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Minimum Call Charge Trick

TO UNDERSTAND CALL RATES, YOU MUST ALSO CONSIDER THE MINIMUM CALL CHARGE.

The two are crucially interlinked. A low published rate, in conjunction with a severe minimum call charge scheme, means you are paying a higher effective rate than you think. WHAT YOU SEE (on the tariff sheet) IS NOT WHAT YOU GET (on the bill).

As a user, you are probably aware that some of your calls are short, and intuitively you have an uncomfortable feeling that any pricing scheme that involves a minimum call charge of any size results in a small overcharge. But you do not have the figures, and you cannot prove it.

You are wrong ..... on all but the last point. MOST of your business calls are short, and you have ENTIRELY underestimated the effect of a minimum call charge of almost any sort on the true, effective rate that you are paying on a portfolio of calls.

minimumcall_pic_1.gif

Service providers are well aware of call duration histograms, that is the proportion of the calls their customers make that fall into different duration intervals. So they KNOW a clever minimum call charge scheme will result in customers paying a higher effective rate than they are led to believe they are paying, after a simple inspection of the rates. Well, now you can share in that knowledge. Take a look at the graphics.

minimumcall_pic_2.gif

M-Line's experience shows that a very high proportion of calls fall into the short end of the graph. The horizontal axis is of 3 minutes duration, and the histogram has been prepared at 5-second intervals. The cumulative shows that 80% of all business calls last less than 3 minutes, and 50% less than 1 minute. 25% of all calls last less than 30 seconds, so now how do you feel about a 30-second minimum call charge ?

It's no use protesting your business is different. It probably isn't. The above research is a study of business calling patterns, of the behaviour of humans and machines in the office, of the usual mix of voice, fax and e-mail traffic. It is just as valid for an estate agent calling locally as it is for a trader calling internationally. It applies to your business.

OK, so how do you quantify the effect of any minimum call charge scheme? What is the true effective rate when a service provider tells you he is charging 15p per minute for a call to a mobile phone, and finally you come to the realisation that he has rounded each call to the nearest minute above?

M-Line has prepared a down-loadable " SCAM-a-gram" that enables you to make that calculation for yourself. A promised 15p per minute on calls to Cellnet mobiles is likely to average out at 21.2p per minute when you analyse your bill. A whopping 41% deception. Calls to Australia at an apparent 5p per minute similarly end up looking like over 7p per minute, using this model.