Manas Kumar, Thinking out Loud

my thoughts & visions for technology

Five Ways To Cut Your Telecommunications Bill

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This article is all about making sure the truth about VoIP is no longer hidden and that you will see how a well constructed VoIP system can save you thousands every year.

Broadband services have become so essential to everyday life that even the recession hasn’t forced most consumers and businesses to give them up. Most broadband subscribers have no idea whether or not their telco/ISP is giving them the best deal for both data and voice services.

So with everyone looking for ways to cut back on monthly spending, there’s no better time than now to turn the screws on business phone bills.

Keep in mind that the telecommunications industry profits from price obfuscation. Every carrier offers a range of plans with confusing names and rules. Few customers understand when “free” minutes begin and end or under what circumstances they’ll incur toll charges. Most businesses have no idea how many peak minutes they actually use in a typical month, and carriers don’t offer warning systems to tell us when we’ve exceeded our monthly allotments.

Now if the truth about VoIP were to be made public (I mean really public), these carriers will have an “up the creek with no paddles” situation at their hands.

You see, for years the telco carriers have obfuscated the truth about VoIP. With siginificant investments tied into the PSTN and cell site networks, these telcos (while I suspect they use VoIP too) dont want to provide true VoIP services to end consumers – WHY?

It’s really simple: While it makes business sense to reduce the cost of producing and delivering voice packets to the end user, it makes no business sense to pass on the savings to them too – Well at least that’s what the telcos in New Zealand think.

As Helen Clarke, former Prime Minister of New Zealand once said – “Telecom is alergic to competition” – Ms. Clarke, that’s about the only point you and I agree on.

So how does VoIP stand to save businesses a bundle of cash?

Unlike traditional PSTN calls, VoIP calls are routed through the internet. Due to the economies of scale, connecting a call over the internet costs up to 10 times less than connecting the same call over a standard PSTN network – this is because with the internet, there is no need for land-based cabling to carry the call data. Given the current infrastructure available within New Zealand, internet is accessible in 95% of the geographical landmass of this country – This means, VoIP calls have abundant resources available for connecting across different extensions.

Just like web hosting made email hosting (please tell me you are not paying for email hosting) a redundant service, Voice over IP stands to make the PSTN network redundant (in the next 10 years I’d say).

Hosted VoIP Solution

The current broadband infrastructure makes it possible for hosted VoIP services to be made available across all major metros in New Zealand.

Hosted VoIP means that you no longer need to have an in-house PABX/PBX system to route your calls. The PBX sits at a data center with tonnes of server grunt and resources available to route calls from anywhere to anywhere with very little dependency on your native broadband connection.

A hosted VoIP solution also means that you can have all the benefits of a grunty, full featured office PABX/PBX for a small monthly fee which includes a lifetime of free upgrades – So as the technology advances, you automatically reap the benefits at no additional costs.

What about call charges

Well, what about them? Without a question, calling through a VoIP system costs far less in comparison to a traditional phone line. For starters, line rentals are unbelievable low. To top it up, in some cases you can get free local calls, national calls at 5c/min and mobile calls at 26c/min.

Below is a price comparison between OctaVarium, a New Zealand based VoIP service provider and all other major telcos (I’ve been advised not to name them).

For this exercise I have looked at a fictitous company that has 5 phone lines and uses 1000 minutes of local calls, 200 minutes of national calls and 300 minutes of mobile calls with standard features like voicemail, call waiting, caller id etc.

Service Description OctaVarium Others
Line Rental (5 lines) $75.00 $261.75
VoiceMail (5 lines) $0.00 $10.00
Call Waiting (5 lines) $0.00 $30.00
3-Way calling (5 lines) $0.00 $5.00
Caller ID (5 lines) $0.00 $20.00
Call Diversion (5 lines) $0.00 $15.00
Total base mthly costs $75.00 $341.25
Local Calls (1000 minutes) $40.00 $45.00
National Calls (200 minutes) $10.00 $26.00
Telecom Mobile (150 mins) $39.00 $46.50
Vodafone Mobile (150 mins) $39.00 $54.00
Total call charges $128.00 $171.50
Total Monthly Bill $203.00 $512.75
Savings with OctaVarium $309.75
Annual Savings $3,717

Now imagine the possibilities in your business?

With Prime Minister Key’s committment to bringing Fibre Optic connection to every home in New Zealand, there will be a time (in the very near future) where businesses would no longer need to bear with the shocking service and business ethics of telcos in New Zealan.

Products like OctaVarium stand to take over the small business market and you as a small to medium business owner in New Zealand, have the perfect opportunity to cut costs without cutting jobs


Written by manaskumar

December 30, 2008 at 4:58 am

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