Premium-rate telephone numbers are telephone numbers for telephone calls during which certain services are provided, and for which prices higher than normal are charged. Unlike a normal call, part of the call charge is paid to the service provider, thus enabling businesses to be funded via the calls. Charges are presented as part of the normal telephone bill, so the original purchase is usually on credit - "enjoy now, pay later…"
Historically regarded as the "bad boy" of the telecoms sector due the initial abundance of phone sex services, premium rate has gone mainstream in several markets in recent years and has established itself as a key revenue generator for telecoms and media companies.
Indeed, the phenomenally successful "Who wants to be a millionaire?" TV show which has a global franchise is financed by viewers dialling such numbers in an attempt to become contestants.
In the UK, birthplace of premium rate and the world's most mature and regulated market, several satellite TV stations have recently emerged, inviting viewers to call such numbers by answering often absurdly easy questions that they see on-screen.
European MTV and youth channels have long been pumping out ads for cell-phone "tuning" products such as ringtones, all of which uses premium rate or it's relatively new variant, Premium SMS, to collect payment.
As with mobile services, the U.S. is lagging behind Europe when it comes to such (1-900) numbers, and is practically the only market that any significant chargeback issues associated with them.
This having been said, the world is a big place and given the open architecture of the web - it's not called "world wide" for nothing - premium rate phone billing is the key to webmasters squeezing every last cent from their foreign traffic.
The now redundant dialler utilised premium rate as its underlying billing mechanism and whilst the dialler is dead, premium rate telephony on which it was based is still very much alive and kicking.
The solution needed in order to monetize your foreign traffic therefore is so-called IVR (Interactive Voice Response) Billing. The surfer dials a premium number in order receive the password needed to gain access to your members' area for a limited amount of time, as determined by you.
Several "solutions" exist out there that grant surfers' access for the time that their phone is connected to such a number, so that they pay you on a per-minute basis. However, given that the surfer still needs a phone line for access to the web; such billing is wholly inadequate since the majority of surfers simply do not have the luxury of a second phone line.
To resolve this, our system allows surfers to purchase a password which buys them a block of time which they are free to use either immediately, or at a later stage. This way, the army of single line phone users will be able to enjoy the content at a time of their choosing. The "hold time" for the caller in order to generate said password is fixed at just over five minutes. So, no horrendous phone bills for the surfer and whilst they enjoy the content, the clock is no longer ticking - making the them feel more comfortable paying you this way and therefore more likely to come back for more at a later stage.
In all those counties where local numbers can be used, we employ them. More often than not, the phone companies dictate the end-user call charge, not us. Typically, we use the highest tariff available. A surfer in Austria, therefore, will pay more for his password than his Spanish counterpart. But consequently, the payout to you will be higher (For Austria, you receive $10 for each password sold).
In those markets than do not have domestic premium rate, the surfer in invited to make a regular international (IDD) call, the cost of which varies enormously since it depends on the carrier and price plan that the end user has with their phone company to make such calls.
We have revenue share agreements in place with the so-called "terminating" Telco's, i.e. the phone company to which the call is made. Whilst the payouts are not as high, at least this way you have a new revenue stream from Brazil, Russia, India, China and beyond.
The phone companies are reliable but notoriously slow payers when it comes to premium rate since usually they wait until they have collected they money from their subscribers before passing it on to us.
To this end, we factor payment and pay you long before we get paid by them and we absorb the (small) risk of chargebacks - so the money you see in your realtime stats is the money you get - every two weeks by wire, check or ePassporte.
Globally, more and more countries are only just beginning to introduce premium rate, with Telco's keen to generate revenues from this tried-and-tested billing method, whilst traditional voice revenues continue to come under pressure from VoIP and increasing fierce competition.
The addition of premium rate billing will therefore hand you a revenue-stream both now, and or many years to come.
