GHI Telecom Services

National Paper Manufacturer

At the request of the Founder and President of this small paper manufacturer, GHI reviewed this company's current voice network auditing both long distance and local telephone contracts, and conducted a longitudinal study comprising several consecutive months of usage.

Analysis

Their current telephony contract stipulations imbedded a five tier rate per minute and retroactive volume discount pricing methodology. If this firm used $50.00 per month in long distance usage their rate was $0.15/minute, however if they used $500.00 per month than the rate remained $0.15 with a 10% discount reducing their net effective rate to $0.135.

In addition, their rates included a second interstate non-region tiered pricing which increased their rate per minute to $0.17, for all calls that fell within that specified region.

Furthermore, if they breached their contract prior to the initial term agreement, they did not just owe the remaining months times $50.00, their monthly minimum, but also the remaining months times their average monthly usage to date. This was intolerable and a high level of risk for this small $500 per month long distance customer.

Finally, and unfortunate for them, 50% of their demographic calling patterns fell into that $0.17 third tier rate structure. Thus, their effective rate was very high for a majority of their calls.

The punitive contract terms provided an usually high base rate, uncompromising termination clauses and a multi-tiered pricing structure that was confusing, not competitive, and penalized the very destinations they called.

Recommendations

GHI Telecom Services recommended they convert from their current Reseller to a Tier One Facilities Based Carrier. We reduced their term from 3 to 1 year with a limited termination penalty and one second increment billing. There low 5 cpm rate dramatically decreased their monthly usage by 70% with an annual savings in excess of $4,000.00. International rates fell even more.

Four years later this customer remains a satisfied GHI client who continues to expand services into broadband and competitive local telephone products provisioned through GHI.