Less money, more problems?

Posted on June 3, 2016 by Andrea Mocherman

For the sake of simplicity, some companies are choosing not to manage conference calling on their Private Branch Exchange (PBX). Instead, they’re outsourcing that functionality to conference calling services. There are advantages, such as out-of-the-box features and functions that might demand significant internal resources to build in-house. One particular draw is free conference calling services, because free is a pretty easy idea to get on board with. But if you run a quick analysis, it becomes pretty clear that if you want to manage your conference calling externally, free is frequently not the best or even the most cost-effective option.

Here’s the thing. Free conference calling services aren’t really free. They’re businesses like yours, and they make their money by taking a cut of the minutes you use. So many find ways to make your usage bill as large as they can, knowing it’s not the user that usually pays, but the user’s service provider. But in certain cases, you can be on the hook for bills of a frightening size.

Why free isn’t free

I’m not trying to spread fear and panic. However, I also want to warn you about the pitfalls of free conference calling services that I have seen customers frequently fall into. After getting hit with an expensive conference call bill from a supposedly free service Geoffrey Silvers, CEO of Viva Voyage, said “I couldn’t believe how dishonest the company’s business model was.  It doesn’t tell you anywhere that they are charging fees through telecom companies similar to that of 900 numbers.”

How do these supposedly free services get away with this? When you place a long distance call your local carrier delivers the call from its origination point to a long distance carrier, this long distance carrier then delivers the call to a local carrier near the call’s final destination. Normally this works without a problem. However, due to high infrastructure cost for wireless and phone carriers to bring service to rural areas the FCC designed the legislation to allow carriers to charge more to bring service to these areas low volume areas.

To compensate for the high cost of serving these areas the long distance companies are required to pay a fee called an “access charge” to the local carrier. All too frequently local carriers and “free” service providers utilize this loophole to their advantage. By pumping traffic through these high-cost areas carriers receive an increase access revenue from the long distance companies and will share that revenue with the high volume free service company. These costs must be absorbed somewhere and have the ability to leave you or your customers dialing in with a steep bill if you have not done your research on what kind of plan you have.

Pay to save

Paid conference call services aren’t necessarily a huge investment. For starters, they typically provide a toll-free number to call into, so the call costs you nothing. If you know you’re going to be using the service on a regular basis, the monthly subscription fee can start at just $8.82 for three lines, or $19.00 for 15 lines, depending on which provider you choose.

If you’re paying $0.02/min (a generously low charge when working with traditional carriers), you’ll save money paying for a $19/month subscription the moment you break 950 minutes. With 15 lines in, that’s a little over an hour per user per month. One hour long conference call with 15 internal callers, or (maybe more realistically), three one hour long weekly status calls with 5 participants, and you’ve saved money.

Before you get too excited about the potential savings of free conference calling and laugh at those suckers paying for conference capabilities, take a few minutes to figure out the features you need. Free services might save you money if you’ve got an unlimited calling plan, but the additional features and quality you get for the cost of a couple of sandwiches could be worth the investment.

There are other options

Voice conferencing is the most popular form of conferencing technology. It might be the easiest and most ubiquitous now, but in the face of this century’s technological advancements, it’s not necessarily the most efficient or productive.

The web conferencing market is growing leaps and bounds. In 2012, it was already a $1.8 Billion market. Projections have it growing over 60% by 2017 to $2.88 Billion. Roopam Jain, Director of Enterprise Communications and Collaboration Industry at Frost & Sullivan, explains the rapid growth is driven by the incorporation of communications into the business process, “The integration of web conferencing with business applications that fit into the customer’s existing workflows and enable quicker decision-making is giving a thrust to the market.”

With services like Google Hangouts and the expansion of WebRTC compatibility (experts predict 4.7 Billion webRTC compatible mobile devices worldwide by 2018), it is getting easier and easier to connect and collaborate online. Services like GoToMeeting and UberConference are making for a seamless merger of phones and web conferences, bringing the comfort and efficiency of both worlds together to offer free accounts to those who only require minimal features and access. And because you can connect over your Internet service, there are no hidden usage fees to be worried about.

What do you do now?

You have a decision to make. If phone-centric conferencing is more appropriate for your business and partners that web conferencing, it’ll pay to run a quick analysis to see if “free” services will really save you and your customers any money over an inexpensive monthly subscription.