Thursday Feb 21, 2008

Margins in Consumer Telephony

Here is a little observation on telephone margins that is dear to my heart. Below is a list of rates (in US dollars per minute, taxes and other fees not shown) for various methods of calling from the US to a land-line in Australia. The last four options use VoIP.

Source Carrier Add-on Plan Add-on $/month Rate
Land-line AT&T none – Peak - $4.00
Land-line AT&T none – Off-peak - $2.76
Mobile AT&T none - $3.49
Mobile AT&T World Connect $3.99 $0.09
Land-line AT&T Occasional Calling $1.00 $1.75
Land-line AT&T Worldwide Value Calling $5.00 $0.09
Land-line Time-Warner Cable
- $0.10
Land-line Comcast

$0.09
Land-line Vonage

$0.05
Land-line AT&T CallVantage

$0.04
Land-line Callcentric

$0.0231
Land-line CallWithUs

$0.0148

As you may see, there is a 27000% range in these numbers. Even with that one carrier there is a 100x range. Plenty of opportunity for profit.

Hopefully it is useful to be aware there can be some very steep rates for ex-pat Aussies to call home if they are away from their preferred carrier.

I have been quite satisfied with CallWithUs, if anyone is interested. They even have a call-back feature if I want to call from my mobile.

While I'm on the topic, I should also mention this helpful message I got from my wireless (mobile) provider (although they are no longer my provider):

When you're on the go and don't have the info you need, AT&T 411 is here to help. Whether you're searching for a business or residence - dial 4-1-1 to get quick access to phone numbers and addresses. Plus, with AT&T 411 you can find movie times, driving directions and more. And it's just $1.79 per call plus standard airtime charges.\*

Thanks for the reminder - I will be vigilant to avoid that $1.79 charge, and stick to 1-800-FREE411...

Wednesday May 30, 2007

Case Study - AT&T Customer Relationship Management

Time-line of Events

April 20th, 2006 - I apply for SBC Yahoo Internet, which includes a sweetheart deal that will last for 12 months. Included in the terms & conditions is an early termination fee of $99 is mentioned.

April 21st, 2006 - The service is connected

April 13th, 2007 (approx) - I contact AT&T (had since re-acquired SBC) to disconnect phone & internet service, due to my imminent move to a new apartment. Disconnection is booked for April 14th. No mention from AT&T call center staff of early termination fee.

April 18th, 2007 - AT&T issue me a a bill. It is for $17.22 and is clearly marked "FINAL".

May 16th, 2007 - AT&T issue me another bill. This one is marked "REVISED FINAL BILL", and contains a $99 charge for "EARLY TERMINATION-HSI BASIC".

May 25th, 2007 - I contact AT&T and ask for an explanation. They explain the early termination fee. I ask if I can get my service re-connected. I am told that no, I can not get it re-connected as it has been more than 30 days since it was disconnected. I ask if there is any way this situation can be rectified - suggest that I could reconnect if a credit was made to cover the early termination fee. There is no flexibility available to the person I was speaking to, though they did empathize with my situation.

UPDATE

June 26th, 2007 - I send a check to AT&T for the $99, but include a request for an enclosed copy of this blog entry to be forwarded to their customer service department.

July 27th, 2007 - AT&T send a check for $99 back to me, refunding the early termination fee.

Outcome

So, initially I was disappointed, but ultimately I am happy with AT&T. I could never say that they were not in the right, but I would still suggest that they could give more latitude to the people who work in their call centers.

It would also be wise to advise customers of the pending early termination fee at the earliest opportunity.

About

Tim Cook's Weblog The views expressed on this blog are my own and do not necessarily reflect the views of Oracle.

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