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How to Save Money on Your Phone Bill

By Wanda Crosier Swenson*

Companies (and individuals) are being deluged by offers from telephone service providers. To get the best deal, you must first know your calling pattern. Analyze two or three months' bills to find out where you are calling and when. Once you know where and when your calling is heaviest, then you can look for a carrier and plan with the lowest rates for your particular calling pattern.

The best strategy for low-volume customers

Switch around is my advice to low-volume customers. I currently have one line on a 50% off base rates plan with MCI. The most I will pay to call anywhere in the U.S. is 12c/min., going as low as 6c/min., dependent on where and when I call. That's a very good deal for a low-volume user. The promotion is only good for six months; then I'll renegotiate. When the six months are up, I'll call the carrier and tell them I'm looking for the lowest rates I can get and I'll switch to get it—they'll come through with another discounted rate or credits to keep my business. I have another line with a reseller using WilTel as the carrier and another line on a different MCI plan. Tell long-distance companies you're shopping around–and do it!

Low-volume users should look at the Big 3 (AT&T, MCI, and Sprint), but only if they're willing to keep up with promotions. Otherwise, consider going with one of the smaller carriers or a reseller for the best rates and more personalized service.

Mid-size and large-volume users can usually cut a pretty good deal with the Big 3, but should always compare rates and services with the smaller carriers and resellers. The Big 3 may win out in enhanced services that some large businesses may need--video conferencing, data lines, etc.; however, LDDS, LCI, and WilTel have technical expertise that equals that of any of the Big 3.

But first, do your calling pattern analysis, determine your needs—then shop.

Term agreements

Don't sign a term agreement unless the rates are guaranteed not to increase over the period of the agreement. What most companies don't tell you is that the tariffed rate you are offered is not written in stone. Once you sign a term agreement, tariffed rates can be raised, and usually are. This almost automatic increase in tariffed rates may amount to more than any discounts or credits offered.

Evaluating a reseller

Go with a reseller that has been around for several years and has a proven track record. Ask for references—then check them out. Ask the references about their customer-service experience with the reseller. Ask to see a sample billing. Contact the Better Business Bureau. A good reseller is an excellent way to take advantage of rates usually offered only to very large volume users.

What to watch out for

Make sure you "own" your 800 number from a reseller. In some office complexes, for instance, all service may be in the name of the reseller, then they bill your business for your usage. Should you move, you lose your 800 number–it didn't belong to you in the first place. Just be sure to check out any company you are considering. Most smaller carriers and resellers have superior customer service and very flexible billing systems.

Other ways to save money

Check your bills. Request a CSR (customer service record) from your local phone company. It provides a detailed breakdown of everything you're being charged. Verify that all lines billed are in use and that you need all the features included. While consulting for a Chicago-based business, I found they had been paying for 12 local lines they hadn't used for two-and-a-half years. This cost them almost $10,000 including taxes. They had switched to a T-1, so they no longer needed as many local lines for inbound 800 service, but their equipment vendor who handled the installation failed to let them know. This happens.

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