Reducing Your Telephone Costs

Know what costs to reduce –Reducing costs is sometimes just a percentage game with a focus on the areas of main expenditure. A 25% saving on an £60,000 telecoms bill is more important than working towards a 50% reduction on a £4,500 spend on vending machines.

Length of Contracts – Signing a contract for 1-3 years is good for the telecoms company as reductions don’t have to be passed on and customers cannot benefit from moving to a lower cost provider. Also, if there is a 3-month notice period, who at your organisation will send out the letter to the telecoms company?

Know what you can achieve – People are busy. Who will be responsible for reducing costs? It may be more efficient to hire an expert who works to a tight deadline and is motivated to deliver real results.

On-going monitoring – Measure the future savings as initially, any new supplier knows that they must perform. The key is to check that after the ‘honeymoon period’ prices do not creep up whilst service levels fall
Did you know that telephone costs can often be cut by as much as 40% – this is even where another telecoms company is being used.

Calls to Mobile – Another major area with approx 62 million mobiles currently in use in the UK. These cannot be avoided and often account for over 50% of the monthly call spend. However, rates are falling – in October 2004 there was an OFCOM imposed tariff reduction and there will be more in the future. Competition is also causing telecoms providers to cut their margins.

Minimum Call Charges and Rounding – Take an example where the headline rate for a local call is 1.5p per minute. Now with a 1p minimum call charge a 20 second call will cost 1p or double the advertised rate. If calls are rounded up to the nearest minute the cost will be 300% more than expected. In addition, 30% of business calls are below 30 seconds and nearly all business calls are under 2 minutes. What impact are these two areas going to have on your telephone bill?

Capped Calls – Another minefield. With most business calls of less than 2 minutes duration, these calls would be considerably more expensive on a capped call tariff. Some major providers have a 7p call set-up charge for calls to mobiles plus a per minute rate of 10p. So therefore a 1 minute call on this capped call tariff would cost 17p or a 30 second call would cost 12p, considerably more than they would cost on a standard per minute tariff. 90% of businesses on capped calls tariffs are paying much more than they should be paying.

Line Rental – This can now be easily reduced by between 10% – 25%
Calls to expensive 0870 numbers – Sometimes inevitable but there are numerous ways with which you can reduce this unnecessary expense.

1. Ask the company for their ordinary local number in case you need to call them from abroad.

2. Look at your phone when they call you. If you have caller display, their real number might show up.

3. Look up their number in BT’s online directory inquiries or on their web site or on Their real number might just be listed.

4. Go to An excellent site listing many company’s alternative numbers.