Second Based Billing – Pay For What You Use With Hosted VoIP

Posted on: 2015-04-30 | Categories: Business VoIP

One of the biggest advantages of cloud technology – whether it is VoIP services, data storage or other SaaS capabilities – is that enterprises need only pay for the resources that they have consumed. So what does this mean when it comes to hosted VoIP? Does it make any difference to the total monthly expenditure for a company?

Pay For What You Use

When VoIP providers advertise that clients pay only for what they use, it does not mean that traditional telecom operators are overcharging their customers. To use a hypothetical example, no one is implying that phone companies charge for 400 minutes when the client has only used 350. However the amount and the rates at which customers are charged can vary greatly depending upon contracts, minimum commitment amounts and billing practices.

No contracts

Contracts are a staple in the daily communication industry but not so when it comes to hosted VoIP. Enterprises are not locked in to a certain number of months or years before they can switch providers, a fact which encourages transparency and competition among VoIP vendors. This means that a company is not forced to continue using the service simply because they have already committed to it.

No minimum monthly charges

Phone carriers often require enterprises to make a certain number of calls or use a certain number of minutes every month. Clients are charged for this minimum amount regardless of whether they actually use it or not. So for instance, if a contract specifies that 400 minutes of international calls are the minimum commitment per month and the company uses only 350 minutes, they will still be charged for the entire 400 minutes.

Per second billing

Even without contracts or minimum monthly charges, there can be a substantial difference between the monthly expenses for hosted VoIP and comparable analog phone service. This is because most phone companies use minute-based billing so that calls are rounded up or down to the nearest minute (usually up). For example, a call which lasts for 2 minutes 45 seconds will be rounded up to 3 minutes.

While 15 seconds here and there might seem insignificant, it can make a substantial difference over large volumes. On the other hand, most hosted VoIP providers implement per second billing which means that there is no rounding up of calls at all. If a call takes 95 seconds, the client is billed only for 95 seconds instead of 120 seconds which is typically charged by phone carriers. Those seconds can quickly add up when you consider that the average business makes hundreds of calls every day.

As you can see, the combination of no contracts, no minimum monthly commitments and per second billing can make a huge difference in monthly phone bills for enterprises of any size. Even if a hosted VoIP vendor charges the same rates as a phone carrier, the per second billing alone will make it cheaper to use hosted VoIP. When you consider all the benefits that VoIP brings to the table, there is really very little reason to stick to older communication systems.