THE SECRETS OF VOIP BILLING

We have tried out a variety of VoIP providers in the past few months and the way they bill for calls are almost always unique to specific providers. We thought we’d run down some of these billing techniques in this article so to help us all choose which type of billing system is best for our different applications.

  1. Unlimited Billing. Typically for residential and ‘small business’ users, most VoIP companies offer some sort of “Unlimited” Plan. The best suggestion one can give for these plans is READ THE FINE PRINT!!! You’ll see that most of these plans are unlimited, “Based on the Average Usage of a Residential/Business Customer”. In other words, the providers reserve the right to bill for “Overusage” or to upgrade your plan if they think you’re abusing it. So essentially, what’s so unlimited about them then? How unlimited plans work is the providers think up of an estimate of the number of calls a ‘typical’ client would make…let’s say the slightly above average Residential Customer would make 1,500 minutes of calls per month and a Business Customer would make 4,000 minutes of calls per month. Now let’s say the package is for continental USA and that the providers cost of connection is US$ 0.01/minute and cost of providing a DID (traditional telephone number) to it’s customers is US$5.00/month. Hence they’ll give out an Unlimited Plan of 0.01×1,500 = US$ 20.00/month for Residential Users and US$45.00/month for Business Users. Laws of statistics say that as long as most of their customers will fall well below their predicted consumption they stand to make a ton of profit and the beauty of it is, if specific customers are heavy users (i.e. above the predicted call minutes per month), then the provider can say you’ve ‘overused’ the system and must pay more…hence the provider will never lose money on a single “Unlimited Subscription”.
  1. Pay per Use. A much more versatile plan is paying per use. In this plan either you have a fixed subscription (i.e. for DID rental) then you have to pay for your call charges or you pay for everything up-front. This seems to be very straightforward an upfront vs. unlimited billing, but it’s not. Where the providers differ in the Pay per Use scenario is how they treat your per minute charges.
  1. Minimum Billing – Some providers require a minimum call charge regardless of how long the call is. Some provide a specific monetary amount such as minimum of 1 cent per call, or minimum of 1 Minute Charge. Seems harmless, but over an entire voip system, you’ll be surprised of the amount of calls that last less than a minute!
  2. Billing Intervals – Some providers bill per second, per X second interval, or some even per minute!
  3. Treatment of Sub-cent Charges – Billing for half a cent is obviously impossible and it only makes sense to roundup charges to the nearest cent. However, providers do have the option of aggregating the total call charges and just bill on the Cent level on actual invoicing or practice rounding up sub-cent charges on a per call basis. Rounding-up per call over MILLIONS of call minutes is a Huge money earner. Let’s say a provider offer 1 cent/minute and per second billing, and you make a 90 second call. The Charge should be 1.5 cents. If they round up per call this is charged 2 cents.
  1. Lines/Channels. For those of you using VoIP termination for a PBX, this is a big consideration. Lines or Channels limit the number of inbound and outbound connections your server can make simultaneously. True wholesale termination will give you UNLIMITED number of Lines/Channels. However, hosted PBX providers, DID providers and “PBX termination” typically limits this. Again, if you need this service, make sure it’s available before you sign-up! Some providers discuss channel limitations in very small fine print in the deepest recesses of their websites! And if ever you need to expand your number of channels the additional fees can be PHENOMENAL. For example one provider we tested offered 4 channels free and US$20.00/month per channel over that. Another provider offered 2 channels free and $10.00/month per channel over the first 2…but on minimum bulk purchase of 10 channels!

The bottom line is read the fine print! Also note that we’ve not discussed Quality of Service in this article, you might be getting the cheapest fairest deal with your provider but it turns out he’s running his VoIP setup from a Pentium 3 desktop in his house!

As there’s a multitude of companies out there, make sure you do your research on the companies you sign up with, test various providers before settling with a big investment with one, and READ THE FINE PRINT!

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