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Bundling can relieve your telecom burdens
Mie-Yun Lee, Editorial Director, BuyerZone.com
June 5, 2001

There's the bill from the local phone service. The bill from the long-distance service. The bill from your ISP. Your calling card company. Your cellular service company.

Ever notice that half the bills you pay relate to telecom? There is a way, however, to wipe out this monthly barrage.

Telecom companies have started to bundle multiple services for a lower price and with a single bill. Over 43 percent of small businesses have bought into bundling so far, according to a 2000 report by The Strategis Group, a consulting firm based in Washington, D.C.

In theory, bundling works well because of the convenience. You don't have to cobble together all your different telecom needs from different providers or keep track of separate bills. Bundles offered in major metro areas can offer significant discounts - from 10 percent to even 50 percent - over buying services a la carte. Even if prices aren't discounted, however, the attraction of a single point of contact might be enough to win you over.

The most commonly bundled services include local telephone service, long-distance telephone service, and dial-up Internet access, with monthly costs typically starting at $25 per phone line and 500 long-distance minutes. More comprehensive packages may include high-speed Internet access like T1 or DSL lines, wireless telephone service, calling cards, toll-free numbers, conference calling, or Web site hosting.

Some bundles can also let you use existing telecommunication lines more efficiently. If you have more than 12 phone lines, for example, leasing a T-1 line can be a cost-effective way to scale up to 24 digital lines, which you can use for your phones, toll-free numbers, and Internet connection, for instance.

So how do you choose a telecom package?

The biggest thing to keep in mind is no single provider can offer you the best price, service, and support for every item included in your bundle. You will most likely have to sacrifice something in the name of simplicity.

Start by evaluating which telecom services are critical for your business - low long-distance rates or a good cellular plan, for example. Most important, be familiar with your monthly usage patterns, such as how many long-distance minutes you typically use and which geographic areas you call the most. With Internet access, know what kinds of Web content you're likely to access and the kinds of connection speeds that requires.

Now investigate providers' terms for your prioritized services, and know beforehand the shortcomings you can live with. If the provider bundles a higher-priced calling card with a well-priced nationwide cellular plan, can you stomach paying a little more for calling cards you'll hardly use?

And ask whether your provider has a single customer service number. After all, calling different divisions of the same telecom company for a billing dispute or a support question could be as frustrating as calling multiple service providers.

Bundle up if you want, but don't tie yourself up too tightly just yet. As deregulation grows and technology develops, your telecom bundling options will continue to improve while falling in price.

Quick tips

Keep it short. Don't lock yourself into contract for more than a year. You want to keep the option of switching providers if a more competitive deal comes up or if your usage patterns change.

Hardware compatibility. Before signing on for a service that combines your voice and data traffic, make sure your phone system and computer networks are compatible with it.

Just in case. Don't put all your telecom eggs in one basket. Get a backup phone line with another company in event of failure.

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