Five Things you Should Know About the Telecoms Industry
The telecoms industry provides an absolutely essential service but it is one of the least trusted industries in the UK. Common complaints include being tied into long contracts, confusing tariffs, slow response to faults and a general feeling of being exploited. Most suppliers rely on the general principle that their customers do not really understand how their telephone services work and what they are paying for. As a customer, you know what to expect to pay for a new car or for a new computer but you probably do not know the true value of the telephone equipment and lines which you need. We would like to share some insider knowledge about the industry so that next time you make a choice you will be better prepared.
Contracts (and how to escape from them)
Suppliers make you sign a contract for a minimum period of service mainly so that they know for sure where their money is coming from every month. There is nothing better for any business than regular guaranteed monthly income which they don’t have to work too hard for. In some cases suppliers offer you free or discounted equipment in return for a long commitment to their services and naturally they want to earn their money back. That is reasonable up to a point but what do you do later if you become unhappy with the deal?
Most suppliers would ask you to pay a hefty cancellation charge but you do not have to accept that. Times have changed and Ofcom has become stricter with suppliers. You are entitled to switch and your supplier should only charge you a “reasonable” fee to end your contract early.
Some useful things to know are that:
- You have the right to transfer your telephone numbers from one supplier to another at any time even if you are still in a contract.
- A supplier is entitled to charge a penalty if you cancel your contract early but the charge must be reasonable and it must only take into account the actual cost to the supplier.
- If your contract contains clauses which refer to early cancellation penalties then these must be shown clearly on the main page and the calculation method must be clearly explained.
- If you didn’t actually sign anything then it probably is not enforceable.
- VIP VoIP never ask our customers to sign a minimum term contract. Our customers stay loyal because they like our service.
The wholesale cost of routing calls to landlines and mobiles throughout the world has been on a downward trend for many years. Suppliers can make high margins particularly on calls to mobiles. As a general guide you should not need to pay any more than 1p per minute to call a UK landline or 5p per minute to call a UK mobile. Another traditional cash cow for suppliers is international calls. We have heard of people paying more than 5p per minute to call Europe and the USA. There is no need for that anymore. There is huge completion on these call routes and plenty of capacity. You should not expect to pay more than 2p per minute to call these destinations.
You might want to think about these figures before you agree to a package deal with your supplier which might tie you into a contract for another year or two.
Until recent years if you wanted a non-geographic number for your business then your choice would be either a 0870 “national rate” or 0845 “local rate” number. The companies which offer these numbers make good money from them and calls to these numbers are expensive from any network. Potential customers can be put off from calling these numbers. A friendlier option these days is an 03 prefix number. These are non-geographic and they cost about the same for a customer to call as a regular landline number. The worst kind of numbers to call (from a customer’s point of view) are those with 0843 and 0844 prefixes. These are revenue sharing numbers. The businesses which use these earn about 50% of the retail cost of the call. Calls can cost anything up to 10p per minute and the operator takes half. All that time that you are waiting on hold is earning money for the company you are calling. A large number of non-geographic phone numbers which companies publish are mapped to a regular landline number. A very useful website is www.saynoto0870.com. This allows you to look up the “real” number behind an expensive non-geographic number so that you can make your call cheaper.
Beware of “Extra Care”
Don’t be conned into or any term like that. It can add up to about £50 plus per month and being in the trade, we know that there is absolutely no value being added at all. These are just items added to the bill to increase the supplier’s profit. They are placebos and there is no need to pay for them. VIP VoIP provide these services as part of our regular service and we believe all responsible telecoms companies should.
How much is your PBX really worth?
If you were buying a new computer you would have a fair idea of the price you should reasonably expect to pay. Prices are transparent. The same is not true for telecoms equipment. You can’t buy PBX systems in the shop and suppliers rarely sell directly to end users. You buy a system through a dealer who also wants to install your lines and charge you for your calls. A PBX system is essentially a computer with some specialised electronic components. They cost about the same to make as a computer (i.e. a few hundred pounds) but your dealer will try and convince you it’s worth 10 times the amount. The dealer is making a wonderful margin which you are subsidising. It’s a similar story with office telephones. It only costs a few pounds more to make a digital office telephone than a regular domestic phone but you can expect to pay £100 even for a basic unit. The other frustration is that you have to buy phones from the same maker as the PBX. You are a captive customer. If you want to know what your system is really worth then search on ebay for a second-hand one. You will be surprised.
With VIP VoIP you need no expensive or outdated equipment. Standard IP phones will connect to our service just fine along with all major software phones. You’re free to choose the phones you want from all suppliers and we’ll be very happy to advise you.