By Kieren McCobb
Stepping over a
dollar to make a dime, most long distance agents are overlooking a profitable opportunity
in dedicated voice services. Their reasons for doing so largely are ignorance and fear.
Behind the veil of mystery surrounding dedicated voice service, however, agents will find
a worthwhile, business-building pursuit.
Simply stated, a dedicated circuit is one that connects two points, usually referred to
as "A" and "B." These circuits generally are used for two purposes:
the transmission of data between locations and the direct connection between your
customer’s telephone system and the long distance carrier’s point of presence (POP).
Dedicated data service primarily is used to connect computers or local area networks
(LANs) between the two locations. To do this, data circuits are installed offering fixed
rates of bandwidth that are always "on," meaning they don’t need to be dialed
up. These circuits are sometimes referred to as "nailed connections" because
they are always available for use. Speeds vary, but the most common are 56/64 kilobits per
second (kbps), 1.544 megabits per second (mbps) for a T1 and 44mbps for a T3. These data
services are transmitted by using a number of technologies; two of the most common are
digital connect service (DCS) and frame relay.
In contrast, dedicated voice service simply is the direct connection between your
customer’s private branch exchange (PBX) telephone system and the long distance carrier’s
POP. The circuit between A and B is called a local loop. This local loop is a T1
connection. Because this direct connection reduces originating/ completion costs that
carriers pay to a local exchange carrier (LEC), they can charge significantly less per
minute for traffic. The difference easily is 1.5 cents to 3 cents per minute.
A T1, which contains 24 channels at 64kbps each, is essentially a tie line between the
phone system and the POP. A voice conversation can take place on each channel and, if set
up properly, can be inbound (toll-free) traffic, outbound or some combination of both.
Imagine each T1 is a 24-lane highway and each conversation a vehicle. Up to 24
conversations may take place at a time. With two T1s, up to 48 conversations may take
place and so on.
The difference between a point-to-POP and a 1+ connection is the customer pays for the
T1 local loop between his or her phone system and the POP. This loop is mileage-sensitive
and its cost is usually a fixed price plus a per-mile fee. Local loop pricing varies by
LEC, but as an example, in some Bell Atlantic areas, point-to-POP loops are less than $200
per month. Many customers (and long distance agents) are surprised that the cost for
dedicated service is so low.
Figuring out which customers are candidates for dedicated access is pure math. Let’s
take a customer that is billing $3,000 per month at 10 cents per minute. They are,
therefore, billing 30,000 minutes per month. If dedicated access pricing is only 7.5 cents
a minute and a point-to-POP loop (assuming five miles from POP) is about $238 per month,
then your customer’s bill from you will drop by $750 per month and his or her local bill
will go up $238. The customer will net a $512 savings per month, or $6,144 a year.
So to whom do you propose dedicated access? Those customers whose per-minute price
(multiplied by the total minutes of use) drops enough to equal or exceed the T1 cost.
Offering dedicated services benefits both the agent and the customer. The end-user
customer benefits from:
The extra benefits to the agent are equally noteworthy. For example, you can expect to
Selling dedicated services is fairly simple, but it’s not easy. Few rewarding things
are. That said, the "complexities" that prevent most agents from taking
advantage of this opportunity largely are exaggerated. Yes, there is some training
required and a learning curve, just as in anything new. But for someone determined to
offer a complete package to his or her clients, the knowledge will come quickly. And like
any other win-win situation, it’s worth it.
Kieren McCobb is president of TeleConfusion Removal Inc., which specializes in
designing end-to-end networks. He can be reached by e-mail at firstname.lastname@example.org.
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