Telecom

# Interval Billing

The term interval billing denotes a mechanism used to calculate fees due for a service based on a specific amount of service provided. Interval billing is widely used by Swiss telecom service providers for the purpose of calculating phone bills. Typical examples of phone call interval billing mechanisms include per-minute billing and per-second billing.

When interval billing is used, a fee is charged whenever a threshold between one interval and another is crossed.

Swiss telecom service providers normally list interval billing mechanisms using two numbers separated by a forward slash (Example: 60/1). The first number shows the number of seconds in the first interval per phone call. The second number shows the number of seconds in each additional interval in the same phone call.

Per-minute billing (60/60) is widely used in Switzerland. With per-minute billing, you pay for every 1-minute interval used.

Example: If your phone service plan uses per-minute (60/60) billing and you make a 61-second phone call, you will be billed for 120 seconds (2 minutes) because your call spanned two 60-second intervals. If your phone plan used 60/1 interval billing, you would be billed for 61 seconds (one 60-second interval plus one additional 1-second interval).

As a general rule, the shorter the billing intervals, the more customer friendly the telephone service is. Per-second billing (1/1) is the most customer-friendly form of interval billing because you only pay for the actual seconds which you use. Per-minute billing is less customer friendly because each phone call is rounded up to the nearest full minute and billed accordingly, even when only one or two seconds of that minute are actually used.

A less common method of interval billing uses money units (centimes, for example) rather than time units for rounding phone call bills. For example, Swiss telecom service provider Swisscom has used 10-centime intervals for many phone calls for many decades. When a 10-centime interval billing is used, total costs are rounded to the nearest 10 centimes. Example: Your phone plan has a 4-centime fee per minute and uses 10-centime interval billing. If you make a 61-second phone call you will be charged a full 10 centimes. The reason for this is that you are billed for 2 full minutes because you exceeded the first interval, and the resulting 8 centimes is rounded up to 10 centimes (1 interval). This can significantly increase the cost of short phone calls.

There are also telecom service providers which round off phone calls based on both time units and money units.

Interval billing is accounted for in the moneyland.ch telecom comparisons. The interval billing calculator lets you simulate different interval billing mechanisms to compare the costs based on your specific calling habits.

More on this topic:
Interval billing calculator
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Expert Ralf Beyeler
Ralf Beyeler is the telecom expert at moneyland.ch and also covers other areas of personal finance.