Buyer Beware:  Exposing Hidden Fees With Business Telecommunications Service

Buyer beware:  Not all telecommunications pricing is created equally.  Let’s assume you are shopping for business communications services from various providers; traditional telecommunications companies, VoIP and Unified Communications as a Service (UCaaS) providers. Your company probably has a budget and even if there is not a specific budget, pricing is obviously one big factor to consider. It may not be the only factor, but it definitely plays a role in the decision-making process.

You visit websites to compare pricing options between various providers. It seems pretty obvious right? Again, price might not be the only factor, but it is definitely a factor especially when you are looking at similar services that more or less do that same thing. The problem is that comparing website listed pricing is not an accurate apples-to-apples comparison. Why? The reason is because almost all providers charge additional fees and surcharges to their listed price. Here is how most providers position the pricing for their service:

                                                                $21.99 per month*
                                                                                                   *Plus taxes, surcharges and fees

These fees typically run between 20-40%, but can be even higher which completely changes the bottom line price. For example, a service that is listed at $21.99 per month with various fees that total 30% is really $28.59 per month; an increase of $6.60 over the listed price. Most buyers and consumers alike know that the price of almost any good or service will likely have some sort of additional charge, but fees and other surcharges of +20-40% amount to a material difference when trying to compare apples-to-apples.  Although $6.60 more per month per user might not seem like much multiple that times 12 months and times all of the users within your company and it really starts to add up.  Paying just $6.60 more per month per user due to hidden fees can equate to paying several thousand dollars more per year in total.

Why does this happen? Business is competitive and many providers feel as though they can gain an advantage by listing a low price. Telecom providers will price their services without  fees, surcharges and other charges to appear to be the least expensive option. This enables them to be perceived as the low price leader relative to telecom providers.  The below chart helps pull back the curtain and expose some of the hidden fees you might see with your telecommunications service:

Hidden fees & Surcharges: 

 

National VoIP

Provider #1

National VoIP

Provider #2

 Level365

 

Listed Price (monthly)  $19.99 $21.99 $28.00
Fees & Surcharges (monthly)  $8.56 $9.79 $0
Actual Price per Month after Fees & Surcharges $28.55 $31.78 $28.00
Services Included  Unlimited Domestic Calling, Mobile App, Desk App   Unlimited Domestic Calling & Mobile App  Unlimited Domestic Calling, Mobile App, Desk App 
Long-Term Contract Required No Yes, if phones are rented there is a 12-month term. No

Listed Fees & Surcharges

Federal Program Fee (9.50%)

State - E911 ($1.00 per number)

State - Sales Tax (7.00%)

State - Utility Users Tax (1.40%)

Additional Phone fee

Federal Universal Service Fund 

State and local taxes and fees

E911 Service Fee (7.00%)

Compliance and Administrative Cost Recovery Fee 

None. 

 

Per monthly pricing

includes everything.

 

 

 

At Level365, we like simple, straight-forward, predictable pricing so the price we list is the price you will see on your monthly statement. Our service includes features for seamless integration among devices; Desk Phones, Computers and Mobile devices to improve your team's productivity. We make changing easy by handling the transition of your service, porting your phone numbers, in addition to, providing ongoing upgrades and maintenance.

Click here to see what features are included with our service. 

About Level365:

Level365 offers a complete Unified Communications as a Service (UCaaS) solution with enterprise voice that is customizable and scalable for your business. Our service seamlessly integrates communication among desk phones, computers and mobile devices to support remote teams and provide flexibility for on campus staff. The UC platform extends beyond voice communications with Unified Messaging, Analytics, Presence, Chat/SMS, Cloud Faxing, Business System Integration and more.