What your phone company won't tell you: New Web sites can ferret out the cheapest rates for long-distance and wireless service. Inc. Technology puts the players to the test.
What your phone company won't tell you: these new Web sites promise to shrink your long-distance and wireless bills
Dr. JoAnne Duffy knows how to scout out a bargain. She finds 10-foot Christmas trees for $35, bargain-basement prices on designer suits, and two-for-one airfare deals to Ireland. This Baltimore-based clinical psychologist honed her shopping skills in the 1980s when she was a cash-strapped graduate student. But today, when it comes to buying cell-phone service, she's mystified. Duffy, who racks up monthly phone bills of about $150, says she'd like to investigate which cellular plan is best but that as a private practitioner she's pressed for time. Case in point: she recently spent 40 minutes on the phone with Bell Atlantic Mobile -- almost as much time as she spends with a client -- regarding a $25 charge on her bill that she didn't recognize. Needless to say, Duffy can't afford many more 40-minute bill problems.
"My Ph.D. didn't cover cellular science," says Duffy. When she shops for other items, Duffy knows what she's looking for and can determine if she's getting a good deal. With cell-phone service, though, she's not sure if she should be comparing monthly rates or price per minute.
It shouldn't take a Ph.D. to figure out a telephone bill. Yet Duffy and countless business owners find themselves lost in a maze of roaming charges, peak and off-peak rates, and activation fees. Long-distance plans are no better. The recent onslaught of long-distance price wars has left most people confused about whether to choose Sprint Nickel Nights or AT&T's One Rate 7¢ Plan -- or service from a less well known long-distance reseller.
A new breed of Web sites wants to help small-business owners ascertain how to get the best deals on everything from wireless to long distance to calling cards. Point.com, Decide.com, eSpoke.com, LetsTalk.com, Telezoo.com, Telstreet.com, Simplexity.com, and others that are popping up as fast as you can say "venture capital" provide free search engines into which customers enter information about their monthly calling habits. The sites then recommend wireless or long-distance plans that should suit a customer's specific needs. Customers can order many of the recommended plans right on the sites.
And they may well want to do so to cut down on one of the biggest expenses small businesses incur. The Yankee Group reports that businesses employing from 2 to 99 people spend an average of $220 a month for phone service; businesses with 100 to 499 employees spend about $2,800. Larger companies can spend less per employee, since they can negotiate better deals directly with carriers. Smaller businesses don't have that luxury. "By just being on the wrong plan, you could end up leaving literally hundreds of dollars on the table," says Roy Prasad, president and CEO of Decide.com.
When Carol Newton visited eSpoke.com, she discovered she was leaving more than $500 on the table every month. The CEO of Priority Search Partners, a $2-million Redondo Beach, Calif., company that matches IS professionals with contract and permanent work, Newton was spending about $700 a month on long-distance calls. For only $165 she could get the same service from UniDial, a carrier that eSpoke.com identified.
Newton had never heard of UniDial, but the eSpoke site informed her that the service provider, which has 230,000 customers and $215 million in revenues, resells service from MCI, Sprint, and others. "We figured, they're solid; they're not going to be disappearing tomorrow," Newton says. She estimates that by switching carriers, Priority Search Partners will save from $5,000 to $6,000 yearly. She'll use some of the savings to get a toll-free number.
We chose to test the best of the dozen-plus sites that purport to help customers make informed telecom choices. With assistance from Michael Lauricella, an analyst at the Yankee Group, we first compiled an extensive list of sites. We narrowed the list by choosing only those sites that were already up and running and through which customers can purchase some services. We eliminated all sites backed by telecom companies, because those sites typically sell plans from only one or two carriers. Finally, we eliminated any site through which we could not contact a human being, figuring that if the site didn't return our E-mail messages or phone calls, it probably wouldn't return yours either. To test the sites, we ran the phone bills from a variety of growing businesses through the sites' search engines and came up with recommendations for economical calling plans.