An important part of successful wireless cost-control is understanding the exact components that make up your monthly wireless bill. Admittedly, analyzing a wireless bill can be about as much fun as completing a tax return or watching paint dry. Routine analysis and auditing of wireless bills will help reduce overall telecom costs if you know what to look for - and if you know what actions to take in the case of billing errors.
It is important to understand that all of your wireless activities (i.e. making calls, receiving calls, text messaging, directory assistance, etc.) are meticulously tracked by telecommunications carriers' large computer databases.
At the appropriate time of the month, your recent cell phone activity is collected from the carrier's database by management software. The billing information for each component of the bill is then combined together to form your current wireless statement. Because these systems churn out hundreds of millions of wireless bills every month, it is easy to see why wireless bills are rarely "error-free."
Wireless carriers do not produce CSRs (customer service records) the way local phone companies do. The key to understanding exactly what is contained on your wireless billing statement is the account summary page. The following will give you a step-by-step explanation of the components that go into making up the typical wireless phone bill.
1) Number/Name and Plan
The area of the bill that contains the name and number of the account holder and the specific plan the phone is contracted. The number of minutes the plan offers is often contained within this column as well. Phones that are added to the account and/or are part of a "pooled minute plan" are listed as "add-a-phone" or a similar term.
2) Monthly Recurring Access Charges
This section states the monthly fee for the phone that is under contract. This is the typical "recurring" fee that does not change from month to month. Calling plans can vary tremendously and change constantly in the marketplace, but this number should stay consistent unless you specifically migrated to another plan the previous month. Additional phones added to a "pooled" plan are usually in the $10-20 per month range. This number usually reflects factored in discounts and/or service adjustments. (see next)
3) Service Discount/Adjustments
Service discounts and/or adjustments reflects the percentage that is "discounted" based on the wireless contract already in place. Always be certain that the percentage negotiated is correct. More importantly, be sure that the discount is properly applied to the monthly access charges. The amount of this discount can vary widely from contract to contract.
4) Cellular Minutes/Charges
This column lists the exact number of minutes used during the billing period, rounded up the nearest minute. Remember that wireless companies count incoming and outgoing calls as part of a wireless plan. The key here is to compare your typical usage during a 3 month period with the number of minutes that plan contains. Most wireless companies now allow plan adjustments (up or down), but be aware that making any adjustments usually means locking in for another year with that carrier. Under and over usage of minutes should be adjusted appropriately to maximize cost-savings.
5) LD/Other Charges/Credits
This column can include charges such as long distance calling, taxes and credits. This information will vary depending on the wireless carrier. For example, Verizon bills will include taxes on services and airtime, while Sprint does not. Long distance charges are generally not an issue since virtually all carriers include domestic long distance calling as standard on most calling plans.
6) Directory Assistance Charges
Directory assistance charges (sometimes called "related call charges") are listed in this column. Dialing 411 for directory assistance is one cell phone expense that can easily be eliminated. There are many free 411 services available now in the marketplace that retrieve information from the same databases used by the big carriers. For more information on using free 411 services, refer to this article: How to Get Wireless Directory Assistance Calls for Free
7) Equipment Charges
This column contains charges for handsets and other related equpment ordered for the previous month. In the corporate environment, wireless handsets come and go frequently. Oftentimes employees order phones on their own, only to expense them at the end of the month. The best way to control these types of charges is to insist that all equipment charges are handled by the corporate office. This is the only way to accurately track inventory of equipment as well. For more specific information, refer to this article and video: 6 Proven Strategies for Controlling Wireless Expenses
8) Direct Connect Services
Carriers (Nextel and Sprint) who offer direct-connect services to and from other subscribers will put those charges in this column. Direct-connect service is usually included in business plans so the use of this feature is the same as every other call. If charges occur in this column, make adjustments to your plan accordingly.
9) Text Messaging Charges
The amount of text messages made in the previous month and their total charges are found in this column. The popularity and wide spread use of text messaging by wireless subscribers has created a "cash cow" for the wireless industry. Text messaging is probably the most expensive activity you will engage in with your wireless phone. At 10-20 cents per message, these charges can really add up fast. There are plans available that allot a certain (even unlimited) amount of messages per month. If you engage in any amount of "texting", consider a plan that offers a small amount, then discipline yourself to stick with it.
10) Roaming Charges
Just a few years ago, roaming charges were feared by consumers. Making calls from outside your calling area can make your bills go through the roof in no time. These days roaming charges are not an issue as they have been in the past. Wireless networks are now much more robust. Unless you are subscribed to an economy plan, you should not experience excessive roaming charges when making calls from outside your calling area. If you travel often, be sure to check your wireless bill for any charges that might appear here and make a note of the location(s) from which they originated.
11) Data and 3rd Party Services Charges
As wireless technology evolves, so do the columns that contain billing charges. Since a majority of wireless phones today have internet capabilities, data transfer and internet usage charges are now a billing issue that requires diligent monitoring. The best advice here is to make certain the plan chosen will accommodate the internet usage that will be used. Data transfer is recorded in kilobytes and is rounded up the the nearest kilobyte for billing purposes. Data sent and received usually includes, but is not limited to, downloads, email, overhead and software update checks.
12) Taxes and Surcharges
A wireless bill would not be complete without excessive local, state and federal taxes and carrier surcharges. Keep in mind that some bills will separate these charges into specific columns. There is not much you can do to eliminate these annoying charges other than complain to your state and/or local government representatives about the escalating taxes placed on wireless bills. Here is a list of the top 10 states for wireless taxes.
Wireless usage is the fastest growing segment of the telecommunications industry. As cell phones become more feature rich, the probability of errors only increases. The time spent becoming familiar with usage patterns and billing will pay off in the long run.
TelCon Associates helps businesses gain more control and reduce telecom spending. For a free e-book entitled Telecom Tips and Strategies, visit http://www.telconassociates.com
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