No telecom manager would ever leave $500,000 on the table, would they? One of our clients did, but the finger of guilt goes right to the carrier. Let's see what happened.

This company had shifted to electronic billing on a claim from their vendor that they would have "better information that was easier to use." For 3 years they received their CDs, opened and reviewed the reports, and took the kinds of bill validation efforts you would expect from a seasoned telecom team.

But something went wrong. It seems that the carrier didn't put the proper data points into the CD billing information that the customer received, which TelAssess discovered when we extracted the 245,000 individual call records from a sample month's CD and compared calls with contract rates in our proprietary analysis engine.

In addition to rounding errors that violated the contract terms, we found 8,000 calls for that month that didn't match up with contract categories. We asked the carrier to tell us what was unique about these calls. It turns out that 375 of them were SDS (data), both Interstate and to Japan. Amazingly, the SDS calls to Japan were being billed an average of $1.77 per minute, with some billed at over $3.00!

The cost of these calls was between $12,000 and $20,000 each month. But the calls were all dumped into the voice category, and the customer had no way to use the billing CD to identify them.

The simplistic reporting capability of the CD hadn't identified this call type as even existing, and to make matters worse, the reports indicated that calls were being "accurately" billed. But the carrier wasn't even aware of the deficiency in the billing CD. In fact, they initially stated (erroneously) that the CD did show SDS as a separate category. Wrong!

And certainly the customer wasn't aware, or they would have immediately gone after better rates, something on a par with the benchmarked discounts they had successfully negotiated for over 40 other individual call-type categories.

Obviously these calls have to carry some cost, but not a ridiculous $1.77 per minute. Using our knowledge of benchmarked contracts, we determined that a reasonable price would have been about $.25 at the time this contract was signed. Calculating usage over the 3 years, we calculated that this client paid $516,000 more than they needed to.

Steps are being taken to resolve this matter. A "Client Satisfaction" settlement is pending to compensate for the weakness in the management tool provided by the carrier. Also, the contract is being amended, the billing CD will hopefully be properly programmed, and the client charges going forward will be substantially reduced.

What about your contracts and billing CDs? Are you sure that all of your calls conform to contracted calling category pricing? Are you arriving at that conclusion based on your telcos billing CD reports or based on in-depth independent analysis?

TelAssess offers a stand-alone "Contract vs. Billing Analysis" of your long distance that can be performed on a fee or contingent basis. For more information on this service that just might resolve your $500,000 horror story, please contact us today.

To read more about contract performance services from TelAssess, click here.
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