Telecom Benchmarking Methodology

Advocate Networks derives telecommunications benchmark data from various sources across multiple industries. A primary source of benchmark data is actual enterprise contracts for services provided by Tier 1 services providers operating in the United States through a managed, competitive procurement process. A secondary source is written Tier 1 service provider offers provided during a competitive request for proposal process. Typically, data sources older than twelve months are excluded from the analysis.

A Tier 1 service provider has the following characteristics:

1. Public company in good financial standing,
2. Provides multiple classes of service, and
3. Operates a national network with multiple switches or POPs in each major market.

Advocate Networks specifically excludes Tier 2 or 3 service providers from benchmark source data to ensure a conservative approach to benchmarking and advising our customers. Tier 2 or 3 service providers may offer unusually low rates or unusually competitive terms or conditions that could skew best-in-class offers that most customers could expect to see in a competitive procurement process. In some cases, certain specialty service providers are included in benchmark data, and noted as such.

Actual Tier 1 service provider contracts and service orders are studied, data extracted and compared by class of service. Data analyzed includes:

1. Rates,
2. Discounts,
3. Incentives such as signing or renewal bonuses,
4. Credits,
5. Waivers,
6. Special renewal terms,
7. Business down-turn provisions,
8. Revenue commitments,
9. Termination clauses,
10. Coterminality clauses and,
11. Length of the agreement.

Benchmark data is compiled and aggregated to protect against disclosure of confidential information. Benchmark data is ranked and the top 25% is averaged to determine Best-In-Class benchmarks. Advocate Networks maintains a database of benchmark data for best-in-class rates, terms and conditions.

In completing a Best-In-Class analysis, rates are comparable to the Benchmark based on same class of service, same service type, similar revenue commitment levels, and same term of agreement.

Benchmark data is a not to be confused with an actual service provider offer, as the data is an aggregation of best offers experienced in the marketplace, and can, in most cases, only be sourced in a competitive procurement process.