Charging plan in a telephone network

A charging plan (tariff plan) is the method used to calculate how much a subscriber pays for telephone service. Charges should recover costs, be fair to users and be simple to apply.

Components of a charge

1. Installation (connection) charge: one-time fee for a new line.
2. Rental: fixed monthly charge for access.
3. Call (usage) charge: depends on
   • duration of the call,
   • distance (local, national/STD, international/ISD),
   • time of day (peak or off-peak).
4. Charges for special services: value-added services, data.

Types of charging

• Flat rate: fixed monthly charge, unlimited local calls.
• Message rate: fixed charge per call regardless of duration.
• Measured (time and distance) rate: charge per unit of time, with the unit rate depending on distance and time.

Methods of recording

• Periodic pulse metering (Karlsson method): the exchange sends metering pulses at a rate set by the distance band; each pulse adds one unit to the subscriber's meter. A longer distance gives a higher pulse rate.
• Detailed billing / CDR (AMA): the SPC exchange records each call (calling and called number, start time, duration) in a call detail record; the billing system prices it. This also supports itemised bills.
• Prepaid charging: an IN/online charging system deducts balance in real time.

 Call --> Exchange --> metering pulses / CDR
                          |
                    Billing system --> Bill

Example: if a local unit is Rs 1 per 3 minutes, a 7-minute local call is charged 3 units = Rs 3.