Thursday, June 02, 2005

When Switched Long Distance Service is Best

So what's the best phone service for a small or medium size business? Do you buy everything from the local phone company, go with a competitive provider's "bundled" plan, have separate local and long distance services, or scrap everything and jump into VoIP?

The right answer is the one that gives you the lowest total phone bill with the voice quality and reliability you need to effectively conduct business. But which option is the right one? In many cases the a la carte approach will save you the most money. Here's why.

Your local phone company has the competitive advantage for providing dial tone and local phone service. It's no accident, it's the law. The local carrier, also called the ILEC or Incumbent Local Exchange Carrier, basically owns the rights to the copper wires that run to your location. Other companies can use those wires, but they have to lease them at some profit to the ILEC. Your local phone company gives you reliable dial tone service at a decent price.

What your local carrier doesn't own is exclusive rights to the long distance lines that run from phone company to phone company. These are provided by Inter eXchange Carriers or IXCs. AT&T was the original provider of this service, but deregulation has encouraged competitive providers for the last 20 years or so. You have the right to select which long distance carrier handles your state to state and in-state long distance calls, and nearby long distance calls that are also called Intralata or local long distance.

Your local phone company would like you to buy a bundle of both local and long distance service from them. That gives you the convenience of a single phone bill, but usually at quite a price. You are almost always better off keeping your local and long distance phone bills separate.

One competitive long distance carrier we like to recommend is PowerNet Global or PNG. They are a well established company with a good reputation for service. PNG has long distance plans that range from 3.9 cents per minute to 4.5 cents per minute anytime day or night. You would choose the 4.5 cent plan if most of your calls are local and you rarely use $15 worth of long distance calls per month. With this plan there is no monthly fee for low volume usage. The 3.9 cent per minute plan also has no monthly fee if your usage is over $15. Otherwise there is a $2.50 per month billing fee.

If these rates sound good, you can learn more and order PowerNet Global long distance service online. PNG can also help you transfer your toll free numbers and get you new calling cards for travel.

So far, I'm assuming that your office has less than a dozen actual phone lines which may or may not be shared. Once you get big enough to have a dozen or more lines, you'll probably save more by switching to T1 digital line service. This combines up to 24 local and/or long distance lines on a digital line service that can interface with many PBX telephone systems. You can check T1 line prices and get T1 sales help through T1 Rex.

VoIP? It's the hot new technology but isn't necessarily a cost saver now that switched circuit rates have been so dramatically reduced over the last few years. Large enterprises that are building new facilities from the ground up are the best candidates for VoIP telephony.

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