Knowing available options and choosing service types that fit your business needs are critical elements for keeping telecom costs as low as possible.

Many business owners, managers and controllers make the mistake that telecom cost savings can be found in ‘big ticket” items such as long-distance services. Choosing the correct local telephone service package is the first and most important step in controlling telecom bills.

Three Types of Local Telephone Service

In most states, three types of local telephone service are available to business customers.

1) Flat-Rate Service: the line cost is high, but the user can make unlimited local calls on the line at no extra charge.

2) Message-Rate Service: the line cost is lower than a flat-rate line, but the user pays an additional per call charge, usually $.07-$.12 per call.

3) Measured-Rate Service: the line cost is usually low, but the user pays for each minute of local outbound calling. There is an initial rate for the first minute and a lower rate for each additional minute of the call.

Before deciding on a local phone service type for your business, first identify, or estimate, the amount and duration of outbound local calling for all lines at one location for a one-month period.

Here is one simple example of a business and the appropriate service plan for its usage:

A plumbing parts manufacturer receives hundreds of inbound calls daily. These are calls from vendors, suppliers, contractors, etc. Most of these calls come in on the company’s toll-free number. Out bound local calls are relatively few but when they are made, they can be long. These outbound calls average 10 minutes or more.

The best local service choice for this company is Message-Rate Service.

Why?

Because the outbound local calling is relatively low, but the calls are long. The company could choose Flat-Rate Service, but the cost of each line would be higher than Message-Rate. Measured-Rate Service is inappropriate because the outbound calls are long, and there is a per-minute charge for calls with this service type.

Message-Rate Service allows the company to pay a lower line charge, and then pay once for each outbound call made.

Understanding the calling patterns for your business and learning the local service options available in your area are important first steps in reducing your telecom expenses.

Analyze your local bills now. You’ll find savings you never knew existed!