The merger and acquisition (M&A) environment is challenging in 2024, to say the least. Telecom resellers, UK and overseas, are not just navigating geopolitical turmoil — influencing everything from vast global supply chains to local market dynamics. They’re also contending with mounting regulatory pressures, cyber security risks, and economic headwinds.
The latter may even go some way to suggesting why valuation mismatches are at an all time high right now, as telecom resellers — and wider telcos — look for ways to increase their capital. That’s if they’re not rationalising their portfolio of assets through consolidation.
According to Bain & Company’s survey of more than 300 M&A practitioners, the buyer-seller valuation gap is one of the most significant barriers to telecom deal activity right now. This, coupled with the fact 60% of telcos are becoming more selective in the deals they pursue, represents the pockets of opportunity for selective bets.
So, against such a competitive backdrop, how can telecom resellers get back in the driving seat? Whether you’re gunning for growth or keen to lay the right foundations, integrating a bolt-on legal partner is a key cornerstone of success.
Where should a telecom reseller plug legal expertise?
There’s no one-size-fits-all solution to strengthening a telecom reseller programme from a legal standpoint. Any undertaking, no matter how complex, should be tailored to suit the unique needs of your business.
However, particularly when you first become a telecom reseller, it can be difficult to know how to coordinate expertise. While you may not need to sacrifice as much capital outlay as a startup, overlooking critical groundwork can prove devastating in the long run — causing costs to spiral, putting compliance at risk, and challenging the integrity of your brand in the face of stakeholders. The same can be said for established managed service providers (MSPs) too.
Contract risk reviews
When you enter into a commercial agreement, it’s important to understand exactly what you’re signing, particularly if you are contracting with the wholesaler as opposed to another reseller. An in-depth examination of contractual documentation can uncover any legal, financial, regulatory, or security risks that could have a knock-on effect on your business. With this, you can make an informed decision about whether to enter into a contract, or firstly iron out some of the provisions to protect your business. Many telecom resellers sign for good product, service and pricing, for example, neglecting elements such as quality of service (QoS) and service level agreements (SLAs) that could reflect on relationships with their own customers, particularly when it comes to poor performance.
Contract interpretation and negotiation
From payment terms, liability and indemnity obligations to intellectual property (IP) clauses, notice periods, and more, all parties must be satisfied with the contents of the documentation before making it legally binding. With this, the relationship between you, the supplier (another reseller), and the relevant wholesaler (where applicable) can begin on good footing, as well as aiding financial and operational decision-making within other deals, and shielding you from risks of litigation later down the line. Ultimately, the objective is to reach favourable terms for all stakeholders — minimising any financial, legal, and operational risks.
Regulatory and compliance advice
Liabilities and indemnities, insurance, IP protection, volume commitments, most favoured nation clauses (favourable pricing), GDPR, and public sector frameworks such as Network Services 3 (RM6116) — these are just some of the issues keeping telecom resellers up at night. One misstep, and firms can find themselves in the thick of crippling disputes and/or legal proceedings. That’s why, as well as laying the right foundations with initial contracts, it’s important to operate conscientiously at every stage. Legal experts who know the nuances of complex regulations can lookout for potential pitfalls, and ensure you navigate them the right way.
Supplier management training
With a rapidly increasing portfolio of services — spanning cloud migration and hosting, network connectivity, endpoint and edge security, plus disaster recovery and backups, to name just a few — telecom resellers are navigating a greater number of contracts with wholesalers and/or other resellers. But delivering so many service schedules, in such a multitude of ways, is no small feat. This is where a specialist legal partner can pay dividends. Empowering internal teams with strategies for long-term success, they’ll help you understand how to cut the best deals and negotiate optimum terms, as well as support the seamless provision of products and services in line with commercial agreements.
Safeguarding M&A transactions for telecom resellers
The stakes are even higher in M&A transactions, simply because of the permanence of the deal for both the acquirer and target company. Determining the legal hygiene of both the acquirer and the target company is one critical component, with the due diligence process uncovering any potential liabilities (including obligations, of course) in material contracts.
Why Trenches Law is the legal partner of choice for telecom resellers
Backed by decades of industry experience, we understand the unique challenges telecom resellers face. As such, we’re perfectly placed to provide sensible, pragmatic, and commercially viable legal support, no matter the requirement.
Championing your reputation as if it’s our own, we treat negotiations with respect, and work objectively to find solutions that appeal to all parties involved. It’s not about reinventing the wheel or providing a full red line mark-up to create the perfect contract. Instead, we get to the heart of the matter, and achieve positive outcomes efficiently.
Dragging out negotiations for months or even years, simply for the sake of it, really isn’t our style. We’ll focus on the terms that matter the most to you, and leverage our legal expertise to negotiate effectively. It is always important for us to agree to a fair contract between the parties to set the relationship off on a good footing.
The best bit? We don’t charge the exorbitant fees of city law firms. We provide legal support that’s accessible, timely, and solutions-focused — as it should be.
