Understanding your Telephone Bill:

Billing Increments and Minimums

By Ken Rothacker

April, 2003

This is part four in our ongoing series about understanding your phone bill.  Here is the next question you should ask before you sign on the dotted line:

What are your billing increments and minimums?  This is a long distance question, but still worth asking.  Billing increment refers to the smallest slice of a call for which a carrier will charge you.  It may be one minute.  That's not a great deal, but it's still the standard for residential long distance services and cellular services.  Carriers have different levels of billing increments available.  The best deal is one-second increments, with no minimum.  Talk for seven seconds, pay for seven seconds.  Idealistic does not mean realistic, unfortunately.  Look for six-second billing increments.  While your carrier may offer six-second billing, it may only commence after an 18-, or even 30-second minimum call length.  If you talk for seven seconds, you will pay for 30.  Talk for 32 seconds, pay for 36 (30-second minimum, plus one six-second slice). 

For businesses with longer average call lengths, the difference in the net cost of a phone bill between 18- and 30-second call minimums is negligible.  Billing increments have more impact on the bill the shorter the average call length is.  Some carriers may charge different minimums or increments for international calls.  Also, always watch out for deals that appear to have a great per minute price, but carry a big minimum charge per call.  Ninety-nine cents may be a great deal for a 22-minute chat with Auntie Em, but it's a terrible deal just to reach her answering machine.

Strategy: Know which minimum call lengths and billing increments will be used on your bill.  Full minute billing is obsolete and generally a bad deal for long distance customers.

While this might be a question that your rep doesn't want to get into, knowing this information empowers you to compare programs accurately and positions you to make the best decision for your business. 

Industry veteran Ken Rothacker is president of OmniConnect, Inc, a Chicago based telecommunications services agency.  Contact Ken via email at  ken@omni-connect.com.  

For more Understanding Your Telephone Bill, see Ken's previous article.