Cheaper Rates Higher Bill?




By Sarah Linares, Vice President, TMC Communications

As a reseller, TMC competes daily against other carriers and resellers and I’m amazed when I see some of their invoices. Some carriers and resellers are presenting rates and local access loops that are very aggressive, but wait until you see that first customer invoice! I’ve seen invoices with an additional 15 percent in extra charges. These charges are not revealed to the agent up front when they’re presenting pricing. And as a result, the customer doesn’t even know about them until after they see their first invoice.

For instance, it’s a typical practice for local access loops to have no markup. But, did you know that some resellers and carriers actually add an extra charge masked as a regulatory charge that marks up loops an additional 5 percent? Agents, of course, get no piece of that and the customer is irate about it after they see their first bill.

Bill Leutzinger wrote a great blog on hidden charges last year, so I won’t rehash those details, but it’s important enough to emphasize that the quote presented by a carrier will most likely not detail extra charges. The agent has to ask: “What other charges will show up on my customer’s invoice?”

Here’s what we’re advising our agents:

  • Ensure you’re not selling a cheaper rate to only find out later that the carrier or reseller is dinging your customer with crazy fees after the sale. After all, you’re going to have to face that customer after the installation of their service and explain the 15 percent excess (that you’re not getting paid commission on) versus your quote.
  • Evaluate the carrier or reseller you’re working with and ensure you know all about their hidden fees. The surcharges are probably hidden on their Web site somewhere in really teeny tiny print under a section that talks about terms.
  • Know how to sell against a competitor’s cheaper rate. In most cases, that carrier or reseller is making up their margin with hidden charges. Ask your prospective customer if they’ve seen an example invoice or a list of ancillary fees.
  • Ask to see your customer’s current invoices and look for what extra fees they’re being charged today. Some charges look like regulatory fees, while others are miscellaneous fees in relation to toll free features, circuit overflow and local services.

We work with all the major carriers plus the regional ones, so we’ve seen every flavor of rate change and extra charges over the last 12 years. Because we have decade-long relationships with most carriers and we are significant players in this industry, we’re able to mitigate some of these rate changes and fees through negotiation, but we’re having to make customized, yet proportional responses to the changes. In other words, we’re not covering up rate changes with junk fees. Our agents are asking us some very smart yet tough questions:

  • “During this tough economy, why are carriers raising fees and rates?”
  • “Is SIP a good alternative to save my customer money?”
  • “What new products are the big carriers pushing now and developing for the future?”

In result, we have decided to respond to our agents by organizing a Telecom Town Hall with a panel consisting of carriers, agents, resellers and other industry experts to answer those tough questions. If you’ve got a question you want answered, submit it to and then attend the Telecom Town Hall live Webinar on April 29, at 11 a.m. PT.

Sarah Linares is vice president and director of product development and revenue assurance for TMC Communications. She drives the development of new products and pricing structures for the company’s more than 300 agent partners. A seasoned professional with more than 15 years of telecom experience, she also leads the team that is responsible for TMC’s customer bill analysis and 99 percent invoice accuracy. She also is a member of the 2008-09 PHONE+ Channel Partners Advisory Board..

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