Posted: 08/1999

Push 0+ for Profit
By Jay Lewis

Many agents have overlooked selling operator services–a service that can still
generate high commissions in the days of falling long distance rates.

Operator services are not just for hotels and hospitals; they can be sold to more
common business clients to whom agents already are selling 1+, data and Internet. These
are customers with manufacturing facilities and office buildings that may have one, two or
even more payphones located in their lobbies or employee areas. Agents are leaving revenue
on the table by not knowing how to create additional commission from these payphones
through operator services.

While the marketing of 1-800-CALL-ATT, 1-800-Collect, 800 origination on calling cards
and other dial-around services have caused a decline in the number of operator service
calls over the last three years, there still are a lot of calls being made through 0+
dialing. And, with rates at 55 cents per minute, agents offering operator services can
generate a substantial commission stream.

What Is Operator Services?

Operator services–more commonly referred to as 0+–is a billing mechanism initiated by
pressing 0 prior to making a call, and billing it to a calling card, credit card or a
third number, or billing it collect or person-to-person. These calls differ from
direct-dial 1+ in that all operator service calls pass through either an automated or live
operator.

Such calls are made primarily by hospital patients, hotel guests, payphone users and
prison inmates.

While direct-dial rates have plummeted over the last year, operator service rates for
interLATA (local access transport area) calls have increased to 55 cents per minute, plus
some associated operator surcharge (commonly referred to as the "bong tone").
The basic operator surcharge currently ranges between $1.75 to $9.95 with the major
carriers. In addition, many phone owners assume a property-imposed fee (PIF) that can
range from $1 per call to as much as $7 per call.

Both the Federal Communications Commission (FCC) and state utility commissions have set
guidelines for the maximum call cost for a certain period of minutes, which varies from
state to state. Many of us have read articles about consumer complaints regarding
instances of excessive pricing. Generally speaking, gas stations, truck stops, convenience
stores and phones in remote locations are places that charge these excessive rates. Most
hotels and hospitals traditionally choose rate plans that are rated reasonably.

Selling 0+

Several companies can provide agents with an operator service agreement. As with 1+
long distance, these specify volume thresholds with corresponding commission levels. To
receive a very competitive commission, agents must sell operator services heavily. If such
an effort is not possible, becoming subagents would gain agents quick entry into this
field.

A major difference with 0+ is that agents will designate that a portion of the
commission be paid directly to the hotel, hospital or payphone owner.

In addition, commission levels are much higher than compared to 1+. Depending on volume
and rate plans selected, commissions could range between 35 percent to 65 percent. This
would not include any additional PIF that may be added on to the cost of a call. Of
course, the commission and PIF would be divided between the agent and site owner. Agents
could expect to retain between 50 cents and $1 on a six-minute calling-card call.

Agents who never have sold 0+ before should seek out an established master agent or a
carrier that can provide training. Fortunately, most carriers offering this service have
made completing paperwork very easy. Some particular information that needs to be
collected includes: 1) Instructions for people in a hospital or hotel to access an outside
line for local, long distance and international calls; 2) Nonemergency local phone numbers
for police, fire, poison hotline, etc., so the operator can place an emergency call for
the caller if necessary; and 3) A complete list of all phone numbers that are to be
covered. (Any phone number that is missed could cause the site owner to be vulnerable to
charges billed back to his or her facility without the ability to collect for the call.)

Agents also need to take care and ensure correct private branch exchange (PBX)
programming, dialer installation and the use of correct presubscribed interexchange
carrier (PIC) codes. If a facility selects a separate 1+ carrier from the 0+ provider, its
PBX will have to be programmed with the 0+ carrier’s PIC code, or dialers will have to be
installed by that carrier.

A major selling point for 0+ is that the agent does not have to gather customer credit
information, as the customer receives a monthly commission check, not a bill. As a result,
agents do not have to be concerned with a customer being rejected by a carrier for poor
credit.