Why Private Equity Firms Are Standardizing Telecom Across Portfolios

Private equity (PE) firms are increasingly recognizing that the way their portfolio companies manage telecommunications can significantly impact value. In the past, each portfolio company might handle its own telecom contracts and vendors independently. Today, leading PE operating partners are taking a more strategic, centralized approach. By standardizing telecom services and contracts across all portfolio companies, they aim to eliminate inefficiencies and unlock cost savings and agility. This consultative overview explores why this trend is gaining momentum, the pitfalls of a fragmented approach, the strategic benefits of consolidation, and how firms like NCG help implement portfolio-wide telecom standardization.

The Cost of Fragmented Telecom Management in Portfolios

When each portfolio company negotiates and manages its telecom vendors on its own, a host of inefficiencies often arise. In many industries, procurement spend (which includes telecom and IT services) can account for 50–70% of total costs – yet it’s often managed in a decentralized, reactive way, leaving “millions in value untapped”[1]. Telecom is a prime example: fragmented contracts and inconsistent vendor management across companies create hidden costs and operational headaches. Some key inefficiencies of this fragmented approach include:

• Inconsistent Pricing: Without a unified strategy, different portfolio companies pay wildly different rates for similar telecom services. One business might still be paying outdated prices (e.g. $800/month for a circuit now worth $400) because its contract hasn’t been benchmarked in years[2]. This inconsistent pricing means some companies are overpaying while others may have better deals, a clear sign of value leaking out due to lack of scale negotiations.
• Billing Complexity & Errors: Juggling multiple telecom vendors leads to complex billing across the portfolio. Different carriers send separate invoices, on different cycles, with different formats – creating a reconciliation nightmare for finance teams[3][4]. This environment is ripe for mistakes: billing errors can easily go unnoticed when invoices are scattered. In fact, studies find that billing errors account for 12–20% of telecom charges in unmanaged, decentralized telecom environments[5]. Companies also often pay for “zombie” services – lines or circuits no longer in use – simply because no one realized they should be disconnected[5]. These errors and oversights directly eat into the portfolio’s EBITDA.
• Compliance and Security Risks: Today’s regulatory landscape (data privacy laws, industry-specific compliance, etc.) makes telecom oversight more critical than ever. In a fragmented setup, each portfolio company is left to manage compliance on its own, increasing the risk that something falls through the cracks. Ensuring consistent security standards, data handling, and compliance across dozens of carriers and contracts is extremely challenging without central governance. It’s no surprise that 61% of telecom leaders anticipate regulatory changes will significantly impact their business in the near term[6]. A patchwork of vendors and policies heightens the chance of non-compliance, whereas a standardized approach allows a PE firm to enforce uniform compliance measures portfolio-wide.
• Slow Rollouts and Delayed Upgrades: Fragmentation also drags down speed and agility. When a portfolio company opens a new site or needs a bandwidth upgrade, negotiating anew with local telecom providers can introduce long lead times. Delays in circuit installations or service turn-ups are common when no standard process or SLA enforcement exists. For example, one company signed a contract expecting a 30-day internet install, but without strong vendor management it dragged out to 90 days – an extra two months of paying rent on an unopened location, with zero revenue coming in[7]. Such rollout delays across a portfolio lead to lost revenues and frustration. Without standardized contracts and committed service levels, each project can become a one-off fire drill.

Collectively, these inefficiencies act as a hidden tax on portfolio companies. Telecom vendor landscape is notoriously fragmented and opaque, and many contracts have fine print (auto-renewals, onerous terms) that “trip you up”[8] if not actively managed. The more carriers and contracts in play, the harder it is to maintain visibility and control. As one telecom management firm noted, dealing with numerous vendors means different billing systems and terms, which easily turns into “a chaotic mess… a recipe for errors and lost savings”[4][9]. For a PE firm focused on value creation, allowing this kind of chaos to persist across the portfolio is a missed opportunity.

The Trend Toward Portfolio-Wide Telecom Standardization

Faced with these issues, private equity firms are now pushing to standardize telecom across their portfolios. Rather than treating telecom as a local issue for each company, PE operating partners see it as a strategic lever for value creation. This shift is part of a broader trend of centralizing procurement and IT strategies in PE-owned businesses. In fact, in 2025 strategic sourcing and vendor management have become core components of the PE operating model to drive EBITDA improvement[10][11]. Telecom spend, often spread across many vendors, is a prime candidate for consolidation.

What does standardizing telecom entail? It means developing a common telecom strategy and often a master contract (or a small set of preferred vendors) that all portfolio companies use for key services – whether for data connectivity (fiber, broadband, SD-WAN), voice services, or mobility. Instead of 15 companies each negotiating separate deals with telecom carriers, the PE firm negotiates on behalf of all 15, leveraging the combined volume. Instead of 15 different support agreements and SLAs, the firm sets standardized contract terms across the portfolio for consistent performance and accountability[12]. And rather than each company managing telecom in isolation, some PE firms establish a central telecom/IT function or engage an external partner to oversee procurement, implementation, and vendor management for the whole portfolio.

This trend is gaining momentum because it directly addresses the pain points mentioned earlier. Diagnostics by operating partners often reveal “overlapping vendors, suboptimal terms, and missed volume discounts” across portfolio companies[13]. The logical response is vendor consolidation – reduce the number of telecom suppliers and bring bargaining power to the table by leveraging cross-portfolio spend. As one operating advisor put it, “By reducing supplier counts... portfolio companies simplify operations and strengthen their negotiating position. Leveraging cross-portfolio buying power, [firms] secure better rates, tighter SLAs, and improved terms.”[13] In other words, standardizing with a few key vendors turns the fragmented mess into a scalable, controlled strategy.

Another driver of this trend is the current economic climate. With rising interest rates and pressure on exit multiples, PE funds are scrutinizing operational efficiencies more than ever. Every dollar saved in telecom goes straight to improved operating profits (and higher exit valuations). Procurement consolidation is an under leveraged but high-impact lever for value creation that PE firms are now seizing[1]. Telecom, often seen as technical infrastructure, is being reframed as a cost synergy play. Firms that once left telecom decisions to each CEO/CIO now realize that a portfolio-wide approach can produce quick wins and ongoing benefits. Indeed, some PE firms now include telecom and IT contract alignment as part of their 100-day plan for new acquisitions, alongside other integration tasks.

Finally, the complexity of modern telecom services encourages standardization. The rise of solutions like SD-WAN (software-defined networking), unified communications, and cloud connectivity means there are platform choices to be made. Rather than let each company choose a different SD-WAN or VoIP solution (leading to a patchwork that the PE firm can’t effectively support), many PE tech leaders prefer to pick a best-of-breed solution and roll it out everywhere. This not only saves money but also makes it easier to manage talent and expertise (e.g., having a single skill set needed to manage the network across all businesses). In short, centralizing and standardizing telecom is becoming part of PE operational excellence playbooks, similar to how firms standardize other back-office functions.

Strategic Benefits of Telecom Consolidation

Standardizing telecom across a portfolio isn’t just about cutting costs (though that is a primary benefit). It creates value on multiple fronts. Below are key strategic benefits that PE firms gain by consolidating telecom vendors and contracts:

• Significant Cost Savings: The most immediate benefit is lower cost through economies of scale. By pooling telecom spend, a PE firm can negotiate volume pricing and enterprise-wide discounts that individual companies could never achieve alone. According to Gartner research, organizations can reduce telecom costs by as much as 30% in the first year of implementing a centralized Telecom Expense Management strategy[14]. In practice, PE firms standardizing telecom commonly report double-digit percentage savings on combined telecom spend. Savings come from eliminating redundant services, securing better rates, and reducing billing errors. Every dollar saved is a direct EBITDA improvement for the portfolio.
• Easier M&A Integration (“Roll-ups”): A standardized telecom environment smooths the path for adding new acquisitions or merging portfolio companies. When a new company is acquired, integration is faster because the playbook is already set: migrate them onto the portfolio’s approved telecom vendors and configurations. There’s no need to reinvent the wheel each time. This is especially valuable for roll-up strategies where a platform company is buying smaller add-ons. Without standardization, each add-on comes with a “mess of contracts, providers, and platforms” that must be untangled[15]. With a portfolio-wide standard, the PE firm can plug the new business into the existing telecom framework in short order. This accelerates synergy realization. It also makes carve-outs or internal mergers of portfolio companies far easier, since they share network infrastructure.
• Faster Deployment and Scalability: Consolidation leads to far more efficient rollouts of new sites and technologies. With a central telecom team or provider and pre-negotiated service agreements, setting up a new office, store, or facility becomes a routine process rather than a fire-fight. Standardization often comes with defined installation SLAs and streamlined processes. This avoids scenarios where a new location sits waiting for connectivity for months due to vendor delays[7]. Instead, portfolio companies can turn up new locations or implement upgrades in a fraction of the time. The consistency also means IT teams can replicate solutions quickly across many sites (one proven design vs. 15 different designs). For a growing business, this agility to scale without telecom being a bottleneck is invaluable.
• Better Visibility & Control: Consolidating telecom vendors gives the PE firm and its portfolio companies a single, centralized view of telecom assets and spending. Rather than chasing data across dozens of invoices and contracts, the firm can see all circuits, usage, and costs in one place (often via a Telecom Expense Management platform or a centralized dashboard). This improved visibility makes it much easier to track KPIs, identify inefficiencies, and hold vendors accountable. In a fragmented state, companies often lack a clear inventory of what services they have and where money is going; a centralized approach fixes that. With all telecom under one roof, finance teams can budget and forecast more accurately. Moreover, central control allows enforcing policies (for security, compliance, cost management) uniformly. For example, if the firm negotiates certain uptime SLAs or cybersecurity requirements in the master contracts, every portfolio company benefits from those elevated standards. Overall, the portfolio gains control over an area that was previously opaque. As one industry analysis noted, when telecom spend is spread out, organizations suffer from a “lack of visibility”, but a centralized system brings all vendor contracts and data into one place for efficient management[16][17]. This control also extends to ensuring carriers are meeting their obligations (no more quietly over-billing or under-delivering on performance without someone noticing).

In addition to these main benefits, telecom standardization can also improve quality of service and innovation. A larger customer (the PE portfolio as a whole) often gets access to higher-tier support and account management from carriers. It may also unlock access to newer technologies (like nationwide SD-WAN or advanced fiber networks) that a small single company might not deploy alone. Plus, internal IT talent can be shared or centralized – instead of 15 small IT teams each struggling with telecom issues part-time, the firm might have a dedicated network architect overseeing all, raising the competence level. All these factors contribute to more resilient and future-proof telecom capabilities for the portfolio.

Implementing a Unified Telecom Strategy (How NCG Helps)

Achieving portfolio-wide telecom standardization is a complex project – it requires technical expertise, coordination across companies, and skilled negotiation. This is where partnering with specialists like NCG (National Communications Group) comes into play. NCG assists private equity firms in transforming a fragmented telecom environment into a unified, well-oiled machine. Key elements of NCG’s support include:

• Portfolio-Wide Contract Design: NCG works with the PE firm to design a master telecom contract (or set of standardized agreements) that covers all portfolio companies’ needs. This involves analyzing existing contracts and rates, then crafting terms that will apply uniformly. By standardizing contract templates and terms across the portfolio (service levels, pricing schedules, renewal dates, etc.), NCG ensures consistency and avoids the trap of one-off unfavorable clauses[12]. The result is a portfolio-wide agreement that captures volume discounts and aligns with the firm’s service expectations (e.g., uniform SLA commitments from carriers).
• Centralized Procurement and Vendor Selection: With a master design in hand, NCG leads a centralized procurement process on behalf of the entire portfolio. Rather than each company issuing separate RFPs, NCG runs a consolidated RFP or negotiation leveraging the total scale. Suppliers are evaluated not just on price, but also their ability to serve all relevant geographies and meet the portfolio’s technical requirements. By consolidating spend, the negotiating position is much stronger, often forcing carriers to compete and significantly improve their offers[13]. NCG’s industry expertise and benchmarking data help ensure the portfolio isn’t overpaying and is getting best-in-class pricing. This step often yields the initial cost savings that justify the consolidation effort.
• Project Management of Rollout: Moving dozens of sites and multiple companies onto new standard solutions is a project of considerable scope. NCG provides robust project management to coordinate this rollout. This includes scheduling installations or cutovers in a logical sequence, managing any needed equipment or software deployments (such as SD-WAN devices at each location), and minimizing downtime during transitions. A centralized project management approach means lessons learned at one company can be applied to the next, and issues are resolved once for all. NCG also ensures that target timelines are met and that there is accountability – something that was lacking when each company managed installs in isolation. With professional oversight, the portfolio can upgrade or transition technologies faster and with less disruption than if each business tried to manage its own telecom projects.
• Ongoing Telecom Management & Support: Perhaps most importantly, NCG provides ongoing support after the initial consolidation project is complete. This includes continuous monitoring of telecom expenses to catch any billing anomalies or opportunities for further optimization. NCG acts as a single point of contact for vendor issues – if any portfolio company has a service problem or needs a change, NCG interfaces with the carrier, leveraging the master agreement’s clout to get quick resolution. They also handle moves, adds, and changes as the portfolio evolves (e.g., a company opening a new branch simply contacts NCG to order service under the standard contract). By providing this centralized support, NCG ensures the hard-won savings and efficiencies are sustained over time. It prevents the creep of old habits – like unchecked auto-renewals or paying for idle lines – from re-emerging. Essentially, NCG continuously optimizes the portfolio’s telecom environment, conducts vendor performance reviews, and keeps the contracts aligned with market trends. This level of proactive management is something few individual companies could do on their own, but at the portfolio level it’s both feasible and highly valuable.

Throughout this transformation, NCG brings a consultative, data-driven approach. The goal is not a one-time tweak, but a lasting operational improvement across the portfolio. By designing the solution, executing it, and then running it day-to-day, NCG allows the PE firm’s operating partners and the portfolio company CIOs to focus on other strategic initiatives, confident that telecom is under control.

Conclusion: From Complexity to Competitive Advantage

In an era where operational excellence separates successful private equity investments from mediocre ones, previously overlooked areas like telecom management are moving into the spotlight. Fragmented telecom arrangements across portfolio companies lead to inconsistent pricing, hidden costs, and avoidable delays – exactly the kind of inefficiencies that a value-focused PE firm aims to eradicate. The growing practice of standardizing telecom across portfolios is a direct response to this challenge. It harnesses the collective scale of the portfolio to drive better pricing, stronger vendor performance, and tighter control. Just as importantly, it transforms telecom from a source of headaches into an enabler of speed and scalability (think faster store openings, smoother M&A integrations, unified cybersecurity policies, and more).

The trend is clear: private equity firms are adopting a centralized telecom strategy as a value creation lever, much like they do with other procurement categories. Backed by credible data and early successes, this approach delivers measurable ROI. It’s not a simplistic cost-cutting tactic, but a strategic move that can boost agility and strengthen the investment thesis (for example, by making bolt-on acquisitions easier to integrate, or by reducing the risk of unforeseen IT problems hurting an exit). And while the technical lift is non-trivial, partners like NCG are enabling these transformations by providing the expertise, scale, and execution capability needed to unify telecom environments without disrupting business operations.

For C-level leaders in PE and their portfolio companies, the message is: Don’t let telecom be the weakest link in your value creation plan. By standardizing and consolidating telecom infrastructure and contracts, you convert a formerly chaotic cost center into a streamlined, optimized asset. The result is not only cost savings (though those are often substantial) but also a stronger foundation for growth. With better connectivity, consistent service quality, and central oversight, the entire portfolio becomes more resilient and easier to manage. In the competitive world of private equity, these advantages can translate to faster EBITDA improvements and smoother exits – outcomes every PE firm is chasing. Embracing telecom standardization across the portfolio is proving to be a smart play in that direction, turning what was once seen as a back-office utility into a source of competitive edge[10][19].

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_{[14]Custom Telecom Expense Management Software: The Future of Financial Efficiencyin Telecom - Matellio Inc}

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