It is important to understand the true revenue potential when running a Premium Rate telephone service. And just how much income can be generated even with a service attracting a limited number of callers. Although calls are charged to the public at between 10p and £1.50p per minute, the amount paid out by the big telephone networks (eg. British Telecom, Cable And Wireless) is normally about 75% of the gross income. Thus for calls costing £1.00 per minute, the service provider will receive 75 pence. The carrier retains the other 25p for delivering the call and collecting the money.
If you use a Service Bureau, as they supply the lines and equipment, they retain part of the revenue you earn from the carrier to cover their costs. The percentage of the income they retain varies between 10% and 25%, depending on the volume of calls you generate in any one month. In selecting a bureau be aware that some bureaus retain as much as 50% or more, and also levy additional charges for any services they provide.
THE CALCULATIONS
To calculate the income potential of your service you need to know:
- The number of calls which your service can receive simultaneously.
- The average length of your calls.
- The revenue you receive per minute.
With this information, you can work out the revenue potential for your service.
[I] The number of calls you can receive
Most premium rate telephone computers will allow your message to be accessed by 30 or more callers at any one time. Should your service prove tremendously popular, it can be networked on several computers allowing hundreds or even thousands of callers to access your service at any one time.
[2] The length of your message
Assuming your message length is four minutes, and your average hold time is 3 minutes, then the total number of calls a 30 line computer could handle in one hour would be 600. This total is arrived at on the basis that there is capacity for 20 three minute calls per hour on each line. Multiply this figure by 30, being the number of lines into the computer, and you have a total of 600 calls per hour. With 24 hours in a day, the total number of calls the system could receive per day would be 14,400.
[3] Your income per minute
If we assume you are operating a recorded message service on a tariff of £1.00 per minute, then your share of the income, after deductions by the telephone networks (25p.) and the service bureau (10p.), would be £0.65p per minute.
THE POTENTIAL REVENUE
On the unrealistic assumption that you could persuade callers to occupy all 30 lines accessing your service throughout the day and night, and each call was for an average duration of 3 minutes, your income would be:
- Income per call: 65p. x 3mins. = £1.95.
- Income per hour per line: £1.95 x 20 calls per hour = £39.00
- 30 line income per hour: 30 lines x £39.00 = £1,170.00 per hour
- Full day’s income: £1,170 x 24 hours = £28,080 daily
- MONTHLY INCOME WOULD BE £28,080 x 30 days = £842,400.00
Of course, this is the maximum your service could generate. For most services, [though there are exceptions such as Adult and Chat lines], the call levels fall off dramatically after 10 p.m. and only pick up again after 11 a.m. In most cases your services will only be active for a small proportion of the day.
Nevertheless, you don’t need to achieve massive call volumes to earn a very healthy income from your service. Even if your service averaged only 6 calls an hour, you would still generate an income of over £7,000 a month.
