The offer of the telephone companies has evolved over time. Nowadays there are a lot of options in the rates offered by telephone operators: flat or “unlimited” rates, bonuses, economic transactions during the call, etc. When we find so many alternatives, it is important to be well informed, because depending on the type of subscription we have, at the end of the month we may find some surprise that we did not expect and fall into the trap of flat rates.
In today’s article, we will analyse how flat rates work and what we should look out for if we really want to save and avoid falling into one of the traps that many companies offer us.
Pay-per-call rate vs. flat rate
On the one hand, pay-per-call rates generally set a cost per duration of the call, i.e. for every second the call lasts, the company will charge a fee. In short, the customer pays for what he consumes.
On the other hand, with the flat rate, telephone companies offer “unlimited” calls or a package of minutes at a fixed price, which is paid monthly or annually, whether they are consumed or not. Normally, if the total number of minutes is consumed, the user can continue to call but at a much higher price than that paid for the base package. In the case of “unlimited” calls, the word unlimited is put in quotation marks because contracts usually include small prints that state that if you exceed X minutes, they will start charging more for each call. The company’s purpose is basically to mask the real price of what you actually pay for each minute.
Where is the trap with flat rates?
No one can deny that flat rates seem attractive and are in fact what we’re looking for at first, but have you ever stopped to think about whether you really need a flat rate? and, what is the trap of flat rates?
If we carefully analyse how they work, they are really not that interesting, and even less so for companies. We say the latter because a company will usually make a higher number of outgoing calls than an individual, and therefore be willing to pay a higher price for larger packages.
Some of the most common traps are:
- “Buy more because we think the final price will be lower, even if we don’t consume as much“. It is difficult not to fall into the temptation of paying a fixed fee, even if we are not going to make the most of it, because of the economies of scale: “If I buy more quantity, in the end I am paying less for each unit. However, it is a fact that in one way or another, we are paying more than we really need, which is an extra cost.
An example would be: if we contract a rate in which we pay 10 euros a month for 600 minutes, the first thing that comes to mind is that I am paying 1.6 cents a minute, but if I am only consuming 200 minutes of the package, the cost per minute actually goes up to 5 cents, since the 10 euro bill will have to be paid anyway when the month ends.
- “Subscribe more so I can call all my contacts ‘free'”. This is especially true when contracting “unlimited” rates. Many people have the feeling that, because they have a large package of minutes, the calls are “free”, when the reality is that they have paid for something they do not need. We must be realistic about the number of calls we will make in a month to avoid falling into the trap of wastage.
- “Subscribe a flat rate that doesn’t match our level of consumption”. The reality is that each company has a consumption profile and makes a variable number of phone calls according to their needs. It is true that there are companies with a more or less similar strategy and behaviour, and certain consumption patterns can be established. However, the main problem is that, within the same company, they do not usually make the same number of calls each month.
For example, in the summer, there are usually fewer and shorter business calls, as customers and suppliers are on holiday and it is more difficult to match our schedules. That is why, during these months, we will not be able to consume all the minutes of our flat rate.
However, in other months of greater activity, such as the return to routine in September or the last weeks before Christmas, the company’s calls tend to increase, in order to prepare everything for the return to work and finish the last details before the end of the year. This means that the flat rate can fall short in a few months, leading to the extra cost of paying for calls at a much higher price than the base contract.
In conclusion, the lesson that we learn is that we must be aware of the consumption we will make. The flat rate, sometimes, is presented as a perfect opportunity to make ends meet with ease, but then it becomes a problem when making calculations at the end of the year. In fact, even if we are paying the same amount every month, it does not mean that we will always consume the same amount. Actually, this type of rate creates a false sense of calm, which causes us to end up spending more than we would with a pay-per-call rate, where we only pay for what we actually consume.
Being careful when managing our company’s calls is essential if we want to save on our phone bill. Obviously, no offer is perfect or fully adapted to our needs, so it is good to periodically review our phone bill to keep track of spending. Although the market is constantly evolving, we will never be able to find a perfect rate and we must always rethink what we really need and can spend. The easiest way to do this and keep control is to subscribe a per-call rate, since we will only pay for what we consume and we can analyze our consumption over time. The key is not to fall into the flat rates trap.