "minimum payment term" slipped into a separate pricing schedule for a new data and/or VoIP service being rolled out to many locations. If the term is expressed as applying to a certain percentage of the affected circuits, and the service involved is your growth platform, then you've bought yourself a treadmill: A fixed percentage of the installed circuits subject to a minimum payment term will become a continuously increasing number of circuits installed at later and later dates. By the time you've finished rolling out your network, the minimum payment term of this one element will exceed the expiration date of your overall contract.

Try re-negotiating lower rates in the middle of this kind of deal, and you may see that what seemed like a good price at the beginning of the contract can no longer be matched to the market. What you want instead is an airtight deal that flows to your benefit from start to finish on both prices and terms, where each quantitative and qualitative element complements all the others.

These are the kinds of critical considerations you must know about at the beginning of your procurement process rather than the end when it's too late. They're what my TC2 colleagues Jack Deal and Larry York, along with LB3's Andrew Brown, will be addressing in a session called "Blueprint for a Successful Procurement: 7 First Steps to Maximize Leverage" at the 2010 Telecom Negotiation Conference in Washington, D.C. on March 11-12.

Past attendees of Telecom Negotiation, chaired as always by LB3's Hank Levine, will tell you the conference is about as chock-full of meaty detail as anything they've ever gone to. I'll also be speaking along with a number of other TC2 consultants and LB3 attorneys about the latest in the art and science of negotiating fully coherent telecom deals that actually deliver market-based benefits both now and going forward.

Check out the full agenda and other conference information. I look forward to the opportunity to see you next month here in Washington!

The following is a guest post by TC2 Senior Consultant Janis Stephens, whose special expertise includes many of the disciplines surrounding contract compliance and bill auditing.

Everyone assumes that their telecom bills will contain errors. But most enterprises accept their carriers' commitment tracking reports at face value. Why is that?

Commitment tracking reports are spreadsheets or tables designed to show the progress that customers are making toward retiring the dollar commitment that's typically embedded in an enterprise deal. They're often referred to as "MAC tracking reports" because the "Minimum Annual Commitment" is the most common (but not only) type of quid pro quo built into carrier deals.

But these reports are notoriously unreliable. And it's easy to let carriers get away with bad tracking reports, either because they're presented at an extremely high level -- monthly spend grouped into broad categories with no further explanation -- or because they contain excruciating detail that makes it a real chore to pinpoint problems.

Often the basic categories on these reports include such broad strokes as "domestic" and "international" that leave it to the imagination what exactly is being included. And some items may never find their way into the reported revenue, such as data and managed services that were introduced after the the deal was first signed, or international access revenue that your carrier may not think of as its own but is definitely part of your deal.

But the really big challenge in commitment tracking is the complex interplay between billing systems, contracts, service guides, and tracking reports. The last thing you should assume is that your carrier has a clean, "push-button" way to produce an exact revenue match to the services listed as commitment-eligible in your contract.

In some carrier organizations, account teams may be asked to grab bills and reports from different places for MAC-eligible services to produce the tracking report, leaving you at the mercy of essentially manual procedures. In other cases, there may be a conflict in the parties' understanding of the list of MAC-eligible services, especially if the carrier's service guide is more specific than the contract. Example: If your MAC-eligible list doesn't specify advanced features for call centers, and you assume that merely listing the name of your carrier's dedicated inbound call platform covers it, you'll have a problem if the service guide says that features aren't commitment-eligible.

And in some cases, even the MAC-eligible "list" is really an amalgam of several different contract attachments and side letters, practically begging for tracking report problems. Just as billing errors are almost always in the supplier's favor, tracking report errors most typically understate your commitment-eligible spend. But correcting those errors through a tracking-report verification is a broad, all-encompassing process that often requires you to examine the entire chain of procurement and fulfillment to unlock the puzzle.

If a tracking report indicates a potential shortfall, or if it indicates that a customer's spend is close to the commitment, a comprehensive analysis of the tracking report is warranted (which, of course, is something that TC2 can help you with). And if the supplier is providing inaccurate information, it's best to challenge it early rather than wait for the supplier to formally declare the company in shortfall, and then try to dispute a shortfall penalty.

But in almost any situation, customers will gain leverage during their contract term by knowing where their spend really stands vs. their commitment. In the current recession, the big carriers continue to try to box in customers with non-market-based renewal and extension offers and other one-off arrangements. An inaccurate or even uncertain view of how much cushion you have vs. your commitment robs from your ability to present a competitive face to the market and bring out the carriers' more aggressively competitive personality.

And think about it: Even if you do have a substantial cushion, you still aren't likely to use it to move traffic to another carrier, or to generate a better offer short of an optimally timed RFP, unless you know for certain what that action will mean for your remaining flexibility.

Some of these same dynamics are increasingly playing out in wireless deals. Customers often eagerly track their spend, usage or device counts according to how they contribute to the discount tiers that the business is expecting (or, in some cases, that they've effectively promised to individual-liable users). But many enterprises also need to verify the dollar spend or usage that contributes to average monthly spend/usage commitments that competitive flat-rate (but not all-inclusive) voice plans often entail in corporate deals.

Many of these customers are experiencing the same uncertainty over supplier tracking reports that steal their confidence in securing the benefits of existing wireless deals and gaining forward leverage. Unraveling the complexity of the back-office systems that carriers employ to bill and report is a key management task that enterprises are facing across their entire telecom spend. The dedicated effort to solve this challenge will pay dividends in both dollars and confidence.

It's earnings season on Wall Street, and the financial media flash revenues and earnings-per-share numbers on each reporting company. But most of the alerts I get from Wall Street telecom analysts instead highlight the internal figures for each major carrier, especially on the wireless side -- ARPU (average revenue per user per month), and churn (percentage of customers cancelling or leaving during the period).

Now that wireless is considered the main profit generator, the carriers have pretty much gotten the analysts used to rising ARPU and falling churn. The problem is that the drive toward constantly falling churn, while certainly admirable, has potentially negative side-effects.

That's one of the sources of the scare toward the end of last year over Verizon Wireless' hike in consumer early termination fees (ETFs) to as high as $350. In theory, there's nothing wrong with a certain base level of churn if it's caused by something other than dropped calls or bad customer service. Rollouts of new devices and next-generation networks obviously cause customers to look around for new options at a faster rate than before. So naturally, that occasionally leads them to change carriers. But that activity threatens Verizon's industry-leading 1.06% churn and, perhaps goaded by Wall Street, they want to stop it.

In business wireless contracts, Verizon's outsize ETFs don't apply to corporate-liable devices. But many companies rely on an overwhelming number of personal-liable devices to make their negotiated discount tiers with a carrier, in effect leaving their pricing at the mercy of independent users' reactions to carrier marketing.

Other business users are frustrated by lower but still onerous ETFs on a big pool of corporate-liable devices, and find negotiated offsets to be insufficient. One classic headache: "Pro-rated" ETFs that aren't truly pro rata -- say, a $5-per-month reduction in a $175 ETF on a 24-month contract (it would take 35 months to make such a concession a straight-line proration).

Effective ETF management reminds me of the problem of rate reviews in wireline contracts. While some carriers are trying to cut out rate reviews, some customers are trying out better alternatives such as term rather than annual commitments. Similarly, while a complete waiver of all ETFs was sometimes available to very large customers and is now more difficult to achieve, many companies are turning to waiver pools to get the right to end a set percentage of their corporate-liable lines every year without charge.

Still other companies with high turnover in certain business units implement policies that require re-use of individual lines, often combined with "suspend" or "seasonal" plans for the period between two employees' use of the line.

There's a real continuum of techniques here. That's why I like an 18-minute podcast that's available free in the "Telecom Junkies" series run by the folks at The Voice Report, because it describes a whole gamut of these tools.

The podcast, recorded in November and called "Savings Tips in Wake of VZW Termination Fee Hike," features among others LB3 partner Kevin DiLallo. Kevin is an occasional contributor on this blog, including recent notes about the IRS rules on personal cell phone usage and the text-message donation dilemma for corporate-billed devices. Kevin's advice is always practical and tuned to the needs of business users in particular situations. I encourage you to check out the podcast.

The following is a guest post by TC2 managing director Ben Fox, who is based in London.

On Friday Verizon Wireless announced that, starting tomorrow, it will be offering its suite of unlimited usage plans at $30 per month less than before. For example, Verizon's Nationwide Unlimited voice plan will now be available for $69.99 instead of $99.99, and its Nationwide Unlimited voice and text plan will now be available for $89.99 instead of $119.99. Just hours later, AT&T Mobility reduced its equivalent plans by the same amount in order to retain its pricing parity with Verizon Wireless' unlimited plans.

Such unlimited plans have made some limited penetration into large enterprise users, so this price reduction will have a small impact on the bottom line of big companies. But the more interesting question for now is what does this move from Verizon Wireless tell us about its broader pricing strategy? And what does this mean for enterprise customers rather than individual consumers?

The answer is that Verizon Wireless apparently intends to use the new, lower-priced plans to upsell customers to unlimited data plans. In fact, Verizon Wireless CEO Lowell McAdam has been quoted as saying that "this is about data in my view" and Verizon's pricing moves "will drive penetration of data services."

Of course, wireless carriers the world over have been presenting data usage revenues as their priority for many years, but it is interesting that Verizon Wireless appears to be publicly acknowledging that it is willing to cut its voice pricing in order to win more data business. And this is particularly important for enterprise customers to take note of -- for many large companies over half of their wireless lines are now voice and data converged devices, whether BlackBerry, Windows Mobile, iPhones or some other smartphone. Hence a strategy from Verizon Wireless of reducing its voice plan pricing in return for data revenue growth is particularly relevant for enterprise buyers who typically have high spend on wireless data services.

We certainly intend to leverage this in negotiations we are currently involved in with our clients. Over the past twelve months Verizon Wireless has been lagging behind its competition in enterprise deals, not least because of an unwillingness to be competitive on voice plans. We hope that Friday's announcement signals a change of heart from Verizon Wireless that will lead to increasingly competitive offers for enterprise customers, which would ultimately achieve Verizon Wireless' objective of increased data revenues because so many enterprise users have converged devices.

Despite Verizon Wireless' statements that "this is about data", it is notable that Verizon Wireless did not reduce any of the incremental costs of adding unlimited messaging and data to users' voice plans. In business settings, usage of messaging and data services is growing much faster than voice usage, but Friday's announcements from both Verizon Wireless and AT&T Mobility offered no changes to standard pricing for messaging and data add-ons.

There is also the question of whether or not the $30 reductions to the unlimited plans brings them down to a price point where it makes sense for enterprise customers to roll them out to a large proportion of end users. For now, except for companies with exceptionally high average usage levels, the answer would appear to be no. The lower price point does reduce the breakeven point between unlimited plans on the one hand and pooling and flat rate plans on the other, such that the unlimited plans will make sense for a somewhat larger number of end users. But most companies' average usage will still be considerably lower than this breakpoint.

One of the reasons for this is that the unlimited plans, from both Verizon Wireless and AT&T Mobility, do not benefit from the overall discount levels that enterprise customers negotiate, but pooling/shared plans do receive such discounts -- hence the discount raises the breakeven usage level at which unlimited plans cost in.

So fundamentally, this price decrease to unlimited plans does not yet get close to the holy grail of being able to put all users on a single unlimited plan and never again needing to think about which rate plan is most cost effective for which user. That means that rate plan optimization remains as important as ever. Kathy Buffalow, a wireless rate plan optimization specialist at eOnTheGo, notes that even where voice usage is reasonably well understood, there are huge cost optimization opportunities from examining messaging and data costs.

"Taking the costs of plans that bundle messaging and/or data usage and comparing them to messaging and data bolt-ons, plus determining which users should be provided with unlimited data and messaging features versus which users only need a lower cost limited usage messaging/data add-on, is no mean feat," Kathy points out. "Since none of Friday's announcements reduced the incremental cost of data and messaging bundles and add-ons, coupled with business users' continued growth in data and messaging usage, optimizing these costs remains as important as ever."

Friday's announcements may herald a new level of competitive aggression from Verizon Wireless, but only if the cuts we've detailed to the unlimited plans also filter through into Verizon Wireless being more competitive in other areas too. We'll be keeping you posted on what we see over the course of the next few months.

I'm in San Francisco for the fall version of the VoiceCon conference, which I regularly attend and speak at. Over the past two years, one topic in particular has ballooned in interest at the spring and fall VoiceCon meetings: SIP trunking. That's a service you can purchase from carriers that takes the Session Initiation Protocol now used for VoIP call set-up and other signaling functions, and rides it over specific data networking links such as MPLS or dedicated Internet.

The ultimate hope of SIP trunking is that by purchasing a certain number of ports for concurrent calls based on a study of your peak voice traffic, and having the bandwidth for your VoIP dynamically allocated across your network, you can eliminate many if not all of the elements of traditional telephony that have remained in place under more rudimentary VoIP implementations. Among these are some of the stickiest in price in an otherwise deflationary industry: local telephone trunks and PRIs.

You may still have to pay what is in effect a toll for the switched end of a call (often the origination of a call to a contact center) as part of the SIP trunking package. But other pricing parts of the separate voice-network equation drop away, typically in favor of a voice-grade class of service on the MPLS network you may have installed anyway, and the potentially very scalable concurrent-call rate element.

While the interest in the service is real -- and justified, because SIP trunking is being sold and installed by a number of carriers -- it's fascinating to note the different perception of the broad user base and the carriers as to its practical availability.

I shared a panel today with Alla Reznik, Verizon's director of Global Advanced Voice Services, in which we discussed SIP Trunking and other services with moderator Eric Krapf, editor of NoJitter.com and long-time organizer of VoiceCon. Alla has served on my own VoiceCon panels in the past on the same subject, and she is one of the most conversant people on the subject. There's no question from her presentations that Verizon sees SIP trunking as a core offering in both national and, ultimately, international rollouts of integrated voice and data networks.

But in general discussion at VoiceCon, including in other sessions, it's clear that many users feel that the major carriers are holding back on them on SIP trunking. Account teams seem reluctant to bring it up, we repeatedly hear, and the first pass at asking about availability and pricing can be rocky.

Some of this is undoubtedly because many carrier reps really don't know much about the product. But the user perception is that as the main national enterprise carriers have merged back into combined local and long distance behemoths, they've become loath to present a product that may cannibalize the local telephony trunks from the old "RBOC" sides of their business.

Our experience at TC2 on this issue of re-monopolization is that there are two very different sides of the same coin. In the case of SIP trunking, the very fact that the two largest carriers have a huge installed base of local telephony to protect can actually be turned against them, if you play your cards right.

Sure, if you talk to a single carrier, and you ask in isolation to get a service that will wind up earning that carrier less money, you are likely to get the foot-dragging type of response that has bedeviled telecom users, in one way or the other, for decades.

But we are beginning to find that SIP trunking as an additional service is one of those tools that carriers in a competitive situation can positively employ to try to win your business. Say two carriers are bidding on a national data network that also prospectively can be used for voice and video. Now add the fact that if the user does go forward with convergence using the service, the losing bidder will not only lose the "long distance" business of that company, but also the local telephony part of that company's business in their native territory.

Now the need to protect an installed base is being leveraged against both carriers. So at least one of them may have to respond -- either with a competitive VoIP service that makes the other carrier lose their "POTS" business with no compensating new business, or with a better bid on the national network itself.

Clearly, many variables go into this kind of situation. In the real world, many enterprises are not willing to give up their local trunks because of issues surrounding E911 and diversity. But for some large enterprises, the greater number and uses of local trunks, T-1 access lines to long distance POPs, and high-capacity virtual LANs and WANs from SONET to Ethernet at numerous locations gives them a lot to play with. That means that even a partial elimination of local infrastructure that used to have to go to the incumbent carrier in each territory can have a big payoff.

This keen interest in SIP trunking provides a notable example of the "Jekyll and Hyde" carrier behavior that my colleague Ben Fox has discussed in his own NoJitter article, There Is Only One Sure Way To Get The Lowest Possible Telecom Prices. In fact, it's a multiplier effect: in this case, the tension between a legacy base and a next-generation service can swing in completely different directions depending on how competitively you are presenting yourself to the carriers.

We'll be watching to see how quickly the SIP trunking trend accelerates, and how well enterprises are effectively using competitive leverage to make it go. Even though many people in the big carriers don't want to acknowledge it, the carriers' businesses is changing, and if you're in a position to force them to realize it, you're probably doing something right. Getting yourself into that kind of position is what much of telecom procurement for the long run is all about.

The following is a guest post by TC2 Asia-Pacific managing director Joe Schmidt, who is based in Singapore.

If you're a buyer of wireless services, which has a higher priority in your decision process, the carrier or the device?

For buyers who negotiate enterprise deals, the answer has always been the carrier. But lately, due the runaway success of Apple's iPhone, as well as Apple's exclusive iPhone relationship with AT&T and company executives demanding "I want an iPhone," enterprise buyers are wondering whether to reconsider their approach to buying wireless services.

Wireless services and the use of smartphones, such as the BlackBerry and now the enterprise-ready iPhone, continue to gain strategic importance in the enterprise. By reading the recent earnings announcements from AT&T and Verizon, it's also clear that wireless services are a significant growth area for the carriers.

Both carriers added net new subscribers last quarter -- AT&T added 2 million and Verizon added slightly less at 1.2 million. What's more, both indicated they expect wireless revenue to continue to grab a significantly greater share of their corporate revenue. And that's particularly due to the demand for smartphones and the use of wireless data services, which are markedly more profitable for the carriers once they get past the initial marketing expenses.

But dig deeper into these earnings announcements and you begin to see how dominant the iPhone has become and why enterprise buyers are likely feeling some pressure to alter their procurement approach. Of the 4.3 million smartphones added to AT&T's network in the third quarter, nearly 75% were Apple iPhones. And, according to AT&T, nearly 40% of those iPhone activations were from customers new to AT&T.

How many of those new subscribers do you think said, "I want an iPhone, so I'll subscribe with AT&T" rather than "I'd like to subscribe with AT&T and I'll take an iPhone please"? My guess is that it's probably a lot more of the former than it is of the latter.

So, we know devices do matter, but can enterprises take this same approach -- select a device first and sign up with whatever carrier supports it? Not so fast -- not if you expect to negotiate a competitive agreement with your wireless carrier.

The moment you put the device before the carrier is the moment you lose your leverage, your ability to negotiate market-leading pricing and commercial arrangements, and your ability to influence operational support. You eliminate the healthy tension caused by having multiple suppliers trying to win your enterprise business. You end up having only one default carrier choice -- the carrier that has the exclusive device relationship.

Think of it this way: Making your enterprise wireless buying decision based on the availability of the iPhone, or any other carrier-exclusive device, is akin to jumping off a building, being told you're in trouble, and then responding that, no, so far you're doing alright. Trust me, at some point your decision is going to hurt.

What you do want to do is make sure you have a real-time handle on the behavior of your user base as you go into the buying process. This suggests monitoring not just the device market per se but also the burgeoning wireless applications market. When you consider that Verizon Wireless is bringing out mobile devices on Google's Android operating system and mobile application platform, and that Apple is now broadening its iPhone availability in the U.K. from one exclusive carrier (O2) to two more (Vodafone and Orange), you can see what's coming down the pike.

It's absolutely fair to demand that carriers support the specific mobile capabilities your base expects without premium pricing, given that a wireless-device rollout under the guise of a corporate-liable deal is itself a marketing function on your part. But as the major carriers sort out their mix of 3G/4G coverage and hardware/software offerings, you should be able to play them off against one another in procurements if you don't get laser-focused on only one device.

Our advice to buyers of enterprise wireless services right now is to continue to evaluate and select your wireless carrier based on the merits of the carrier, its network, its pricing -- and then also its ability to support your enterprise mobility program. Look for carriers that offer a broad array of devices, since smartphones and the applications that run on them are clearly important to the enterprise.

And remember, nothing lasts forever, so when AT&T loses its exclusive iPhone advantage in the U.S., which it likely will in the coming months, you'll be glad you didn't blindly jump while the market was rapidly evolving. We'll be following these developments closely.

If you got a memo today from a senior executive in your company ordering you to get rate reductions from your principal carrier right now -- and never mind when your contract actually terminates -- could you do it?

An equally interesting question is: What would you have to give up to get it?

On the surface, many people would say that it's becoming more difficult to achieve mid-contract rate reductions. That's because carriers are becoming markedly stingier about rate review clauses. In many cases they're refusing to offer rate reviews in new contracts. In other cases they're offering rate reviews, but not annually.

That's leading to silly proposals such as offering an 18-month rate review on a 2-year contract -- silly because if you're negotiating a rate review rather than a new contract six months out from termination, something's wrong.

But looked at another way, instant rate reductions are very doable right now. That's because carriers have ramped up their activity in pre-emptive contract extensions and new term agreements with customers who are well short of termination.

Such activity appears to "solve" an additional problem that's been plaguing users in 2009 -- the recession. But that's led many people and organizations into a survival mode of thinking.

Think about it: rate reviews and pre-emptive contract extensions may both appear to be dealing with straight dollars, but the logic of the ongoing relationship is reversed in each. In a well-structured rate review, rate reductions occur because the carrier is fearful of having your commitment to it reduced. In a pre-emptive new contract term driven by the carrier, the carrier very often gets your commitment increased -- via length of term, percentage of spend obligated to the carrier in a MAC, even pseudo-exclusivity clauses that effectively prevent you from seeking competition.

One of the main points we make with corporate users is that there is a continuum of contracting tools that are available at any given time. For example, if there's a trend to scale back rate reviews, there may also be a trend toward term (rather than annual) dollar commitments. Regularly retiring a term commitment more than a year early has much the same (if not better) impact than rate reviews, because it knocks out the final year's obligation and you are regularly free to "discover" the market via competitive bids.

But in today's environment, carriers love to mask this exploration of counter-trends with what my colleague Ben Fox calls "new temptations" such as slightly lower pricing and credits that end the search for competitive contract terms and market-based rates.

These themes are explored in a major piece that Ben has authored for our friends at VoiceCon and NoJitter.com called There Is Only One Sure Way To Get The Lowest Possible Telecom Prices. Ben explains how you can change the toolbox that your carrier is using if you 1) don't get stuck on a single trend such as the decline of rate reviews, and 2) know how to introduce competition even under the pressure of today's economy.

All of us at TC2 have experienced how the carriers have two entirely different sides -- Ben calls them the Dr. Jekyll and Mr. Hyde personalities latent in each carrier -- when you change the discussion in this way. Ben also discusses the internal management challenge of positioning your organization to face Dr. Jekyll when your executives and peers may be unwittingly setting you up for a date with Mr. Hyde.

Simultaneously dealing with the external and internal pressures on your job is a major theme of this blog, and Ben's article deals in depth with the very situation that many users are facing right now. Check out the piece and let me know any of your thoughts as well.

A general principle of effective telecom procurement has always been that the broader the basket of services, the better the offers -- up to a point. That point is reached when you go beyond the boundaries of what a discrete set of bidders can bid on by virtue of their footprint or skill sets.

As a practical matter, we've seen two such boundaries for some time. One is the split between domestic and global services, because the lineup of bidders is likely to be different for each. The other is between wireline and wireless, because the product houses within the big carriers (other than Sprint) have non-parallel service platforms and discount structures between their fixed and mobile services, and simply haven't wanted to combine the two under a single agreement.

We're always on the lookout for shifts in this area, and we may be on the verge now. AT&T has been talking to some of its big customers about pulling together wireline and wireless services for one mega-commitment, with various promised or perceived concessions on the resulting deal.

We haven't really seen this activity at Verizon, perhaps because it shares ownership of Verizon Wireless with Vodafone, but we still wouldn't be surprised if we see Verizon broaching the idea of combined commitments to select customers sometime soon. And we also wouldn't be surprised if you and your IT-related colleagues get press and market research reports asserting that you can get bigger wireless discounts and a better wireline deal through combined MACs. We recently saw one such market research report purporting to define the amount of additional corporate discount percentage points you can achieve on wireless plans by rolling up enterprise wireline voice and data spend into the same deal.

It all sounds promising, but in the real world there a few things to watch out for. In our experience, you have to look closely at combined MAC offers to see whether they're really better or if it's a mirage. The initial presentation of a combined offer may be a very high-level description that has the air of "It's combined, isn't that great? It must therefore be better, right?" Basically you have to move carriers from offering a combined deal for its own sake to doing a combined deal that is in fact a better deal. It may take several rounds of discussion and bidding to do so. If there ever were a type of deal that shouldn't stop at Round 1, this is it.

In particular, you have to make sure that the key details of the "better" combined offer are not the ones you would have received otherwise, and that the "worse" separate offer is not a stalking horse that you never would have seen (or signed) in the first place.

Market-based rate benchmarking clearly comes into play here. We've seen situations where a carrier has proposed different rates on a key wireline rate element (such as high-volume voice toll price point or a typical data port speed) based on combined vs. separate commitments, but the price point under the separate commitment deal is so far out of market that we doubt we would have seen it at all in the absence of a supposed choice between separate and combined deals. That's no better than a phony "sale" at a retail store where the list price is at a level that no one actually pays for the product.

Next, examine the combined MAC itself. The first instinct of carriers seems to be that if your wireline commitment is $X million, and your wireless commitment (if expressed as a spend rather than number of devices) is $Y million, the correct combined MAC is $X+Y million.

But think about that for a minute. Combining commitments without a "haircut" doesn't lower your risk of either a technological or business shift that forces a sudden reduction in the spend of one of the component services, risking shortfall. Indeed, it raises that risk.

The carrier may respond that the combined deal also increases the number of services available to replace the spend through growth, but can you really guarantee in today's environment a set level of growth in any of your key services if one falls off? That's basically what you're guaranteeing under these scenarios. Obviously, the combined-commitment concept should be explicitly used to increase your cushion, and any combined commitment should be for less than the sum of the separate commitments.

Even worse, we've seen initial proposals that appear to total up actual wireline and wireless spend (rather than separate MACs) into a mega-MAC, or do so with a very churlish discount, providing almost no cushion. That completely defeats the purpose of combined commitments. We're actually not sure whether this is a result of the carrier trying to snow the customer, or whether it simply reflects another reality of combined MACs -- the carriers are just getting going on this concept and their initial documents on it can look like they were put together on the back of a napkin. Look for inconsistent language in labeling offerings, basic math errors and the like. When you see those, tell the carrier it will have to polish its work before you can consider it seriously.

Finally, consider whether the carrier is playing a game of misdirection here -- simply stringing you along on the annual-commitment concept by making it sound more comprehensive when there's actually a more important trend to consider: term commitments. A single term commitment that can be retired 1 1/2 to 2 years into a three-year contract may be much better (for your leverage and competitive position, and therefore your pricing over the medium run) than any annual commitment, no matter how broad.

I'm not knocking the possibilities here. In fact, it's almost inevitable that the combined MAC trend will grow, because from industry standpoint wireless is currently standing tall on margins, profits and growth, and the carriers should be motivated to find great deals for their best customers by cross-checking everything you spend. Plus, the reality is that end-users often take wireline voice and data for granted but demand a lot of value-add on wireless, and you should be able to play your big carriers' assertions on competitive differentiators for a great total deal. Finally, we also know that in certain regions of the world, such as parts of Asia-Pacific, such combined deals have already taken hold.

The guinea pig principle is very much at play here. It's early in the process for combined wireline/wireless MACs. Make sure that the benefits are tangible, not just implied, before you become one of the early adopters of this contracting trend.