Advertised vs. Actual Rates

Advertised per minute rates and actual per minute rates are generally not equal. Normally, the actual rate you pay will be higher than the per minute rate advertised by your vendor.

Your advertised per minute rate is the stated rate you will be charged per minute of billed time. This is typically the rate most prominently used to promote a particular calling card - like, for example, a card to India advertised at 5.9¢ per minute.

Billed time is not widely discussed, but it is the actual amount of time you are billed for a given call. Billed time in generally higher than your actual talk time. Roughly speaking, it is calculated by dividing your actual talk time by your billing increment and rounding up.

More specifically, the billed time calculation is:

roundup [talk time / billing increment] * billing increment

So, for instance, if you have a card with a 3-minute increment and you make a call that lasts for 10 minutes. Your billed time for that call is 12 minutes.

Your actual per minute rate is the computed per minute rate you actually end up paying.

Actual per minute rate is calculated by applying your billing increment (as above) and then adding on all other applicable rates and fees - e.g., connection fees, maintenance fees, etc. on a pro rata basis to each call.

Making all the necessary calculations is actually reasonably difficult for you to do yourself, especially for cards with many fees. It requires a reasonably complex calling card pricing model that factors in all the many rates and fees. We have one in house here, but it isn't something that most people have at their fingertips.

Here are two example that show the typical differences between advertised and actual per minute rates. These example use typical calling card pricing and projected usage by a calling card user.

Advertised vs. Actual Per Minute Pricing

	Example #1	Example #2
Calling Usage Profile
Calls / week	5	10
Avg. talk time / call	9:18	15:45
Calls per connection	1	2
Percent of calls from payphone	0%	25%
No. of weeks using card	1.5	3.0
Calling Card Rates & Fees
ADVERTISED per minute rate	6.0¢	4.9¢
Billing increment	1 minute	3 minute
Carrier service fee	10%	15%
Connection fee	49¢	49¢
Payphone fee	99¢	79¢
One-time maintenance fee	49¢	--
Weekly maintenance fee	99¢	99¢
Advertised vs. Actual Per Minute Rates
Total billed cost	$10.11	$45.49
Total talk minutes	69.8	472.2
Total billed minutes	75.0	540.0
ACTUAL per minute rate	14.5¢	9.6¢
Increase over advertised rate	142%	97%

As you can see, in both cases, actual rates are considerably higher than advertised rates - 142% and 97%, respectively. These results are fairly typical, but much higher variances can be readily found.

Note that these results aren't necessarily a bad thing: you may still be getting very good value even after all fees are loaded. But it's useful to understand the difference, so you can set your expectations accordingly.

For more information, visit how to buy a calling card.

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Advertised per minute rates and actual per minute rates are generally not equal. Normally, the actual rate you pay will be higher than the per minute rate advertised by your vendor.

Your advertised per minute rate is the stated rate you will be charged per minute of billed time. This is typically the rate most prominently used to promote a particular calling card - like, for example, a card to India advertised at 5.9¢ per minute.

Billed time is not widely discussed, but it is the actual amount of time you are billed for a given call. Billed time in generally higher than your actual talk time. Roughly speaking, it is calculated by dividing your actual talk time by your billing increment and rounding up.

More specifically, the billed time calculation is:

So, for instance, if you have a card with a 3-minute increment and you make a call that lasts for 10 minutes. Your billed time for that call is 12 minutes.

Your actual per minute rate is the computed per minute rate you actually end up paying.

Actual per minute rate is calculated by applying your billing increment (as above) and then adding on all other applicable rates and fees - e.g., connection fees, maintenance fees, etc. on a pro rata basis to each call.

Making all the necessary calculations is actually reasonably difficult for you to do yourself, especially for cards with many fees. It requires a reasonably complex calling card pricing model that factors in all the many rates and fees. We have one in house here, but it isn't something that most people have at their fingertips.

Here are two example that show the typical differences between advertised and actual per minute rates. These example use typical calling card pricing and projected usage by a calling card user.

Advertised vs. Actual Per Minute Pricing

As you can see, in both cases, actual rates are considerably higher than advertised rates - 142% and 97%, respectively. These results are fairly typical, but much higher variances can be readily found.

Note that these results aren't necessarily a bad thing: you may still be getting very good value even after all fees are loaded. But it's useful to understand the difference, so you can set your expectations accordingly.

For more information, visit how to buy a calling card.