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What is cutting in VOIP Technology

If we talk straightly then cutting is making more profit by selling same volume. For an example one service provider has daily average 50,000 minute volume and he makes $50 profit out of it per day. Cutting can increase the profit to 70$ daily with this same 50,000 minute. Cutting is also known as shadow billing or false billing.

There are various type of cutting in Voip Market.

1. Most simple is imposing Tax on rate
2. Connection fee and disconnection fee
3. Minute flexibility or minute customization
4. Block rate

Tax:

This is the most simple cutting in VOIP billing. Basically calculated by percentage. For an example - for a particular destination if per minute cost is 0.01 USD and imposed tax is 4% then for one minute call charges will come 0.01 + 0.01*4% = 0.0104 USD

Connection Fee or Disconnection Fee:

These two are basically same thing. Both can be used at a time or can be used only connection or disconnection fee. There is a threshold duration for both. For an example Connection fee is 0.01 for each call and threshold value is 60. That means each call will have an additional bill if a call duration is equal or more than 60 seconds. So for a 60 seconds call total call charge will be 0.01 + 0.01 = 0.02 USD when call rate is 0.01 USD.

Minute Flexibility or Minute Customization:

This is very interesting feature of cutting. Service provider can customize the duration of a minute. Normally 1 minute = 60 seconds. But using this feature service provider can change the duration of minute. For an example it can be define 1 minute = 40 seconds. So if the call is 41 seconds then it will bill for 2 minute. Usually end user checks first one or two minutes to check whether call charge is deducting correctly or not. In that case there is an option to limit Minute flexibility till certain minute. Ex: If minute flexibility limit it 2 then first two minute minute flexibility will not work. From 3rd minute per minute will be 40 seconds.

Example:

Call rate = 0.01 USD
Pulse = 60 seconds
Minute Flexibility : 40 [seconds]
Minute Flexibility Limit: 2 [minute]

If call duration is 60 seconds then bill will be = 0.01 USD
If call duration is 120 seconds then bill will be = 0.02 USD
If call duration is 181 seconds [2 minute 41 seconds] then bill will be = 0.04 USD

Block Rate:

This feature is rarely used but really an useful feature. This feature can be used positively or negatively from the end user points of view. Service provider can define rate blocks. For an example it can be defined rates for various duration block. If call duration is 1 to 120 seconds then call rate will be 0.01 , if call duration is 121 to 400 seconds then call rate will be 0.011. If call duration is 401 seconds to 1000 seconds then call rate will be 0.012 etc.

Using block rate service provider can make lucrative offers to customer. Like - Talk more spend less - long duration calls can have less price and small duration calls can have more price like that.

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