Since the year 2000 telecoms technology has been moving apace, and with so much “free” stuff around, we take a look at ways to make sure you know what’s free and what’s not.
Back in the late 1990s, telecoms was a good business to be in. Problem was, you needed cash to be in it. About £30k would buy a “Reseller licence” for selling cheap phone calls off the back of the new telecoms networks springing up across the UK. Add the cost of billing systems, administration and lots and lots of staff, and starting a reseller business from scratch was not for the faint-hearted. Even well-established telecoms businesses struggled to muster the cash from their balance sheets.
Quite a few telecoms “agents” and “consultants” came out of the woodwork at this time. These guys didn’t have the funds for the big licences; they just took nice fat commissions from businesses grateful for saving them so much money, whilst accepting a healthy cut of the profit from the networks they recommended. The business saved, the consultant earned and the carrier got another customer. Even the extra equipment needed for re-routing the calls was reliable. Everyone was winning.
The extra equipment normally came in the form of a call router, which effectively “piggy-backed” on the phone lines, adding the necessary codes to the calls for re-routing at the local phone exchange. The newer phone systems could also be configured to add the codes without any extra bits having to be plugged into the phone lines, and thousands of UK businesses used the call savings to buy new telecoms equipment and update their communications.
The smarter telecoms providers offered everything – phone calls, phone systems, support and account management, and the “all-in-one” service put them a step in front of the newer, smaller outfits in what was already a hugely competitive market.
With the new millennium the goalposts shifted thanks to two major changes in technology. Carrier Pre-Selection, known simply as CPS, meant that phone systems or routers weren’t needed to route calls to a cheaper provider. It was all done at the exchange. Overnight, new phone systems lost their advantage as part of the cheap calls deal. The cost of entering the phone calls market had plummeted and one-man-bands with little or no expertise were arriving to cash in.
The second big change was LLU – local loop unbundling. Up until 2003, phone lines and phone calls were separate entities. In the 1990s you could use whoever you liked for phone calls, yet the phone lines would almost certainly be provided by BT. LLU allowed phone call providers to sell and rent lines via BT Wholesale, now Openreach, at slightly lower costs. Customers liked the idea of finally moving to a sole telecoms provider with a single all-in-one phone bill.
That brings us up to date. Thousands of providers offer a huge variety of business telecoms services, some good, some bad. Some offer things for free, some fix costs, and some fix you in some pretty expensive contracts. The latter is becoming a little too common.
Costs continue to fall for phone calls, lines and equipment, meaning that telecoms dealers can often give away some services labelled as “free” in order to gain elsewhere. But we all know that there’s no such thing as a free lunch, right? Well, nearly.
Believe it or not, it is possible to benefit from a handful of genuinely free services available in the telecoms market. 0845 “local rate” numbers are a good example. Many providers offer them to you absolutely free with no set-up, rental or associated call costs. The costs are covered by the people who call you. If you’re paying for 0845 numbers at the moment, you shouldn’t be and the same goes for fax-to-email numbers and audio conferencing “chat room” services – all are free services funded by the inbound callers.
The story is similar for other non-geographic numbers. 0800 “Freephone” is now mostly free to set up and free to rent, with a low cost associated with your inbound calls. The same goes for 0844, except you’ll be earning a rebate from inbound calls instead of paying for them. 0844 is thought of as the modern replacement for 0870 numbers with cheaper costs to the caller.
And that’s about it. Phone line installation, line rental, landline calls and calls to the mobile networks have a cost, all charged to the dealer and passed on to you with a bit of margin added. Phone systems, business mobiles, broadband and associated equipment all have costs too, so if you see any of this offered for free your provider is inflating costs elsewhere. Read the small print.
What about VoIP and internet calls? Yes and no. Internet calls need voice-quality broadband if you want to hold a business-quality call, so most people find themselves spending out on new internet connections. Worse, as soon as you call someone not connected to the internet, the call “breaks out” to the public network costing as much as 4 times that of a normal one.
Most of all, watch out for the wild claims, false figures and offers of free phone systems when you sign up for call and line rental savings. A sure sign of a bad deal is an aggressive closing technique and/or a “right-now” offer. Take your time, talk to people and look around – remember: telecoms is a buyer’s market. Too many bosses still believe the hype, don’t spend the time checking the figures for themselves, and end up counting the cost soon afterwards.
Too many professionals forget that a business exists to make a profit, and to make a profit there is always a cost.
Southern Communications were established in 1965 and provide complete business telecoms solutions including free 0845 numbers, phone systems, business mobiles, VoIP and broadband with complete telecoms management and consultancy services.
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