How Soon Will This Headline Become a Reality?
Yes, you are reading that correctly, a Wireless Carrier SLA. Service Level Agreements for wireline services have been around since the mid 1980’s when the General Services Administration (GSA) began to require contractual commitments around performance from service providers.
The contractual performance clause was a big impetus for carriers to improve the performance and reliability of their wireline networks and was a driving force behind the explosion of the Internet in the 1990’s. Here is the definition from Wikipedia:
SLA: A service-level agreement is a part of a service contract where the level of service is formally defined. In practice, the term SLA is sometimes used to refer to the contracted delivery time (of the service) or performance. As an example, internet service providers will commonly include service level agreements within the terms of their contracts with customers to define the level(s) of service being sold in plain language terms. In this case the SLA will typically have a technical definition in terms of mean time between failures (MTBF), mean time to repair or mean time to recovery (MTTR); various data rates; throughput; jitter; or similar measurable details. (Source: Wikipedia)
Hank Levine a partner at LB3, the premiere telecommunications law firm in the US and possibly worldwide, was an early innovator in the creation of SLA’s, and I contacted him to ask about the state of wireless SLA’s. His partner Kevin DiLallo is the firm’s expert on Wireless carrier contracts. I spoke to Mr. DiLallo about the current state of wireless SLA’s.
The good news is that they are starting to appear in contracts, especially for very large customers. My first questions was “How resistant are wireless carriers to SLA’s and why? Kevin answered that the most common reason the carriers give is that “environmental” factors affect service so often; they are unwilling to put performance guarantees into a contract.
They are more likely to use non-binding contract terms such as “Service Level Objectives,” or SLOs. So I’ll use the acronym SLO going forward in this article. In addition, let’s all agree that we do not expect our cellular devices to perform during “Acts of God” and driving rains. But that said there are sunny days when I just cannot get my data to download, and I am not alone.
The next question “Does the unregulated nature of the wireless provider’s impact their willingness to offer SLO’s?” Mr. DiLallo indicated that regulation was not a factor, and in fact he was seeing large customers (think brands that advertise during the Super Bowl …) getting SLO’s around contract issues such as service provisioning. At Mobile Pulse, we see SLO terms around performance especially in regards to performance that Mobile Pulse can measure, such as gaps in performance that persist over time and over multiple devices.
The next question was “What penalties are you seeing in SLO’s?” Mr. DiLallo indicated that when all a customer can get are “Objectives,” there typically are no penalties for failing to meet the Objectives. In the somewhat rare instances where a carrier agrees to Service Level Agreements, missing those standards can result in penalties ranging from service level credits to a right to terminate the contract, in the case of a really egregious breach, such as one that can’t be fixed or that persists for an unusually long time. Termination is a really dramatic remedy, however, and thus one that is seldom invoked.As Hank Levine indicated, Termination is a little like going after a mosquito with a howitzer. Sounds impressive, but not usable or likely to produce results.
At Mobile Pulse, we’re seeing some movement to identifying pain points (like gaps or dead spots in service) identified using Mobile Pulse in the RFP phase and upon awarding the contract, the wireless carrier agrees to remedy the service gaps within set period of time per the contract, such as a new tower or more bandwidth. We heard these kinds of conversations in the Colorado Springs wireless contract bid process.
The next question was “Does BYOD impact the ability of companies to negotiate SLO’s?” Kevin was very definitive on this question. He indicated that, when all costs are included, BYOD generally does not save companies money. They have less control in their contract negotiation because they have no leverage. Large companies who are reimbursing the cost of wireless service to their employees are missing a BIG opportunity to negotiate for low-cost service agreements for their employees.
Kevin said he’s seen really low monthly recurring charges when compared to what employees can get on their own and then be reimbursed. The emphasis was on “really low monthly rates.” Awarding wireless service to a single wireless provider can be a big money saver as long as you don’t sacrifice your leverage. And now that all the wireless providers have all the major device type (Apple, Android, Windows and Blackberry) it might be time to shift to SYOD (Select your own device).
Mobile Pulse has found the best chance of putting an SLO into a wireless contract is to start performance measurement during the RFP process. Mobile Pulse has a package specifically for this measurement to allow organizations to see which wireless carrier performs best in their unique employee footprint, clear identification of gaps (before the contract award and excluding “Acts of God”) and eliminating devices as the cause of poor network performance. We recommend that you for ask “test” devices from the bidding carriers as part of the RFP and run Mobile Pulse to assess the performance. Our Carrier Selection tool is easy to implement and affordable.
Service Level Objectives are possible. Please share your organizations experience in the comments below and let’s all make the wireless network the backbone network of business.