Billing arbitrage
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This document shows the percentage of calls that fall into 1-minute increments from 0.50 to 20.50 minutes, with over 50% of calls being under 1.50 minutes. It also notes that billing calls in 1-minute increments rather than by the second can result in "hidden margin" or extra profit for the carrier, since customers are billed for the full minute even if their call ends just after a minute mark. The amount of hidden margin varies depending on how close the call length is to the next billing increment.
Billing arbitrage
- 1. Minutes 1/1 0.50 50% 1.50 25% 2.50 17% 3.50 13% 4.50 10% 5.50 8% 6.50 7% 7.50 6% 8.50 6% 9.50 5% 10.50 5% 11.50 4% 12.50 4% 13.50 4% 14.50 3% 15.50 3% 16.50 3% 17.50 3% 18.50 3% 19.50 3% 20.50 2% Billing Arbitrage Revenue/Minute = COS/Minute Margin if Revenue Billed 60/60, COS Billed 1/1 Note: The "hidden" margin for each call will vary depending on not only the length of the call, but whether the call ends precisely at the minute mark (no hidden margin), goes over the minute mark by only a few seconds (a large hidden margin, particularly if the call only last a few minutes), or almost reaches the next minute mark (a smaller hidden margin). For purposes of calculating the average hidden margin, the call length should be at the mid-point between the two whole numbers (i.e. 2 and 3, or 2.50) closest to the "Average Call Duration" experienced. Page 1 of 1