DIAL A DISCOUNT
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Hauliers can save money on phone and fax bills by taking advantage of frequent user discount schemes offered by both BT and Mercury • BT is imposing higher line rentals and there is no change in standard call charges, but many small businesses could enjoy lower phone bills if they take advantage of improved discount schemes from both BT and Mercury. However, users will have to remain alert to the cheapest route for their calls as some long-distance calls can be cheaper by BT than Mercury The discounts are not automatic-users have to apply for them and pay an additional quarterly charge. This means they will only be of interest where the number of calls exceeds a level-and for both BT and Mercury the threshold has come down. This means many more Mercury subscribers than before will find it worthwhile to join its Frequent Caller Programme.
BT has increased the level of its discounts and simplified them. The previous stepped system, with lower discounts for the first £100-worth of call units in a quarter, has been scrapped. From 1 January 1993, there is a single 10% rate for all units for residential lines (Option 15), and for small businesses (Option 40) two rates-12.4% for the first £200-worth of calls, rising to 15%. For Option 15, this gives a unit cost of 3.'78p (as against the standard unit cost of 4.2p (exVAT) for a quarterly fee of £4 (£3.40exVAT)). So anyone with more than £34-worth of call units regularly on their bill should join.
The entry fee for Option 40 has been reduced, from £8 to £6.20 (ex-VAT) per quarter, which more than cancels out the increase in line rental, from £29.90 to £31.65. Units cost 3.68p (3.57p after the first £200worth). Bills with over £50-worth of call units would benefit.
Mercury's Frequent Caller Programme costs £5 per quarter to join (in addition to the standard annual Pin Code charge-£10 for residential customers, £15 for business lines) and applies to the 2300 (residential and small business) services. It entitles users to reductions on its daytime (prime and standard) rates. Economy rates (evenings and weekends) are unaffected. The discounts vary according to the destination and the time of day, not the number of calls made.
Mercury suggests that savings would now begin to accrue at a quarterly expenditure of around £35 on calls over 35 miles and international calls in prime and standard time.
However, this would require a substantial element of international calls where the discounts are highestnearly 20% to the nearer European countries, around 16% to further ones; 18% to America, and 19.5% to Japan. UK discounts are more modest-10% on normal long-distance calls, and 13% on calls to Mercury's Low Cost destinations.
Anyone making purely domestic calls will make savings on bills over £50, and some from £40 upwards, depending on the mix of destinations. For most small business users, it will make sense to join the appropriate BT option.
Whether Mercury's scheme is worthwhile for many smaller users could be marginal.
AGONISING Rather than agonising over each call-the savings involved will not repay the time spent-work out a few basic rules appropriate to your usage, try to get staff to observe them, and remember to review them regularly. Get itemised phone bills - and study them. Check the destinations of your regular phone-calls. Pin up near each phone a map showing the boundaries of your "a" rate area with key exchanges on either side highlighted.
Mercury sells a "smart" socket which automates the decision-making and routes long-distance calls through Mercury. It costs around £100 but could save a lot of thinking time, or wrong guesses.
Much of the marketing now being undertaken by the two companies is of the irritating sort-aimed at disrupting patterns of usage with shortterm offers. It is timeconsuming to take notice of it, but ignoring it could deprive you of useful savings.
It seems the price of a cheap, competitive phone service is eternal vigilance.
El by Peter Willis Comparing the cost of the two services is complicated by the way they price calls-BT in units, Mercury in real time, to the nearest second, or 0.1p.
But both use the same distance-related charge bands: local; medium distance, up to 35 miles or 56km (London falls within this band, so any 081 number is included); long-distance, above 35 miles. All local calls should be routed through BT. Mercury is, in effect, debarred from competing in this sector, and has to make charges close to its medium-distance rates.
If your premises are passed by your local cable 1 TV company, ask about its phone rates (even if you don't want the cable TV).
On medium distance calls-charged at BT's "a" I rate, or Mercury's Tiers 3 and 4-due to BT's practice of charging by units rather than real time, short calls can be cheaper on Mercury. If, on average, calls end halfway through a BT unit, calls in this band of below three minutes are likely to be cheaper on Mercury Frequent Caller than on the BT 3.68p I rate. Longer, and the balance will increasingly favour BT.
It is not always possible to predict how long a call is going to be when deciding which route to dial. One exception might be when sending short faxes.
On long-distance calls-above 35 miles: BT's "b" rate, Mercury Tiers 1 and 2 in peak and standard periods-Mercury's basic rate is 3.2-4.3% below ' BT's 3.68p rate, and its Frequent Caller rate 13-14% below.
However, where BT operates low-cost routes (the "b1" rate) its prices undercut Mercury's. A 10minute "61" call at the basic Option 40 rate (3.68p a unit) costs 92.2p peak time, 69.0p standard time. Mercury's best rates (low-cost routes/Frequent Caller) are 93p and 71p. Calls up to 2.5 minutes are likely to be cheaper on Mercury's FCP rate.
Low-cost routes differ between the two carriers. Mercury publishes a list of 30 cities and large towns which are low-cost destinations. With BT, "heavily used" routes are designated low-cost, varying from exchange to exchange. London has over 120 destinations, but in other parts of the country, there may be only one or two, or none. Local low-cost routes are listed in the front of local phone book.
On overseas calls, first BT abolished the peak rate (Mon-Fri 15:00-17:00hrs), becoming cheaper than Mercury to the US and Canada during those two hours but a little more expensive (on discount rates) at other times. Mercury has now responded by abolishing what it calls the Prime period and further reducing its rates to remain competitive at both , stanaard and discount rates. Calls to the nearer EC countries are cheaper on Mercury, Mon-Fri 08:0020:00hrs but on BT at other times.
Fixing yourself up with an 0800 number is not cheap. The initial connection charge is £250, followed by a quarterly rental of £50. In addition the call charges-which the owner of the number has to bear-can be as high as 19p a minute, akin to national rates.