Tuesday, 8 February 2011

How much do your calls really cost - part 1

With the current economic difficulties it has become even more important to know how your business call tariff is put together. This may seem tedious when you have lots of other pressing things to do, but it’s a crucial step to carry out so that you understand what you are being charged for your telephony.

Telecoms companies know that the majority of decision-makers don’t have the necessary time or the expertise to confirm whether or not call packages will benefit their companies and this means that if you don’t understand how call tariffs work, you may sign a contract which contains clauses or options that don’t meet your requirements and which will cost significantly more than you expected.

I will cover the main issues with tariffs and plans over the next few pages and give you the tools to avoid getting caught in a bad deal.

Over the next few blog articles I will cover various types of call tariff that you can expect to see from a Telecoms provider. You will then have a little more knowledge in your arsenal so that you can ask the right questions of your provider.

The Bundled Tariff:

Let’s use a simple tariff option that is 1,000 local and national minutes for £10 per month. At first glance you might think it will cost you a penny a minute and is therefore, a good deal. However, if you only use 800 minutes of your allotted 1,000 (that’s 13:20:00) your costs will have gone up by 25%.

A bundle tariff is only worth having if you hit the maximum allowable every month without stepping over into ‘out of bundle’ charges, which can be very expensive.

Another point to remember when considering your 'bundled tariff' is that during the year, (and you may well be in at least a 12-month contract, if not longer) there will be three or four periods where your phone usage will drop: Christmas, Easter and summer holidays. What this means is that you may have committed to paying at least 30% more for your calls, even if you hit your bundle for the rest of the year.

The Bundled Tariff tip:

Avoid the Bundle Tariff unless you know you will repeatedly hit the maximum minutes consistently over the year. Incidentally, less than 5% of businesses will consistently use the maximum number over a 12-month period. So the best advice is to avoid Bundle Tariffs because you will pay over the odds for a benefit you don’t receive and just increase the profit margins of the telecom provider.

In the next blog I will look at Capped Call Tariffs and what these mean to your business.

Part 1 | Part 2 | Part 3

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