| Hemendra Bohra |
Posted
on 31-May-03 08:25 PM
With the rate increase on the Target/MCI cards many of you might be wondering what's a good rate to call Nepal and how to select a good card. Here are some useful info.
There are four main factors which determine the retail rate:
1. Price paid by the calling card company here to Nepal Telecommunication Corporation in Nepal for terminating calls. This is more than 22 cents per minute. NTC has termination agreement with only a handful of big telecoms so this rate will be higher for other companies which have to send their traffic via these big telecoms.
2. Other costs toll free costs (yes this costs money), switching and other admin costs.
3. Discount given to resellers. Cards have to be sold to retailers at a discount so that they can then sell them to end users like you.
4. Profit Margin. The card company has to make some profit.
Now lets do some calculation, starting with some assumptions:
1. Price paid per minute by communications company here to NTC in Nepal 22 cents (it is definitely more than this though)
2. Other costs 3 cents per minute
3. Discount given to retailers at least 28%
A $10 card is sold by the card company to a retailer at $7.2
A card company can give $7.2/ ($0.22 + $0.03) = 28.8 minutes to Nepal on a $10 card (without making ANY profit)
So the advertised retail rate for Nepal has to be at least $10/28.8 = 35 cents per minute
So if any one of these is true:
-- advertised rate is less than 35 cents per minute
-- It says more than 28 minutes on a $10 card
Then:
-- either in reality the card gives less than the advertised number of mins and there are other hidden fees
-- or the card does give the advertised number of minutes, and this rate is definitely not sustainable. So enjoy the card while you can. Dont put too much money on the card.
So, consider this while buying cards for Nepal:
-- If a $10 card claims to give more than 28 mins to Nepal, then get more details on maintenance fees, billing increment, and tax. Call the customer service before buying the card. There are numerous ways available to calling card companies to fool the customers and they definitely make full use of them.
*** The above scenario is true given the current circumstances. If the card companies here get a better termination rate to Nepal then the lower rates are definitely feasible, but certainly not at this moment.
...more on Fees in the next post..
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| Hemendra Bohra |
Posted
on 31-May-03 08:33 PM
There are many ways available to calling card companies to fool the customers. Different kind of fees and taxes are used to give customers a false sense of low rates. Of course low rates always sound attractive, but beware. These are some tricks used:
1. Minute announcement.
The number of mins announced, in almost all cases, do not take into account fees connection, maintenance or any other. Also 1 minute in the calling card system can be programmed to less than 60 seconds. If it is programmed to lets say 40 secs, a card which says 30 mins will be used up in 20 mins!
2. Connection Fee.
Usually between 50c and $2. This fee is deducted per call, during the start of the call. This fee has now fallen out of favor. Most have and advertise NO Connection fee but have other hidden fees to compensate.
3. Maintenance fee.
Usually applied in interval of 7 or 14 days. Mostly between 50c and $1.50. However, the first one is applied right after the first call.
4. Billing Increment/Rounding.
Usually 3 minute rounding cards are available these days. If it is a 3 min rounding card, and if you talk for 45 seconds 3 mins will be deducted. If you talk for 10 mins 12 mins will be deducted.
Also when the minutes are announced the billing increment is not taken into account, but actual length of the call does take that into account. So for example if it is a $10 card, and the rate is 20 cents, the system will say you have 50 mins , but it will only give you 48 mins.
Also, if it is a 3 minute rounding card and there is balance on your card which allows less than 3 mins, you wont be able to place that call. So if the rate is 30 cents on a 3 min rounding card and you have a balance of 80 cents you wont be able to call that destination.
5. Tax.
Upto 25%. The tax is not taken into account while announcing the number of minutes. So if the advertised rate is 20 cents and if it is a $10 card, the announced number of minutes will be $10/$0.20 = 50 minutes. But the actual charged rate is $0.20 * 1.25 = $0.25. So the card will give you 40 mins.
6. Hang up fee.
Once you hangup if the balance on the card is less than the per minute rate for the destination you just called, the balance will be reduced to zero. So, for example if the rate for your destination is 35 cents and there is 30 cents left on the card the balance will be reduced to zero after you hangup.
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