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Why does the same phone feature cost 20% more for businesses?

Superuser
Superuser
Posts: 13,537
Thanks: 4,876
Fixes: 27
Registered: ‎22-08-2007

Why does the same phone feature cost 20% more for businesses?

Looking here I note that the charges for business lines is 20% more expensive than for residential lines.  Why?  What is the justification?  How does the provision of function X cost more on a business service than a residential service?  BOTH business and residential services are subject to VAT, so the answer is not businesses have to pay VAT and residential services do not.  Also the fact that businesses can reclaim the cost of VAT has nothing to do with the cost of providing the service.  Frankly it looks like profit maximinsation!
Quote
2. What call features are available and how much do they cost?
All packages feature the following call features as standard:
1471, 141, Voicemail (1571), Ringback (10p per use), Reminder call (15p per use) and Conference calling (40p per use)
You can also add any combination of the features shown below:
Call features / Monthly cost / Available in call feature bundle?
Caller Display / £0.99
Reminder Call (Unlimited use) £2.50
Call Waiting / £2.50
Call Divert / £2.50
Ring Back / £2.50
Voicemail Extra (Call minder) / £3.00 / No
Anonymous Call Reject / £4.00 / No
1. Although Voicemail (1571) is free, you'll need to add it via the Telephone Control Panel before you can use it.
2. Prices for Business customers exclude VAT.
3 REPLIES 3
Superuser
Superuser
Posts: 13,537
Thanks: 4,876
Fixes: 27
Registered: ‎22-08-2007

Re: Why does the same phone feature cost 20% more for businesses?

@Mods,
Hmmm no response to a hard question!  I have wondered since posting if this question should have been raised in the Business User's Forum rather than here?  Thought I'd try to ask for your thoughts / action by reporting the post to the mods (seemed logical!) but got this amusing messgae...
Quote
You can't report your own post to the moderator, that doesn't make sense!
  Cheesy
Please move if you think that is more appropriate - I posted here as it relates to phone service and it was whilst reading a different thread in here that the matter arose.
Cheers,
Kevin
Community Gaffer
Community Gaffer
Posts: 17,698
Thanks: 680
Fixes: 167
Registered: ‎05-04-2007

Re: Why does the same phone feature cost 20% more for businesses?

I'm not 100% sure of the answer, but I believe it's the way we worked the product economics on the Business side of things. The line rental is a different price to residential, as is the broadband service.
If this post resolved your issue please click the 'This fixed my problem' button
 Chris Parr
 Plusnet Staff
Superuser
Superuser
Posts: 13,537
Thanks: 4,876
Fixes: 27
Registered: ‎22-08-2007

Re: Why does the same phone feature cost 20% more for businesses?

Hi Chris,
It would be good to get a definitive answer please.
Going all the way back to GPO supplied phone services, business line rental has always been different to (more than) residential lines on the basis that business users got an expidited faults service.  Therefore given that there is (at least claimed to be) a difference in the service offer, the price difference has a tangiable justification.
As for the other services there is no cost difference in delivery or service between business and residential.  This looks like little more than the practice of how prices are 'presented' differently to domestic and commercial consumers... ...as much as anything else to make the commercial customer percieve it is not costing them the full price tag, as they can "get the VAT back" or more correctly offset it against VAT on sales made.
Domestic: X including VAT
Commercial: Y plus VAT
In most circumstances, the offered package being identical, the end price is the same.  However in the case here from PN, X equals Y so the charge for the same service to commercial users is 20% higher for no discernable difference in service.
Cheers,
Kevin