Negotiations in the telecommunication industry

By — on / Business Negotiations, Daily

The Clearinghouse at PON offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises.  Telecom Services is a two-party, two-issue, integrative, scorable negotiation over the terms of a telecommunications services contract.

Scenario: Data Voice markets telecommunications (“telecom”) services to residential and business customers. This year, a small firm called Consulting Integration needs to renew and adjust its telecom services contract with Data Voice.

This will be Consulting Integration’s second three-year telecom services contract with Data Voice. Technical specialist Robin Rigley represents Consulting Integration in the service contract negotiations, and regional sales manager Kelsey Kidd represents Data Voice.

Robin and Kelsey have to negotiate a difficult issue: the number of integrated voice/data/video workstation setups. With a large part of its business devoted to onsite client consulting, Consulting Integration does not currently require the integrated workstation packages that Data Voice offers. However, when Consulting Integration’s website improvements begin to expand its offsite consulting services, the need for integrated workstation packages may grow.

Before Data Voice expanded its telecom platforms, Data Voice lost many clients who preferred to maintain telecom service agreements with a single carrier. In response, Data Voice began to offer data and video telecom services, bundling them in package agreements like those of their competitors. Because of the additional networking hardware required to offer these services, Data Voice has had to expand its technical, operational, and customer service divisions threefold. Thus, Data Voice can no longer afford to continue contracts restricted to voice-only packages. As the regional sales manager, Kelsey Kidd is responsible for giving each client a “fair” number of voice-only packages. These “fair” numbers are based on the total number of workstations the client fits out, and on Kelsey’s judgment of each client’s need for voice-only setups.

Robin and Kelsey are about to meet to discuss their telecom services contract adjustment and renewal.

Teaching points include:

  • Creating value in negotiation through trading on different priorities
  • Pareto optimization / maximization
  • Tension between creating and claiming (or distributing) value
  • Effect of aspiration and reservation values on negotiated outcomes
  • Importance of responding and adjusting to new information in negotiation

Participant materials include:

  • General Instructions for both parties
  • Confidential Instructions for:
    • Kelsey Kidd, Regional Sales Manager for Data Voice, Ltd
    • Robin Rigley, Technical Specialist for Consulting Integration, Inc.

Teacher’s package includes:

  • All of the above
  • Teaching note

To purchase this role simulation, click here.

The Program on Negotiation at Harvard Law School
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