Taming telcos

Mobile phone contracts, IP connectivity services, PABX maintenance contracts, corporate IP telephony networks. Telecommunications services are the lifeblood of most modern businesses, and the terms of supply are very often provided on standard form conditions that are favourable to the telco.

Telco contracts invariably make it clear that the telco is not promising there will never be any faults or outages; these are inherent in the innovation. What you should check is what happens when there is a fault, when planned outages can occur and what happens when there are unplanned outages.

Is your supplier a reseller or resupplier of a service on somebody else's network? This could mean the telco must rely on its upstream supplier for service activation and restoration when there is a fault. Does the fine print let them off the hook if their upstream provider does not do what they are meant to?

The liability

You can expect the liability and indemnity provisions to be heavily in the telco's favour. You are not likely to have any fallback for your lost profits or lost data if your business is crippled while a network outage or fault. Check that the telco is indemnifying you against any third party intellectual property claims made against you because the telco's service is alleged to be infringing. Expect to have to indemnify the telco for claims made against it because of the content you put over its network.

Check whether the speeds being promised for data throughput are guaranteed speeds or theoretical maximums. If you are using a shared network, ask what the contention ratios are. Will your network speeds suffer when there is high congestion?

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