Save money on 800 fees

The simplest strategy here is to switch your service to a carrier that does not bill fees per 800 number, or get your current carrier to waive the fees. Like the banking industry, the telecommunications industry earns a significant amount of fee income. If the customer has the right amount of leverage, the average long-distance carrier will waive the toll-free number fees. A customer who has just completed a term agreement with a carrier and is renegotiating a new contract probably has enough leverage to get these costly fees waived.

When negotiating contracts with carriers, it is of the utmost importance that the cost of fees be clarified before executing the agreement. During negotiations, long-distance carriers will usually steer the conversation to discuss discounts and rates. Too many customers have allowed the negotiations to end here. When they get their bill, they may be surprised to see miscellaneous fees increase the bill by as much as 30%.

As could be expected, carriers are never happy about losing business. Most carriers will fight to retain a customer once they receive a change of RESPORG form from a competing carrier. They are not allowed to refuse to give up the number, but they do not have to forfeit the business without a fight. The first tactic is to call the customer directly and try to retain the business. The incumbent carrier may offer lower pricing or other premiums such as a free month of service in an attempt to save the account. If the customer is switching due to poor service, the carrier will probably attempt to resolve the problem.

Beware of the name mismatch game

If none of the tactics mentioned works, the incumbent carrier will play the name mismatch game. Upon receipt of the change of RESPORG form from the new carrier, the old carrier will double-check the exact spelling of the customer’s name. If the names mismatch only slightly, the carrier will refuse to release the number. I have seen numerous cases in which the current carrier had misspelled the company name years ago, and now that the company wants to change carriers, the current carrier will not release the number because of a mismatch.

For example, a company called Dave’s Trucking and Transportation uses Sprint for its 800 service. Dave wants to switch to AT&T, so he fills out the proper forms with the AT&T representative. Sprint refuses to release the 800 numbers because it knows the account as “Dave’s Trucking and Transportation, Inc.”

In an era where mergers and acquisitions cause business names to change frequently, the name mismatch game can be a very effective way for a long-distance carrier to earn an additional 2 months’ worth of billing.

Save money (and hassles) when switching inbound long-distance carriers
When you fill out the RESPORG forms with your new carrier, give the company a copy of your current long-distance bill. This way, the carrier can ensure the name on the forms will match exactly. Better yet, have the company send the bill copy to the new carrier along with the RESPORG form. This may save you up to 2 or 3 months of extended billing with the old carrier, as well as the frustration associated with micromanaging your long-distance carriers.

Save money by using an 800 number instead of cards

Most telecommunications cost management measures do not require any advanced knowledge of the services or billing. By taking time to review the phone bills each month and apply a little common sense, most people should be able to successfully manage their telecommunications services.

Inbound long distance

Inbound long distance has its roots in AT&T’s WATS, which was more of a bulk pricing service than a sophisticated telecommunications service. Nonetheless, In-WATS service could be used by a business to allow its traveling employees and remote customers to call in for free. The business being called that signed up for In-WATS service paid for the calls. This became a significant competitive advantage for sales organizations that relied on their sales to come from inbound phone calls. Consumers are far more likely to call a business with toll-free service than if they have to pay for the call themselves.

Because inbound long distance requires more of the carrier’s network resources, inbound long-distance rates are slightly higher than outbound long-distance rates. In general, inbound long-distance rates are one cent higher than outbound long-distance rates. As previously mentioned, most carriers charge a monthly recurring fee of $10 to $20 for each toll-free number. The higher rates and fees for inbound long distance ensure that the carrier’s additional costs for this service are covered.

The “ring to” number

When signing up for inbound long distance today, customers must tell the long-distance provider to which number they want the 800 number connected. 800 numbers are virtual numbers. They do not have physical wires assigned specifically to each 800 number. Instead, the calls come in across a regular phone line that is specified by the customer. This number is often called the “ring to” or “pointed to” number.

A small business with five local lines would probably choose to have its 800 number pointed to its main phone number. With a simple phone system, the person who answers the phone may not know if the caller is using the 800 number or not.

Change carriers for inbound long distance

Prior to 1993, if customers wanted to switch long-distance carriers for their 800 service, they would also have to change to a new 800 number. AT&T controlled most of the long-distance market at that time, and its rates were usually 5% to 50% higher than competitors’ rates. If customers wanted to change carriers, they would have to be willing to put up with the hassles involved with changing 800 numbers. If the number was used only by company employees, the change might not have been too cumbersome. On the other hand, if the number was highly publicized and advertised, the potential lost business could far outweigh the cost savings associated with switching to another carrier.

In 1993, 800 number portability was implemented. As a result, customers can switch their inbound long-distance service to another provider but retain the same 800 number. However, a change in the RESPORG must take place. To change carriers, the new carrier requires customers to sign a change of RESPORG form, which is then sent to the old carrier and serves as a request for the old carrier to release the 800 number.

All of the carriers cooperate nationally to keep track of who is responsible for each 800 number. Even local carriers participate, because they may be the RESPORG for a customer’s 800 number that is used only to carry intralata traffic. The carriers usually explain that they must charge a fee for each toll-free number a customer has so they can fund the national toll-free directory and database. The fees per toll-free number may be as low as $1 per month with WorldCom or as high as $50 per 800 number with AT&T’s MegaCom billing.

Long-distance service

Long-distance service consists of three major service types: outbound, inbound, and calling cards. Outbound long distance is what most of us know as direct dial long distance. To complete the call, the caller dials

1 + area code + number

Inbound long distance, also known as toll-free service, refers to a caller dialing an 800 number to reach a business. It is a toll-free call for the caller; the toll shows up on the business’ long-distance bill. Since the finite number of 800 numbers is running out, new numbers such as 888 and 877 are now used for toll-free calling.

Calling cards are most frequently used by callers who are traveling. Rather than use coins in a payphone or cause a charge on a host’s long-distance bill, calling cards offer a caller convenience and itemized billing each month. The complex world of long-distance service is not as baffling if you understand these three categories of any long-distance calling.

How a calling card call works
Calling card long-distance rates are higher than outbound and inbound rates. The cost of a calling card call normally includes a surcharge in addition to the per-minute rate. The surcharge may be as little as $0.15 per call or as much as $2.50 per call for some older cards still in circulation. The surcharge is designed to cover the cost of setting up the call.

During the past few years, the trend is that surcharges are lower or not charged at all. A business today must choose between cards with low rates that have a surcharge, or flat-rate cards that have no surcharge. In general, a business that makes very brief calling card calls should use a flat-rate card. Businesses that make long calls are probably better off with a traditional card that charges a surcharge. On a typical AT&T pricing plan, the surcharge of $0.35 and the cost per minute is the same as the direct dial outbound rate.

Use a discount carrier

The simplest way to cut your costs associated with calling cards is to switch to a discount carrier that specializes in the service. These niche carriers, such as VoiceNet, offer calling card rates that are usually lower than full-service carriers’ rates. VoiceNet advertises heavily in in-flight magazines and uses a wide network of independent sales agents. VoiceNet’s current program is a flat rate $0.149 card with no surcharge, which is one of the lowest rates in the industry.

Occasionally, other discount calling card providers spring up with rates that sound too good to be true. Be careful about doing business with these companies because their actual billed rates may be higher than their actual rates. When choosing a discount carrier, choose a stable carrier that has been in business for more than 2 years.

Once you have chosen the discount long-distance carrier for your calling cards, you should compare the cost. Normally, you can give your current calling card bill to the sales representative who will analyze it and offer a cost comparison. It is a good idea to then do your own comparison.

Prepaid cards
Prepaid calling cards are very lucrative for carriers, which is why they can afford to give them away as gifts so often. These cards are so lucrative because carriers get the revenue from the customer before they actually provide the service. In many cases, the carrier never does provide the service. Calling cards expire, and many are thrown away when they only have a couple of minutes remaining.

Most businesses should stay away from prepaid cards because they hurt cash flows and are difficult to manage. The expense of paying for calling cards before you use them shows up in the company’s books at least 2 months before it would have shown up with traditional pay-after-you-use-them cards. Keeping track of employees who use calling cards is another drawback of prepaid cards. Once the cards are issued, you never know how much they are used because the carrier will not send you a bill that shows the usage.

If you are willing to keep track of all the users yourself, then prepaid cards may be for you. For businesses that use temporary employees or fear their employees will fraudulently use calling cards, then prepaid cards may be the best option.

A few carriers offer a rechargeable prepaid card. ATX, a regional longdistance carrier in the Pennsylvania area, offers a superior rechargeable prepaid card. With rechargeable cards from ATX, a manager can issue cards to traveling employees with a limit, such as $50 per month. If the employee tries to make more calls, he has to call the home office and ask the manager to recharge the card. Rechargeable prepaid cards are very successful in limiting employee abuse and fraud.

Once a perpetrator obtains your calling card number and PIN, he can rack up thousands of dollars in fraudulent billing in just a few days. Using rechargeable prepaid calling cards that have a limit will minimize your risk of being defrauded.