Is life too short for per-second billing?
Someone asked me recently whether per-second billing was relevant in a market like the UK. Would it differentiate CSPs, is it what customers wanted? The answer is “I don’t think so”, and in this article I’m going to tell you why.
What is per second billing?
Per-second billing refers to a tariff whereby customers are billed only for the seconds they use, although there may be a “set-up charge” for the call.
What does that mean in practice? Well, it really only affects short calls of less than one minute and the last minute of any longer call. With per-minute billing, customers are charged for the full last minute of their call even if they only used a fraction of the minute. Depending on the call set-up charge, this could also affect the charge for calls whose duration is less than one minute. Thus if a call set-up charge exists and it is say 30 seconds, and you talk for 35 seconds, then with per-minute charging you will be charged for one minute; with per second charging for 35 seconds. If you talk for 25 seconds you will still be charged for 30 seconds (due to the call set up charge).
Will it save customers money?
So this seems like a good idea right? Customers will save money on each call?
The answer to that is possibly. Of course how much money you will save depends on the tariff and whether it is regulated. It’s possible, for example, for CSPs to simply raise the charge per second, meaning that in reality you save nothing or even end up paying more. How is this possible? Well if you charge 1 pence per second and the call lasts 35 seconds then you save 25 pence over what you would have paid with per-minute billing. If the call lasts 10 minutes and 35 seconds you still only save 25 pence. But what if the CSP raises the tariff at the same time as introducing per second billing to say 1.5 pence per second, or raises the call set up charge to one minute? You could end... [continues]
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(2010, 11). Per-Second Billing. StudyMode.com. Retrieved 11, 2010, from http://www.studymode.com/essays/Per-Second-Billing-474306.html
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"Per-Second Billing." StudyMode.com. 11, 2010. Accessed 11, 2010. http://www.studymode.com/essays/Per-Second-Billing-474306.html.