Posted by Randy Kremlacek on May 29, 2012 4:34:00 PM
In one of our last blog posts, we covered Business VoIP installation costs. Today, we’ll describe the various elements that go into monthly costs of VoIP phone service. Each individual VoIP Premise PBX provider has their own pricing model so “your mileage may vary”, but here are the common components that make up most monthly VoiP service bills.
Basic Business VoIP Service
This fee is for the basic Premise PBX service and features. There are two common methods for pricing out this service:
Pricing by VoIP Phones
The simplest method is for the VoIP hosted provider to charge for basic service by the user. The downside to charging by the user is that you get charged the same amount monthly for the kitchen phone as the CEO’s phone.
Pricing by Paths and VoIP Phones
In this scenario, the monthly user price is substantially less, but you are also charged for the number of subscribed call paths (simultaneous phone calls available). The advantage of this billing method is your payment is tied closer to what you use versus paying for the numbers of users.
Fees for VoIP Phone Usage
Again, there are several ways that customers are charged for phone calls on office VoIP services:
Many providers offer an all-you-eat VoIP calling package for domestic phone calls. You pay a flat monthly fee per path or per user.
This is the way that we all used to pay for phone service, by getting charged for phone calls by the minute.
Some VoIP subscriptions include the option to buy usage in bundles of minutes. The rate per minute is less than what is charged on the metered option. Phones calls exceeding the bundle of minutes are charged at a high rate.
Every country has different telecommunications laws and rates. Thus, international calls are charged by the minute on a country-by-country basis.
This type of calling is not included in any unlimited calling plan. It is always billed out on a separate per-minute basis.
Phone numbers on VoIP service have a monthly charge. If you have a large number of DID (Direct Inward Dial) numbers, the monthly cost can be substantial.
Some providers charge for equipment on their monthly VoIP invoices. Sometimes it is identified as a monthly rental fee and other vendors don’t show it as a separate line item but rather charge an inflated “user” charge.
The “E” stands for enhanced. Some hosted PBX providers charge for this service while others absorb the cost for providing this required service as overhead.
Surcharges & Taxes
There are a number of these charges on the typical VoIP service provider bill.
USF is the acronym of Universal Service Fund. It is a fund run by the FCC to which telecommunications companies must contribute. The money is used to subsidize telecommunications in rural and high-cost areas, as well as schools and libraries. It is a floating cost set once per quarter by the FCC. It is approximately 17% of your monthly service costs.
CPUC is the acronym for California Public Utilities Commission. The CPUC surcharge is actually six separate monthly charges bundled together. The proceeds go towards various public programs. The present VoIP rate is approximately 1.9% of your monthly VoIP phone bill.
Many VoIP monthly phone bills will have a regulatory surcharge line item. This is a charge directly from your VoiP provider to cover the costs of administering all of the surcharges, believe it or not!
As many surcharges and taxes there are on a typical VoIP Hosted PBX monthly bill, there are fewer than what the traditional telecommunications companies charge. Believe it or not, you actually save a bundle of money on VoIP due to the lower surcharges and taxes mandated on VoIP.
While VoIP typically saves money and provides great new features, your monthly phone bill still has quite a few separate charges and taxes!
Hopefully, this article on monthly VoIP costs has helps you make sense out of your hosted PBX monthly bill.
About the Author
President | Head Chef
Randy Kremlacek is CEO and Head Chef of TeleDynamic Communications, a Digium Select Partner and four time Digium Pinnacle Award winner. TeleDynamic Communication, Inc. provides premise-based PBX, Virtual PBX, and SIP Trunking services. READ MORE