Pay by the Minute versus Bundled Minutes – Which is Better?
Pay by the Minute? Verus Buy a Package of Bundled Minutes
What Is Best for My Business?
Pay by the Minute versus Bundled Minutes? What’s best for your business, and what’s it depend on? VoIP service providers offer both packages or bundles of minutes as well as pay-by-the-minute service (also called pay as you go). So which one is best?
With a pay-by-the-minute service, you pay a flat rate for calling minutes used. Normally it’s only a small charge per minute, typically under $0.05 USD per minute. You pay the same rate on all minutes used.
With a package or bundle of minutes, you buy a bundle of minutes each month and use as many of them as you want, with a per minute fee if you run over on minutes. VoIP service providers typically offer the bundle of minutes at a lower per-minute charge.
Pay-by-the-Minute Plans
With a “pay-by-the-minute” (pay-as-you-go) plan, you pay only for the actual minutes you use and a small monthly service charge. Monthly service charges depend on the country where the toll free number will operate (where your customers are). This can range from as low as $6 in the United States to as much as $50 to $75 USD per month in some exotic locations.
The exact rate will depend on both the location of the toll free number (originating country where your customers reside), and the termination – VoIP termination to a soft phone on your laptop, mobile phone, or landline in your office.
Bundled Plans
With a bundled plan, you typically pay a larger monthly service charge for a block of calling minutes. These are the minutes that customers use when call your office through your toll free number. The number of calling minutes included in packages of bundled minutes vary by service provider. Typically, service providers offer bundles with as few as 100 calling minutes per month to as many as 5,000 minutes per month.
You would pay a larger monthly service charge with a bundled plan, but no charges for minutes used unless you use more minutes than were included in your bundles.
What’s Best for Your Toll Free Number?
Your choice between pay-by-the-minute plans and packages with bundled minutes depends on how many minutes you need to use and your budget.
If you are a small start-up and will use a limited number of minutes to get started, a predictable pay-as-you-go plan with a small monthly service charge may work best.As you grow and the number of minutes you need grows, you may be able to save money by choosing a plan that packages a large bundle of minutes at a discounted per-minute rate.
You can work out what’s best for you for your estimated call volume (in minutes) by comparing two plans side by side. For each plan, multiply the per-minute rate by the number of minutes you need, then add the monthly service charge. All other features being the same, the lower number will be your best choice.
Example
Suppose you have an office in Atlanta but want to have a toll free number for customers all over the US to call. You’ve estimated that you’ll use about 300 minutes a month for the first few months.
VoIP Service Provider A offers 242 minutes for $15.95 USD per month, and $0.066 USD for extra minutes.
VoIP Service Provider B offers a pay-per-minute plan with a $5 monthly service charge and a rate of $0.069 USD per minute.
Service Provider A cost = $15.95 + (300 – 242) x $0.066 = $19.78 per month
Service Provider B cost = $5 + 300 x $0.069 = $25.70 per month
Here you can save almost $5.92 USD by using Service Provider A. Of course, for about $6 a month, it’s not much of a difference. You’ll be better served in this example by considering other factors like call quality, ease of use, features, and support options.
No matter what your choice, be aware that for most bundled minutes plans, unused minutes do not carry over to the next month, so you don’t want to intentionally over buy.