A company stuck under contract breaks loose.
We were recently able to help a large retirement community in Indianapolis save thousands of dollars and give them the best business telephone deals on their phone service and also provide them with a new business phone system.
Morningside at College Park called and said it was time to renew their telephone service contract with AT&T. They wondered if we offered incoming dial tone service (local telephone service) more cost effectively than AT&T. As we dug into this opportunity, we realized that Morningside had 152 Centrex lines. Centrex service had been offered to Indiana Bell, Ameritech, SBC and AT&T customers for the last 40 years or more. In the past, Centrex was a cost-effective solution for customers moving from 5 lines to 6 lines. As a matter of fact, Centrex customers received 11 Centrex lines for the cost of 6 POTS (Plain Old Telephone Service) lines. This was a good deal for customers because they received more lines for the same amount of money. It was a good deal for AT&T because it was a termed agreement and they could count on that recurring income for the life of that agreement.
We should also explain the economics of this situation. POTS lines cost approximately $60 per line per month and Centrex lines cost approximately $30 per line per month. That explains why moving from Line 5 to Line 6 made it beneficial to move from POTS service to Centrex. A basic Centrex service had a minimum of 11 lines and cost approximately $320 per month. Morningside had two groups of people that telephone service needed to be provided. Their employees who operated on a small telephone system and their residents who operated on single line telephones. This allowed their residents to have a telephone number specific to each residence and to make and receive telephone calls. The employees used a telephone system that shared a number of lines amongst themselves.
Morningside operated with the Centrex service for 20 years and realized it was time for a change but needed to know what was available to suit their needs.
Let’s focus on the changes in the industry and newer services that allows our solution make sense/cents. Services that were viewed as appropriate for only the largest customer have been introduced with a focus on small businesses. One of those services is ISDN/PRI. PRI as it has come to be known is dial tone delivered on a T-1 or digital circuit. Think of a ISDN/PRI as a “Super Telephone Line” on which up to 23 simultaneous conversations can be held. One of the most sought after benefits of PRI was the ability to have Direct Inward Dialing. Direct Inward Dialing or DID is what make this solution feasible to Morningside. A PRI could have anywhere from one to one thousand distinct individual numbers pointed to itself. Consequently, a business that previously had 152 Centrex lines could have the same number of DID numbers pointed to one or two PRI’s. When we first got into the telephone business, PRI’s typically were offered to large businesses for approximately $1400 per month. In 2015, it is very common to see PRI’s offered for $300 per month or less. This savings is what sold our solution to Morningside. There would be a cost associated with this saving however.
We proposed that Morningside move from their Centrex service to a PRI. We put in two PRI’s and gave them 152 DID numbers and 46 call paths and reduce their spending from $2,625.00 monthly to $725.85. This is a savings of $1,899.00 a month. That savings however did come at a cost. To get our solution to work, we would need to put in a telephone system that was capable of supporting almost 150 telephones of varying types and two PRI’s. We priced and configured a Panasonic KX-TDE 600 Hybrid IP Telephone System that was capable of supporting any incoming telephone service types as well as a combination of telephones (analog, digital or IP). This solution worked well for the residence because they didn’t have to change the telephones they were accustomed to. Even with the telephone system purchased via a monthly lease, Morningside would save $1,138.00 for 36 months and after 36 months would save $1,899 for the remainder of months they had our solution in place. The service has been implemented for nearly a year now. There were a few minor things that needed additional attention initially, but we have worked through those and residents and employees alike have started to slip into a routine and the savings are adding up in a big way.