What's In A Minute?

A few weeks ago, Dog and Bone demonstrated the differences that increasing the billing increments can make. The article can be found here. The upshot was that increasing the billing increment by 30 seconds increases call charges by about 12%, while increasing it to 'per-minute' results in an increase of around 24-5%. There is some variation according to call types, but these are the basic figures. Given that many people generally aren't aware of their billing increment, this can be said to constitute something of a 'hidden' charge.

That being said, when it comes to tinkering with your call charges there are many knobs for the carriers to adjust. The billing increment is only one. Flagfalls - sometimes called a 'call connection fee' - are another one, one that most users are more or less aware of. A fun one that users may not be aware of is the 'minimum call charge'. This occurs when the carrier defines a minimum amount that will be charged for each call, regardless of the billing increment. 

For example, a 1 minute minimum clause - the most common type - means that each call will be charged as though it lasted at least a minute, even if it didn't. Thus a 20 second call will be charged for a full minute. Meanwhile, a call that lasts, say, 80 seconds will be charged for 80 seconds. Consequently, this type of charge will always penalise calling patterns in which calls predominantly last less than a minute. This is typically the case for Fixed to Mobile (F2M) calls, where our experience shows that users tend to keep calls short, perhaps as a legacy from when call rates to mobiles were truly stratospheric. STD calls, on the other hand, tend to last longer, and thus tend to be less penalised by minimum charges. Phone carriers are of course aware of this, and certainly did not stumble upon the concept of the minimum charge by accident.

So what difference does adding a 1 minute minimum make to a standard fixed line call spend, with 3 different call rates selected (x axis)?


F2M (Fixed to Mobiles)

Dog and Bone's analysis demonstrates that adding a 1 minute minimum increases STD call spend by about 13.3%, and F2M call spend by about 19.3%. These differences remain constant regardless of call rate. This was run over a sample size of about 33,500 call records total (approx. 10,500 STD and 23,000 F2M). 

Interestingly, the average call length for both call types was about 1.8 minutes, yet applying the same 1 minute minimum produced noticeably different results. What this tells us is that regardless of the average call length, the proportion of F2M calls lasting under a minute was higher than in the case of STD. Subtleties such as this demonstrate why analysis based around things as simple as average call length are inherently flawed when unusual billing rates are in play.