ComputerScope - Telecom Cost Checks

ComputerScope, July 2010

Expense Reduction Ireland regularly analyses fixed line voice telecoms expenses for its clients. Here’s a checklist of the five commonest ways we’ve found you can reduce these immediately, for little or no up front cost.

Call charges.

We find most savings on call charges - on average 25%, but carriers rarely reduce rates unprompted. Ensure the rate basis is per second billing, with no minimum call charges. These increase costs and make comparing prices difficult. Though seldom offered, you’ll often get 5% off line rental too, just ask!

Redundant services and equipment.

We regularly see invoices for these, e.g.

  • redundant lines;
  • obsolete services, e.g., line redirection.
  • redundant equipment, e.g., numerous handsets rented @ €27.50 p.a each.

In one instance, a client had 11 redundant PSTN and ISDN lines. Annual savings totalled €3,600. Check carefully though – no outgoing traffic doesn’t always indicate a line’s unused. It could be for, say, a fax, or alarm monitoring.

Consolidating lines yields savings too – replacing two PSTN lines with one ISDN line saves €113 p.a. The ISDN connection costs €99, so payback takes 11 months. A retail client of ERI’s did this in 80 shops, yielding annual savings of €9,000 for a €7,920 investment.

Consolidating PSTN lines into Fractional or Primary Rate ISDN can save between €2,000 to €4,200 p.a. The connection cost for these is €3,299, but Eircom has regular offers waiving this.

Billing errors.

These are frequent –the Aberdeen Group says 7 to 12% of invoices contain errors.

Errors we’ve found include:

  • Incorrect rates;
  • Minimum call charge unprovided for in tariff;
  • Instructions to disconnect lines unimplemented;
  • Rental charged for unused/obsolete equipment;
  • Invoices for discontinued services.

 GSM gateways.

These route calls to mobiles from your PBX directly onto mobile networks. Gateways are available in interfaces from PSTN to Primary Rate ISDN. Prices start from about €300 for a PSTN version.

Number portability means we’re never sure what network we’re calling. However, our analysis shows the prefix is a reasonable approximation. For one client recently, we found 81% of 087 numbers called were with Vodafone, and 73% of 086 numbers called were on O2. Using GSM gateways they obtained average 6c/min calls to mobiles, compared to the existing 15c/min rate.

In 2003, another client installed three PSTN gateways costing €675. These still yield €800 monthly savings – that’s cumulative savings of ca. €67,000 and RoI of 10,000%!

Directory inquiries.

These cost up to 81.8c for call setup, plus 57c/min for connected calls. Why are these services used in the office environment, when directory information is freely available online? One reason is employees can conceal numbers called – all the invoice shows is the directory inquiries call.

Solutions include blocking calls to directory inquiries altogether or selecting a cheaper service and routing calls to other services onto it. In one case, we obtained €3,000 annualsavings through using a cheaper service and advice to employees.

(Company information: Expense Reduction Ireland is Ireland's longest established specialist consultancy in the area of overhead cost control for business. Since 1996 we have successfully completed over 1,000 projects across 87 expenditure categories resulting in an average of 20% reduction in costs without any diminution in product or service quality. Our client list includes some of the best known names in Irish business and industry.

01 6854474 / 086 8271273 /