Tuesday, September 8, 2009

The Enigmatic Telephone Bill (4) - What is a Step discount?

In my series of posts on the Enigmatic Telephone Bill I am talking about the complexity of price plans and services, explaining various discounts that are used by telephone companies and showing how easy it is for the telephone companies to miscalculate your bill.
In a previous post, I talked about a Tier discount rate plan.
This post is about Step Discount. This type of discount is an additional type of Volume Discount, which is based on the volume of your usage.

Step Discount divides your usage into steps of volume, and gives you different rate for each step. Usually the first step has the highest rate, and you pay less as your usage grows.

Let me give you an example of text messages step rate plan:
The first 10 messages are for $0.5 a message
Messages 11 to 30 are $0.4 each
Messages 31 to 100 are $0.3 each
Messages 100 and up are $0.2 each
This rate plan is fairly simple.
If you sent 25 messages, you expect your messages charge to be $11.
10 X 0.5 = 5
15 X 0.4 = 6
In some cases the bill shows you your messages divided by the steps. In other cases, you get one line for your text messages, with the total amount.

Step discount for calls is more complicated to check, because in one call you may cross steps, and thus one minute has one rate and the next minute has a different rate.

I hope this post is of use to you, when you negotiate with you service provider.