Tuesday, May 26, 2009

Free Conference Calls, Who pays?

We all have used free conference feature and iam sure we love it because it's free. Ever wondered how these companies survive providing free service. It’s a little tricky and complicated. Thanks to the Telco regulations. Apparently the whole free conference call business model works by arbitraging inter-carrier termination fees. So big Telco operators were picking up the bill for all these free conference calls. According to the Telco regulations, long distance carriers need to pay huge per minute fees to terminate calls to small rural carriers. This is required to support those rural carriers help pay for their infra-structure in order to provide good quality phone service.

Things were hunky dory until the operators realized that they were paying huge money to these rural carriers, who were partnering with free conference vendors and sharing the revenue. So lately, big operators have refused to pay these rural carries for free calls, terming them as “illegal”. So it comes as no surprise that Foonz, a free conference call provider, hung up their boots. It’s definitely a wake up call to all those free call service provider that rely on inter-carrier termination fees. Things have changed a lot. Big Telco’s are very watchful of their termination fees and would do anything to block these kind of services. Don’t be surprised if you hear “All circuits or busy” when u dial those free conference call numbers.

What changed the whole game plan is the unlimited nationwide calling plan. With an unlimited voice plan, users can dial these rural carrier numbers for conference calls and still pay nothing. However, operators will have to pay exuberant termination fees to the rural carrier. The regulation as such was intended for good. But this loophole has been exploited by some of these free voice calls companies. Couple of years back, ATT filed a lawsuit in IOWA “deceitful and unlawful schemes” like FuturePhone’s caused a jump from $2,000 per month to $2 million per month in the fees billed AT&T by an Iowa rural Telco.

Here are some of my thoughts:
• As fellow blogger Alec suggested, operator should come up with premium numbers for conferencing features, the price could be a little higher. The revenue from these numbers could be shared between operators and the vendors
• Nationwide unlimited calling excludes these premium services. Consumers interested in using these premium features pay the extra price per minute. Again, the revenue shared.
• Freemium model. Some x number of minutes free every month and charge for the additional minutes used by consumer. Hoping the extra minutes that users buy shall cover the free usage.
• Skype model, Free VoIP conference calls, for PSTN/Mobile origination/termination, charge the users.
• Buy Whole sale bundled minutes from operator.

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free conference call provider said...

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