Is buying bundles of calls in your phone package worth it?

Bundles of minutes – we are pre-programmed to bundle them into our phone packages and often this is the correct thing to do but if you are talking to a VoIP provider you might want to think again.

When you use an analogue phone system there is usually a connection charge of about 17p and then you pay per part of a minute, perhaps 10p per minute for a land line or 14p per minute to call a mobile. This means that a one minute phone call can be 27p and a 61 second phone call 37p. These costs soon start to add up so we mitigate out losses by capping our expenditure and buying a call package.

With mobile phones you just pay for your call time and there is not usually a connection charge. Where did the connection charge come from? How is it that analogue providers need to charge this and not mobile providers. As often happens charging is decided on historical operations. Could it be that the charge harks back to the days when an operator had to physically “connect your call?” I wouldn’t be surprised.

I digress. Mobile phone bills soon start to add up because of the chargeable rate even though there is no connection charge. If you’ve ever been on pay as you go (or at least had a teenager on PAYG) it feels like your phone is eating £10 notes, so we buy call packages because it make sense.

With VoIP there is no connection charge, calls should be charged by the second and the price of a landline minute can be less than 0.4p per minute, that means a 5 minute call would be under 2p and a five minute mobile call around 10p.

Some VoIP providers are bundling minutes into their packages but you pay for it either in your subscription charge or you buy the minutes. When you are looking into this, just think about it carefully. Is the extra you are paying to “cap” your expense really worth it?

At Upstream VoIP our analysis has shown that the average call cost per month per handset is £1.60. Obviously this is an average but we don’t have a single customer who pays more than £10 per month per handset.

Hosted VoIP turns telephone systems on their head and everybody gets corporate based facilities, likewise the billing is totally different and suddenly isn’t a major expense in your business.