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Why automated or IVR calls are costlier

Anyone who is in hosted IVR market in India would face this question from their customers why IVR ( Interactive Voice Response) outbound calls are costlier than normal telephone or mobile calls! Some clients would even opine that, it should be cheaper than normal mobile calls as hosted IVR service providers must be having lot of connections from telecom operators and must be getting bulk pricing from them and they should pass on the benefit to their clients!

But the actual situation is very different. Hosted IVR Service providers do not enjoy any special or bulk pricing. And they can not actually match the normal telephone or mobile outgoing call charges! Here are few reasons why:-

1. Cost of Infrastructure
Hosted IVR Service providers invest lot of money in building telecom infrastructure. For example, they buy the following hardware
a. Computer servers for running CTI applications, Database storing and Web servers for online reporting for accessing via web.
b. CTI ( Computer Telephony Integration) boards for connectivity with telecom lines known as PRI lines.
c. Power Back up.
d. Back up telecom infrastructure from multiple telecom operators.

In comparison, for making telephone call, one just has to get a connection and start making calls and pay as per usage. For mobile, one may have to invest around Rs. 1000/- for a mobile phone and start making outbound calls manually.

So, automated outbound calls made by IVR use all these infrastructure and it has to be costlier than normal mobile outbound call cost.

2. Cost of IVR Software

Hosted IVR Service provider has developed IVR Software/Platform using which one develops many voice applications, schedule calls, present detailed call reporting on website which can be accessed by their customers online and live. Development of this kind of IVR application requires lot of man hours. So, cloud Telephony providers has to add some cost to their voice calls, which incidentally, is their only source of revenue.

3. Call Logic and Customisation

A normal telephone call consists of just punching in numbers or speaking once the called party picks up. But an automated call goes through many works which are done by smart IVR software. For example, it has to retrieve the telephone number from database which may reside in some other location, dial out and track record whether the call got connected or not. If connected, after how many rings, call duration etc. Then it has to be presented in website report and kept it available for many years! Apart from these, hosted IVR service providers designs many call triggering logic before it actually makes a call!
So, how can this kind of ‘same outbound call’ be costing same as normal outbound call charge of a mobile connection ?


4. Support

Cloud IVR Service providers has to provide 24 hours support to their clients. This requires dedicated and redundant man power.

So, if you are looking for some cloud/Hosted IVR Services, never expect its prices to be comparable to your normal mobile outbound call charges. You might find some hosted IVR companies who are offering such prices, they are doing so because of competition and would compromise in their service delivery.

Just my two cents!

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{ 4 comments… add one }
  • Vijay Sharma April 23, 2013, 9:38 am

    Good post Uttam, though in some cases with the use case if being for incoming it is not as costly and for outgoing especially more use cases for us at exotel.in come for outbound ivr across std which more or less makes cost similar and if value is being created as you rightly said people will pay for it. They should after testing it.

  • Uttam Pegu April 23, 2013, 4:40 pm

    Thanks Vijay.
    Either way, I think it is time the prices of IVR calls should be more than normal telephone/mobile calls.
    Else, it will be difficult for cloud telephony companies to sustain themselves. I strongly feel that it is justified that IVR calls are costlier.

  • My Say April 23, 2013, 5:54 pm

    indeed it is justified that IVR calls are costlier .. nice post !!

  • Karen Matthews May 1, 2013, 1:00 am

    Good post, It does speak relevantly of cloud telephony, and justified well that IVR calls should be bumped up and justified to be more costly.

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