In 1993, when I first started working for the phone company, they had just relaxed the tariff that required an individual to pay for a business line if they worked out of their home. Before that, the phone company had employees call residential phone numbers to check if they were answered with a business greeting. If they did, they would demand that the customer convert their line to business (for about twice the cost) or have their line disconnected.
You could operate that way if you had little or no competition.
At the time, a business line was required to get a listing in the phone book and directory information. There was no Google, so the phone book and directory information was the only way a perspective customer could find you.
Back then, phone lines were king. Business lines went for $30+ per month, and in Arizona, where I worked, it was $46.50 for installation. The installation charge was only for activation; jack installation was a separate charge. The first jack was $90 and $45 for each additional. Business voicemail was $12.95 per month and that charge didn’t include the forwarding features necessary to get calls from your phone line to your voicemail inbox.
10 business lines could easily cost a business $500 a month. If you needed 10 jacks installed, your total installation charge would be $960 ($465 for the phone lines and $495 for the phone jacks). That’s just phone lines, no phone features, and at this time there was virtually no internet access.
Phone features started at $3.50 per line, per month. Caller ID was $5.95 a month, per line. A single voicemail box would run you about $20 per line.
Long distance could cost between 30 and 90 cents per minute. In 1998, I went to work for a long distance company called Unidial that offered a smoking deal – 8.9 cents per minute. Even so, when I went to work for Cox Cable in 2001, I still stumbled across AT&T customers who were paying 90 cents per minute for long distance, and that was in full minute increments.
So what happened? It wasn’t that other companies started offering discounted phone lines. It was the development of the integrated T1 that brought down the cost of business phone service.
Integrated T1s could be delivered by any of the phone company’s competitors. Wholesale deals were made for local loops, so competitors could service any business connected to the phone company’s network. The cost of routers dropped, allowing carriers to blend in equipment costs and still remain competitive. Voice over IP spurred the development of dynamic bandwidth and brought down the cost of long distance.
Today, it’s possible for a business to secure an integrated T1 offering those same ten phone lines, internet access and a block of long distance minutes for less than $300 a month. Phone features are typically included for no extra charge. Most integrated T1 providers will waive installation with a two or three year agreement.
For less than what it cost you to install ten phone lines in 1994, a business today could cover the entire cost of their phone, internet and long distance services for three months.
Integrated services come in all denominations – T1, N x T1, Ethernet over Copper (EoC), Converged services – all different bandwidths – and offer PRI, SIP or analog handoffs. If you would like help determining the correct integrated service for your organization, contact CarrierBid today.