FOOL'S EYE VIEW
Cut The Cost Of Calling!

By Alison Hunt (TMFAlly)
February 2, 2006

After gas and electricity bills, a good chunk of your cash probably goes on phone bills. After all, as well as home telephones most of us own a mobile phone too -- and some households can be paying bills for three or four each month! It all adds up to a hefty sum of money, so any savings that can be made are bound to make a noticeable difference to your budget.

However, many of us are unaware just how calls from our home phones are charged. Carrying out some checks revealed that NTL customers, for example, on the standard tariff are paying a whopping 6 pence connection charge, with all calls (even local) costing 3 pence/minute during the day (dropping to 2 pence/min in the evenings and a penny a minute at the weekend). BT customers on its basic package are charged 3 pence for calls up to an hour; subject to a 5 pence minimum call charge.

There are a lot of companies on the market offering cheaper deals, but unfortunately they don't tend to have to facility to provide the actual phone line itself. Therefore, depending on your usage, the best thing to do is usually to sign up to the most suitable package with your provider (usually one that includes a good deal on evening and weekend calls) whilst also finding a separate company to make daytime/mobile/international calls with. Alternatively, choose the cheapest deal available with your provider and choose alternative companies to actually make calls with. You'll still have to pay your main provider's line rental, but you can benefit from cheaper calls through the second (and third) company. Calls are usually billed separately, as you have to dial a pre-fixed number in order to benefit from the second provider's rates.

Cheap Daytime Calls

Regular readers will have heard Call1899 mentioned by the Fool many times and indeed, many Fools themselves have signed up for it. Essentially Call1899 offers BT customers the chance to make free or cheap calls, subject to a 3 pence connection charge.

For example, calls to UK landlines are free; UK mobiles can be called at the weekend for just 3 pence/min and during the week for 10 pence/min. And it offers some good rates for international calls to, with calls to the USA landlines costing just 1 pence/minute. All you need to do to use the service is to firstly register with a credit/debit card, then dial 1899 before the number you wish to call (most phones will allow you to set this up as a preset). Your calls will be billed directly to your card. What's more, Call1899 now has a deal for non-BT users such as NTL/Telewest. The deal isn't as good for calls to UK landlines -- 0.5pence/min, but users can still benefit from their mobile rates.

It's also worth noting that Call1899's sister company Call18185 also offers free calls to UK landlines, with calls to UK mobiles charged at just 2 pence/minute. However, calls are subject to a slightly higher 4 pence connection fee -- which will make longer calls cheaper. Call18866 is another company that operates a similar service.

Cheap Evening calls

Many people choose to sign up to a cheap tariff with their main phone line provider (BT etc) to save money when making calls at the evening and weekend. However, you can save even more. Primus offers BT users free calls of up to 90 minutes duration to UK landlines in the evenings and weekends on its Saver 2 package, with peak calls being charged at 2 pence/min. High users may prefer the Saver 3 package, where, for a monthly fee of £8.49 you can call UK landlines at any time of day (though Call1899 is bound to be cheaper). Obviously it makes sense to hang up and re-dial if your call will be more than 90 minutes, and maximise savings by ensuring you're not signed up to a package with your phone line provider that already gives free minutes - you'll be paying twice.

Primus also differs from Call1899, as it doesn't require a pre-set code to be dialled before calling (it uses a service called Carrier Pre-Selection). This means it actually becomes your default provider on your BT line, through re-programming at the BT exchange. However, you must still pay BT for your line rental.

Post Office

Interestingly, the Post Office has now become a telephone line provider, offering its HomePhone service. With line rental from just £9.95 per month and no minimum contract it could be a cheaper and easier option. Plus, if you switch before the end of March you'll be entitled to £50 off your bill.

VoIP

Of course, broadband users are well aware that if you sign up to one of the many companies using Voice over Internet Protocol (VoIP), all calls made can cost absolutely nothing. Check out companies such as Skype and Google -- by simply signing up, getting your friends to sign up and attaching a microphone and headset to your PC, you can chat away for free. What's more, you can dial landlines from your computer quite cheaply too.

0870 numbers

Incidentally, it's worth noting that even with Call1899 calls to 0870 numbers are 7 pence/min. Beat them at their own game by finding alternative geographical numbers at saynoto0870, and by following this advice you can find out how to bypass those annoying call centres.

Mobile Phones

Of course, once you've sorted out the combination of providers to use for your home phone, you're bound to start thinking how you can save money on that mobile phone bill, too.

What are your requirements?

However, deciding upon the cheapest option with mobile phones is by no means an easy task. With the hundreds of different tariffs available, the choice is vast. To tackle this minefield it's important to initially work out your basic needs. Take a look at your bills from the last few months and make a note of when you are using your phone -- is it in the daytime or more evenings/weekends? Are your calls to your own network or friends with alternative providers? How many texts do you send each month? How often (and at what time of day) do you retrieve voicemails?

PAYG or Contract?

If you currently have a Pay AS You Go (PAYG) phone (i.e. you charge up your phone with credit) how much are you spending each month? How many minutes usage does this equate to? Medium to high users usually find that they can save by switching to a contract phone. Alternatively, if you barely use your phone, is it worth paying to be on a contract when a PAYG phone would do the job? And finally, are you happy with your phone model, or does that fact it resembles a brick upset you?

If you're constantly calling friends who are all on a certain network, it can make good sense to switch over too -- not only will you save money, you can choose a shiny new phone, too. And providers usually allow numbers to be ported so you won't even have to give out new contact details. And keen texters who switch to a tariff offering text bundles can save a fortune too. Alternatively, look for tariffs with cross network minutes -- although this can be quite expensive.

Once you've noted down the number of daytime, evening and weekend minutes, plus texts you use each month (and to which network), why not plug your details into Switch With Which? or the One Compare websites? They can quickly search all of the available tariffs and provide a list of the ones most tailored to your usage.

As always, however, if you're not happy with the tariff you're on it is well worth phoning your provider to ask about the best deal it can offer you. I recently did this and was rewarded with a better tariff and a free, shiny new phone. Some providers (such as Orange) will also match the tariffs offered by their competitors.

And T-mobile has just launched a brand new tariff. Instead of being assigned minutes and texts each month, customers choosing its FlexT tariff will be given a monetary value, allowing them to choose the combination of minutes and texts that they'd prefer. Customers will be texted weekly with their usage and be given the opportunity to increase or decrease usage every six months.

So there you have it, a number of ways to help you hack back those mobile and home telephone bills -- good luck!