Save money by moving to dedicated service

When considering moving from switched long-distance service to dedicated service, a simple cost comparison must be done. The up-front installation costs are normally factored in the first year’s numbers. The soft-dollar expenses of the additional time it will take to manage the conversion should also be considered, even though the financial impact is difficult to quantify. The potential cost savings of dedicated service are best illustrated in the following example.

Smith Designs is a young company that sells home decorations through a catalog and a Web site. The business has grown significantly over the past few years, and now the ordering and customer service is handled by a small call center staffed by 20 employees. Smith has always used switched long distance, but the long-distance representative is now proposing dedicated T-1 service. Table 1 shows the cost comparison.


Table 1: Switched Versus Dedicated Rates

Should we install a T-1?
When considering installing a T-1, you should ask your long-distance provider and your equipment provider the following questions:

- What equipment upgrades, if any, does your phone system require?

- What are the costs of these upgrades?

- Will the long-distance carrier cover this expense?

- What is the cost of installation for the T-1?

- Will the long-distance carrier waive this expense?

- What are the new domestic rates? International rates?

- How long will the installation take?

- How soon can the installation be scheduled?

- How much time will pass between the signing of the contract and the T-1 installation?

- Can we schedule the conversion to take place on the weekend?

- How will the conversion be tested?

Save money by removing dedicated service
T-1 monthly recurring costs have declined over the past few years. More and more customers are using dedicated long-distance service because of the tremendous opportunity to reduce costs. Some businesses, however, are doing just the opposite and are canceling their T-1s to cut costs. This is especially true for manufacturers that are closing facilities. When a facility is closed, a skeleton crew of workers remains at the old site for a year or two. They will make fewer long-distance calls and no longer need their T-1. They can instead allow their long-distance calls to be routed across regular local lines.

Save money by moving switched loose lines to dedicated
A common long-distance inefficiency is having switched long distance at a location that has dedicated service. A printing company routed its AT&T long distance across a T-1 for almost 10 years. When it ordered a new 800 number, AT&T’s customer service representative overlooked that the 800 number should be routed across the T-1, so the 800 number rang in on ordinary local telephone lines. Once the problem was discovered, AT&T agreed to redirect the 800 number to ring in through the T-1. This cut the company’s cost for these calls from $0.10 a minute to $0.06 a minute.