Telecommunications tariff
A telecommunications tariff is an open contract between a telecommunications service provider and the public, filed with a regulating body such as state and municipal
Reasons for tariffs
At a minimum, tariffs imposed must cover the cost of providing the service to the consumer. The consumer may be the final user or an intermediary such as a
Components of tariffs
Tariffing systems vary from country to country and company to company, but in general they are based on several simple principles. Tariffs are generally made up of two components:
- Standing charges: these are fixed charges that are used to pay for the cost of the connection to the nearest exchange and the equipment to monitor that customer's phone line or service connection. They are usually paid on a monthly basis, and called rental.
- Call charges: these charges are variable and are used to pay for the cost of the equipment to route a call from the caller's exchange to the recipient's exchange. These call charges can be calculated on a fixed per call basis, a variable basis depending on the time or distance of the call, or a combination of the two. Call charges can even vary at different times of the day. For many local calls the charge is zero; see flat rate.
These components form a basic tariff system but, as telecommunication advances, tariff structures become increasingly more complex.[3] Usually there is the option of calling collect (in the UK known as reversing charges), where responsibility for charges normally paid by the caller is accepted by the recipient. Tariffs[4] also depend on the bandwidth provided. For example, dial-up modem connections are charged at normal telephone costs, but connections such as DSL are usually charged using a completely different accounting system due to their always on nature.
Special tariffs
Increasingly, in some countries, the call charges are fixed at a monthly rate and included as a supplement to the standing charges, known as inclusive calls.
Emergency calls can invariably be made without charge.
Most countries have a number sequence that enable the caller to make calls without charge, sometimes known as free calls or
Tariffs substantially in excess of the normal rate, known as premium rate, are used for information services, competition entries and pornography calls.
These telecommunications tariffs originated with the advent of public phone service. In these times, the services provided were less complex, and customers were able to simply read the tariffs to understand how much they would be charged for each type of call.[3] Additionally, only a few telecommunication industries participated in the market, facilitating decision-making. As the market became increasingly competitive, the need for regulation decreased. In 2001, the U.S. Federal Communications Commission (FCC) declared the telecommunications market was fully competitive in the United States, and eliminated the need to file tariffs with federal regulatory agencies. However, to continue operating, many state and local governments still require telecommunications tariffs.[5]
Impact of tariffs on traffic
Call minutes are highly elastic against price, this means that the demand for call minutes varies greatly according to price. A slight decrease in price leads to a great increase in call minutes. The higher the price, the more this effect is noticeable, for both business and residential customers on international or local calls. This means that it is often the case that more revenue is achievable at lower prices, that is, E < -1.[6]
Internet traffic research show that the traffic intensity is directly affected by the tariffs charged in connecting customers to their
References
- ^ "Tariffs". FCC. Retrieved 14 September 2013.
- ^ "Telecommunications Tariffs: Frequently Asked Questions". MyFlorida. Florida Public Service Commission. Retrieved 14 September 2013.
- ^ a b "What is a Telecom Tariff?". wiseGeek. Retrieved 14 September 2013.
- ^ "What is a Telecom Tariff India?". telecomtariff. Retrieved 17 June 2020.
- ^ "Toll Free Calls and Telecommunications Tariffs". Phone Services. 11 September 2013. Retrieved 7 February 2014.
- ^ a b Vannucci, D.E., Kennedy, I.G., Barker, M., "Impact of Tariff on dial-up internet traffic: Modelling the subscriber response as a dynamic system", ITC18 Workshop for Developing Countries, Berlin, 2003.
- Farr, R.E., Telecommunications Traffic, Tariffs and Costs - An Introduction For Managers, Peter Peregrinus Ltd, 1988.
- Kennedy I.G., "Why is Network Planning Important?", Lecture Notes, ELEN5007 - Teletraffic Engineering, School of Electrical and Information Engineering, University of the Witwatersrand, 2005.
Further reading
- ISBN 92-64-13497-2