Demystifying your telecoms bill

Reading your telephone bill can be a bit like watching a politician operate. You know something is amiss, but it’s hard to see what, exactly.

While we cannot be of much help with politicians, we’re here to spill the beans on how your telco is billing you. Are you sitting down?

Per-minute vs. per-second billing

Telecoms providers quote call charges per minute, but this is nearly meaningless. While Provider A might charge 98c per minute, and B might charge R1.04, A could still end up billing its customers almost 1.5 times as much as B.

The difference is the billing rate – A might charge its customers per minute or 30-second increments (with a minimum of one minute per call), while B charges per second.

Per-second billing is far better for you, since calls rarely last exactly a minute or multiples of a minute, and 30% of calls last less than 30 seconds. It is only fair that customers only be billed for every full minute they spend on the line, plus a fraction of any incomplete minute spent on the line. On a 3-minute 20 seconds call, this would mean being charged 3 times the advertised per-minute charge plus a third.

The difference can be staggering. Based on random sampling (conducted by Euphoria Telecoms) of 100,000 minutes of call time, the following cost differences are evident between per-second and per-minute billing.

Billing increment Mobile Local / national calls *
All calls are calculated with the same call rate. A blended rate is offered as a single rate in place of separate local and national rates.
Per second R1.19 R0.44
Per 30 seconds, minimum 60 seconds R1.64 (38% premium) R0.54 (23% premium)
Per minute R1.73 (45% premium) R0.57 (30% premium)

In high-volume call scenarios such as call centres, paying 23% to 45% more per call could amount to hundreds of thousands of rands per month. Always insist on pure per-second billing.

Volume commitments

A second way to load a telecoms bill is through inflexibility. Telkom’s SupremeCall, a business package, offers per-second billing, but requires customers to commit to a fixed monthly amount.

If, for example, you commit to a bill of R5000 per month, you will pay that price even if you make fewer calls in any given month (although rollover is allowed – up to a point). So the trick is to under-commit, but then, if you make more calls than the minimum, you lose the per-second billing benefit on the overflow. No top-ups are allowed.

Be sure to ask for per-second rates on any call volumes, as anything else is against the spirit of flexibility of per-second billing. On that note, take care not to be forced into a long-term contract, as you might forfeit market-related price improvements as a result.

Parallel vs. blended rates

Telcos are also fond of distinguishing between national and local rates, knowing that clients tend to be swayed by low local rates when in most cases 50% of their bill is likely to be on national calls. (Also remember that calls over 50 kilometres from source to destination are charged at the national rate.)

Do not, therefore, dismiss a blended rate that may be more than a local rate, but will save you money on bills where national calls predominate.

Connection charges

Another tactic to watch out for is ‘connection fees’ charged over and above the standard billing rate. Many providers, even Skype, charge them, but they are exploitative.

TMS value-add

While many providers offer standard features like IVR, time-of-day scheduling, voicemail-to-email and so forth, many don’t offer an easy to use real-time telephone management system included in the cost.

This is an opportunity cost – not having an easy-to-use way to top up prepaid accounts, monitor extensions across the country or do cost analysis of your bill must therefore factor into your calculation when looking for a new telco.

The benefits of VoIP

When implemented correctly, Voice over IP offers quality telephony, cost savings, productivity improvements and great extra functionality.

  • On IP, you can run a productive unified communication platform while paying zero on branch calls (as much as 40% of calls in bigger companies).
  • Other savings include infrastructure (analogue systems cost R160 per line, while IP systems are charged at the cost of the capacity of your internet link), PBX rental and maintenance costs (VoIP systems can be rented from the cloud).
  • For R15 per channel, VoIP providers can offer hardware called ViBE, which streamlines voice traffic by stripping out unnecessary data, provides redundancy and protects the voice channel from interference by isolating it. On a 4Mbps ADSL Line without ViBE, customers can make 8 simultaneous calls. With ViBE, the number increases to 30-plus.

That old Mzansi feeling

So if you’re tired of getting that old Mzansi feeling, the one where you know you’re being had, but you’re not quite certain how, at least now you know how to stop it. If not in politics, then at least in telecoms.

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Demystifying your telecoms bill