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Are You Paying Too Much For Long Distance?

Leading-edge Fortune 1000 companies are paying less than 1 cent per minute, on average, for their toll free and long distance services. As the telecom industry continues to evolve, these are the best practices to ensure optimal rates.

1. Centralize & Consolidate--Move all telecom trunks and voice systems into a few data centers. This will dramatically reduce access costs, offer economies of scale, provide lots of flexibility, while still providing a highly reliable service

2. Add Providers--Do not rely on a single IXC or 2. For outbound calling, there are 3rd parties that peer with all the major networks such as the cellular and cable providers. For inbound toll free, use a RespOrg service so that you are not locked into a single vendor. For inbound long distance, peer with those networks that callers use the most and bypass the IXC.

3. Use Skype--Skype offers SIP trunks for business with quality that is good. For example, with AT&T or Verizon, a company may pay 75 cents/minute for a call from the U.S. to an India based mobile user. With Skype, this call can be less than 10 cents/minute and the India user can be on a 2G phone without a Skype client. It can be even cheaper if the endpoint is a Skype client.

4. Fixed Rate Billing--Move to a billing model based on maximum number of concurrent calls versus one based on per minute of usage. This is a similar model used for private and public IP networks. Forty percent of the phone bill is the phone bill... Unfortunately, this opportunity is not applicable yet to overseas calling, but it is coming with some Internet-based services.

--Instead of a busy hour, most companies have a few minutes a day where phone usage peaks at the top of the hour as conference calls overlap, as old ones end and new ones start up. Manage call admission control such that all in-bound calls are given a priority and outbound calls (esp. conference calls) are a lower priority. 6. Dial Plan Management--With more providers and network options to send a call, use a device like a session manager to manage the dial plan to ensure calls are taking the optimal path. Also, Intrastate calling should be eliminated.

7. Flag Expensive Calls--Calls that are above a threshold of, say, $10 per call, should be investigated to see if other options are available. Educating users on options, especially for overseas calling, plus making them aware that costs are being monitored, helps ensure good user behavior.

8. Avoid Long Term Contracts--The telecom industry will continue to be in flux. Carriers are not motivated to reduce rates unless they are forced to. Keeping the minimum commit rate low will help ensure maximum leverage and flexibility.

9. Peer with Cellular Provider--Most enterprises partner with a cellular provider for their employee cell phones. By directly peering with this provider, all the IXC long distance charges can be avoided for intra company calling.

10. Advertise LD #--For conference bridges and customer service, give callers the first option of a standard long distance number versus using a toll free number. A lot of users who work from home or on the road have unlimited calling plans.

As companies move to SIP trunking, they are employing the above best practices. But most of these are not dependent on SIP trunking, so enterprises are encouraged to act now.

In my experience, most Fortune 1000 companies are paying, on average, 2 cents per minute, including access. The capital investment required to realize these savings shown here can normally be recouped within a single year and will have a 40%+/year ROI.