Anyone who has bought software knows the model: you pay per user per month. For the provider it is an attractive way to earn money, because a single platform that thousands of users connect to, each paying every month, produces predictable and growing revenue. More and more business phone providers have adopted that model, so your business phone system is now often priced per user.

That the model works for the provider does not mean it suits the industry. In this article we explain why telephony fits poorly into per-user pricing, why we charge per minute and how we group people into generous plans. If you want to see straight away what that means for your team, work it out on our pricing page.

For software, a per-user price makes sense, because every user has their own account, their own data and their own licence. For the provider, revenue grows automatically with every business that grows, without extra cost behind it. That makes it one of the most profitable models there is.

Now imagine your streaming service charged per viewer instead of per stream, so you paid extra as soon as someone sat down next to you on the sofa. Or that your broadband was billed per device in the house, so a new printer or an extra laptop pushed up your contract. Nobody would find that logical, because the cost of such a service does not come from the number of people or devices but from the use. Telephony works the same way.

How telephony used to be sold

A phone system was always sold per system and per number of available lines. The number of lines decided how many calls could take place at the same time, and that is what you paid for. Nobody came round to count how many handsets were in a building, because it made no difference to the cost.

That logic still holds. Whether five or fifteen handsets hang off a number, the number of calls coming in does not change. What does change is the number of minutes, and that is exactly where the real cost sits.

What about reception, the kitchen and the colleague who picks up?

Per-user pricing assumes every phone belongs to one person. In an ordinary business that is rarely the case. There is a handset on reception, one in the kitchen, one in the warehouse and one in the meeting room. If the phone rings while someone is walking past, that person simply answers, even though they are not a “user” on the system.

With per-user pricing you have to make a choice for each of those handsets: pay for a user who is not a person, or leave the handset out and miss calls. With us, shared handsets never count, because they are devices, not people. You only pay for the minutes that come in on them.

Who keeps track of the users?

Large organisations have an IT department that creates accounts and removes them again. Small businesses usually have no administrator. Someone connects the number today, and when that person moves to another role next year, nobody quite knows who is on the system any more.

In practice a new administrator mostly adds users but rarely removes anyone. Disconnecting feels risky, because who knows whether the main number will still work afterwards. The result is that the number of paid users creeps up unnoticed, while the number of people who actually take calls stays the same. With a generous plan that problem does not arise, because an extra name on the system does not change your monthly bill.

Freephone numbers do not fit the model at all

On a freephone 0800 number you pay for the call instead of the caller. The cost then depends entirely on how many minutes customers spend calling you, and not at all on how many people answer. A per-user price cannot even be attached to it, which shows that the model comes from software rather than from telephony.

It only works if a provider builds one package on one phone system, wraps a sales funnel around it and tries to get as many users as possible onto one line. For the provider that is tidy, but for you it means your telephony is set up around the provider’s revenue model rather than around the way your business is called.

Networks settle with each other per minute

There is another reason why the minute is the fair unit: phone networks charge each other per minute too. When a call passes from one network to another, the networks charge each other an interconnection rate per minute. That interconnection charge is closely regulated, so that networks do not overcharge each other.

That settlement applies to all traffic, inbound and outbound. Even when a customer calls your number, we pay the interconnection charge per minute to the provider that customer is calling from, to deliver the call to us, and if you forward to a mobile, we pay the network that delivers the call to you. So every call you receive costs money per minute, however many users are on your system.

In the United Kingdom, Ofcom oversees this market, as the ACM does in the Netherlands. As a licensed operator with our own interconnect, we work with minutes as the unit ourselves, which is why we charge you the same way.

Our per-minute price covers more than the call alone. It also includes the capacity, meaning the number of lines needed to let calls come in at the same time, and the platform itself: the routing, opening hours, menus, queues, voicemail and the dashboard. So there is no separate line on your invoice for lines or platform fees.

How we charge: per minute, with a generous plan

Because the real cost arises per minute, you pay per minute with us: 5p for calls delivered over the internet and 10p for delivery over the fixed and mobile networks on premium routes. That means you always have enough capacity, calls arrive over good routes or over the internet, and you pay nothing for minutes nobody used.

We do know users, but we group them into generous plans. Solo is for one person, Team 2 for two people and Team 8 for up to eight people at £43 a month. Adding or removing a colleague within your plan does not change your monthly bill, and handsets on reception or in the kitchen are free.

According to Ofcom, an average UK business line carries about 113 minutes a month. A team of four using that much pays £43 plus £5.65 to £11.30 in minutes with us, depending on how many calls end up on a mobile. At £15 per user, the same team would pay £60 a month, and a team of eight £120.

When does per-user pricing make sense?

To be fair: for a call centre where every agent is on the phone all day, a fixed per-user price with unlimited calling can work out well. The minutes per person are then so high that a per-user bundle becomes cheaper than paying per minute. Bear in mind that unlimited calling almost always comes with a fair use policy.

For most businesses, though, usage is much lower. Then you are best off paying per minute with a generous plan: it is fully transparent, all traffic is possible, the underlying charges are overseen by the regulator and you do not have to keep track of users. If your team really is on the phone all day, get in touch and we will put together a price that fits.