Saturday, October 4, 2008

I have seen the light.

Having discovered the advantages of á la carte VoIP pricing, I pondered how to extrapolate my experience for general discussion while avoiding the pitfalls of interpolation and abridgement. The Reference Book of Rates, Price Indices, and Household Expenditures for Telephone Service published by the FCC's Wireline Competition Bureau provides a rough estimate of wireline telephone expenses averaging $45 per month in 2007, based on market research by TNS Telecoms. This isn't too far from my own experience with residential VoIP plans which have tended to average about $35 monthly, including additional fees and charges, which can be significant: on BroadVoice's "Unlimited World" plan, for example, "Taxes & Surcharges" account for about 35% of the monthly total. Based on these data, I use an estimated $35-$45 for generic comparison of monthly residential phone bills, or an average average of $40. As I designed our current, á la carte plan, I surmised that after discounting business use, the residential remainder was unlikely to ever exceed $30 in a single month. As the plan took shape, however, I realized that intelligent planning could lower that even further; somewhere in the neighborhood of a $20 monthly average would certainly exemplify what custom VoIP plans can offer, and half the average isn't a bad talking point. ;-)

Though less obvious, another great feature of á la carte or "on demand" plans is scalability, if I suddenly find myself needing to host frequent call-in conference calls between a customer, their overseas manufacturing division, regional sales reps, and myself, the only change I'll see on my invoices will be in usage. I am not aware of any "unlimited" residential plans which offer unlimited channels (simultaneous callers). With currently just three phone numbers, my setup is small enough, and with just enough complexity to provide a good example.

I use one number for my consulting, which has separate extensions, voice mail, etc.; I have a fax number for the luddite crowd, and a home number associated with a family voice mail, options for the caller to forward the call to my wife's or my mobile phone, and a ring group which includes a line in my office. I'll use an even usage split for comparison; for although Codefix Consulting has its own phone number, those who know me well tend to call my home number rather than risk my having a life outside of work.

My primary VoIP provider is and I have two DIDs (phone numbers) ($4.95 ea) and a prepaid, on-demand plan which bills 30/6 at $0.0185/min. My backup provider is who bill $0.0125 in whole minutes; while I hadn't originally intended to acquire a DID through, I found one for $6/mo which includes 3000 free inbound minutes and couldn't pass it up. My base VoIP price is therefore 4.95 * 2 + 6 = $15.90 plus usage, or $7.95 on an even split. Theoretically this leaves me with just over 650 minutes before exceeding my $20 target, but this doesn't account for incremental billing, free VoIP to VoIP calls, and other variables which impinge cost.

It's now more than a month since I dumped Broadvoice, ergo September's charges and complete usage data are available for a real world comparison against a $40 average, a $35 example, and a $20 target. As it turned out we made no outbound calls on the (secondary) trunk and didn't exceed the 3000 inbound minutes, so all billable usage was on the trunk which makes accounting easier. September's total was 9.95 + 6 + 23.38 = $39.28 or $19.64 per split which helps validate my "less than $20 phone bill" theory. Our total usage was 36h 7m 33s (2167.55 min) or nearly 1,100 "home" minutes and more than 2,000 unused inbound minutes-- how much do you talk?