5 Hidden Telecom Costs That Are Draining Your Bottom Line

When it comes to managing telecom and IT spend, what you don’t see can hurt you the most. Many businesses assume they have their telecom costs under control, until they dig a little deeper and realize those numbers are just the tip of the iceberg. These hidden telecom costs and expenses erode budgets silently – month after month.  

And far from rare, this is a problem we see time after time across industries. 

Let’s uncover five of the most common (and costly) telecom expenses that often go unnoticed, and more importantly, how effective Telecom Expense Management (TEM) can help you catch them before they balloon into budget-breakers.  

1. Unused or Underutilized Services 

You’d be surprised how many businesses continue to pay for lines, circuits, or services that are no longer in use or at closed locations. These “zombie services” might’ve once served a purpose. But now, they’re just quietly draining funds.  

More precisely, 15-20% of telecom services are inactive or underutilized, yet organizations continue to pay for them. Whether it’s a T1, PRI, DSL, or employee mobile plan that should’ve been shut off months ago, these forgotten costs can really add up. Telecom cost management tools can flag underutilized services, helping you eliminate what you no longer need.  

Want to dig deeper into this specific telecom issue? Read our post on The Hidden Costs of Telecom: Why Effective Telecom Expense Management is Critical.   

2. Billing Errors and Overcharges 

This one’s a classic, and a costly oversight. Around 12-20% of telecom bills contain errors, most of which favor the vendor, not the client. Common issues include incorrect application of rates or discounts, unauthorized one-time charges, and disconnection or rate change orders that were submitted but never fulfilled. In some cases, partial circuit charges persist, or even reappear on future invoices, long after a service has been disconnected. 

Without periodic invoice audits, these billing mistakes can go undetected for months, even years. An effective TEM software solution audits every line item, catching discrepancies before they impact your bottom line.  

3. The Often-Overlooked 

Ever wonder if you’re paying state or local taxes despite being tax-exempt? Or if your telecom rates are truly competitive? What about construction fees, or are they even valid? 

With the right Telecom Expense Management (TEM) solution, you don’t have to guess. It identifies tax errors, benchmarks rates, and matches invoices to your contracts – saving you money and stress. 

4. Early Termination Fees 

Many telecom contracts include early termination penalties—often at the circuit or Master Services Agreement (MSA) level. During workforce reductions or tech upgrades, these details are frequently overlooked. Without clear visibility into contract terms or proper planning (like including downturn clauses), fees can accumulate fast. 

How TEM mitigates this: 

• Monitors circuit and MSA end dates 

• Tracks auto-renewal clauses to avoid surprise renewals 

• Flags contractual spend commitments 

What’s more, effective telecom contract negotiation starts with benchmarking current market rates and understanding your actual service usage. Always aim to include flexibility clauses, like downturn protections or early termination waivers, and avoid auto-renewals without review. 

5. Lack of Inventory Visibility 

If you don’t know what you have, how can you manage it? 

Too many companies operate without a clear view of their telecom inventory, phones, circuits, data lines, software licenses, you name it. Without a central inventory system, services get lost, duplicated, or worse, paid for without being used. 

Modern TEM platforms bring everything under one digital roof, full visibility into service usage that leads to real telecom cost savings. 

Curious about how inefficiencies like these eat into your budget? Check out our related blog on The Hidden Costs of Telecom Inefficiency—and How to Reclaim Your Budget. 

The Bottom Line 

Telecom costs evolve with your workforce, your technology, and your vendors. But without proactive management, they can quickly spiral out of control, depleting your budget, and at an accelerated pace. 

That’s where Telecom Expense Management makes all the difference. An automated, intelligent, and human-backed solution like Valicom’s Clearview can help businesses reduce telecom costs, stop waste in its tracks, and get back to focusing on what really matters. 

Ready to stop Telecom overspends? Let’s uncover your hidden costs together, start building your telecom cost reduction roadmap, and save up to 50% on annual telecom costs.  

Let’s talk!