xrg wrote:
Do you suggest that the "disconnect charge" will only apply if the customer hangs up *before* the timeout?
Not exactly, if let us say we charged 75 cents / minute and you have a $2 card, then let us say no connect fee and $1 disconnect fee. Obviously - you can only talk for 2 minutes (at the fee of 75/ minute with minute increments), so they have 50 cent leftover that you can do a disconnect fee of 50 cent, or 75 cents, to take the card to zero or less.
The way most of the "big" guys do it is with "Breakage" - that meaning money left on a card that doesn't get used as phone minutes.
Let me make up an example that all will understand as one I can envision someone doing ... Let's call this card "India Express" - we'll sell it as a $3 card, minute incremental billing, .25 connect fee, calls to India for only 4.9 cent / minute, a disconnect fee of .50, and a monthly fee of .25.
Now - for the customer that means if he burns the card in one use, he gets 2.75 / 4 cent = 56 minutes (pretty impressive) they end up with 56*.049= 2.744+ .25 = 2.794, and the disconnect fee will take the card to below zero. And let us say our cost is 6 cent / minute, then that puts us at 3.36 or a loss of .36
Now - if this same user talks for say 10 minutes, then we get to charge him 4.9 cent * 10 = .49 + .25 connect fee + .50 disconnect fee. Now he has a balance left of $3 - .49 - .25 - .50 = $1.76, and on his next use of the card he can talk for $1.76 - .25 = 1.51 / .049 = 30 minutes. If he talks that full amount, again he'll burn the card, and now only got 40 minutes, or a cost to us of $2.40 and a profit of .60 ... the more he uses, the more we make. One use, we lose money, more than we make money.
That's how the big guys do it. And you say why charge the .25 connect fee, and then the .50 disconnect separate? Cause it lets him talk more on the front side, and plus when the use calls in, it states how much money he has left with that extra .25 connect fee still in his balance and its all about perception.
Hope this is more clear ... I hope I never have to use this methods, but I'm afraid we all may need to some time or other. Let me know if more clarification is required.
KK
Now if this same person talks for 10 minutes, and ha