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...

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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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