Verizon Wireless Forges New Relationships with Utility Customers; Provides Network with Substantial Discounts
A Pantellos-negotiated agreement between Verizon Wireless and 14 utilities represents a good example of the buyer and supplier benefits of collaboration. The agreement brings Verizon Wireless significant new business while offering participating utilities annual savings of $200,000 to $800,000 each on their wireless telecom costs in a first-ever collaboration between the utility and wireless industries.
Wireless telecommunication services are widely used by utilities for routine business calls, emergency dispatching of maintenance crews, gathering usage information from electric meters and a variety of other applications. These services typically account for annual average expenditures of approximately $2 million per utility. As a result, utilities are constantly searching for ways to reduce both first costs and the total cost of maintaining wireless telecommunication services.
Last year, at the request of its customer task force, Pantellos led a collaborative initiative to investigate combining wireless telecom requirements from multiple utilities to obtain more favorable pricing. The collaborative team included nine utility trading parties. Pantellos played a pivotal role by gathering requirements from each utility, developing a comprehensive Request for Proposal (RFP) for a single, nationwide wireless telecom provider, and subsequently negotiating the final agreement on behalf of the utilities.
Importantly, the RFP laid the foundation for further collaboration between the utilities and the selected service provider. “Most traditional RFPs focus on the needs of the buyer,” said Tom Folger, national accounts manager, Verizon Wireless. “Pantellos took a truly collaborative approach by considering both buyer requirements and the goals of wireless telecom providers in the RFP. By establishing common goals and identifying areas of compromise up front, Pantellos enabled us to reach a mutually beneficial agreement with the utilities. We are tremendously excited about the opportunity to provide such a significant number of new customers with Verizon Wireless service and the nation's most reliable wireless network.”
The RFP was distributed to all the major North American wireless telecom providers. After receiving the responses, Pantellos performed a comprehensive quantitative and qualitative analysis for presentation to the collaborative team. The team’s decision, reached by consensus, was to engage Verizon Wireless as the selected provider. Key factors in the decision included Verizon Wireless'extensive coverage area and network footprint, available plans and pricing structures, data applications and technology platform. Verizon Wireless is the nation's largest wireless provider with 33.3 million customers who can call more people in more places than with any other wireless provider.
After the contract was awarded, Pantellos led negotiation and crafting of the master agreement. An important objective for Verizon Wireless was a single master agreement with one set of non-negotiable terms and conditions. By executing one agreement with many customers, Verizon Wireless significantly reduced its administration costs, allowing the company to offer the considerable pricing discount the utilities wanted to achieve.
While the specific pricing details are confidential, the resulting master agreement provides significantly greater discount structures than would typically be available to individual utilities. Participating utilities have been reporting savings of approximately 10 percent. To view the details of the agreement, log in at the Buyer Launchpad on the Pantellos.com homepage and click the “Supplier Agreements” button. The Verizon Wireless agreement, structured as an existing supplier agreement, or PCA, is open to all Pantellos utility trading parties.
Although the original collaborative team included nine utility trading parties, 14 utilities have now adopted the Verizon existing supplier agreement. “Leveraging the buying power of multiple utilities, Pantellos helped us achieve greater savings than we could have achieved on our own,” said Dave Overton, manager, corporate services supply chain for FirstEnergy.
“The Verizon Wireless agreement is the result of collaboration at its best,” said Steve Newland, vice president of sales and marketing for Pantellos. “Our entire process, from RFP to final contract negotiations, focused on mutual gain for both the buyers and the supplier. The outcome is a true win/win solution, as well as an industry first.”
For more information about the wireless telecom PCA, contact your Pantellos Development Manager or Eric Hueneke.
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