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What are Metered Services?

Residential electric meter.
Telephone services may be billed on a metered basis, where customers pay per minute for inbound and outbound calls.
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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 08 September 2014
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    Conjecture Corporation
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Sometimes referred to as pay-per-use or measured services, metered services involve any type of payment structure where consumers only pay for what they actually use. This in contrast to the model of paying a flat fee on a recurring basis to have unlimited access to a given good or service. Public utilities such as electricity and water services are common examples of metered services.

Over the years, companies have experimented with the use of metered services in place of traditional flat fee services. This has been true with telephony services for business and residential customers. During the decade of the 1980’s, many local phone service providers introduced metered services for as an alternative to the monthly flat rate charge for local services. Essentially, the subscriber would pay a small per-minute fee when an inbound or outbound call was engaged. For subscribers who did not make use of the telephone a great deal, the savings on the monthly phone bill were significant. However, the advent of widespread use of the Internet and dial-up services made measured services for local phones impractical for many subscribers.

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Metered services remains a workable billing structure in many different applications today. Companies and individuals that contract for a toll-free number often pay a fixed rate per minute for any usage generated during the usual billing cycle. Online services such as music downloading sites often charge a per file download fee rather than offering unlimited downloads for a fixed monthly fee. It is common with most audio conference call bureaus to charge a per minute per connection fee rather than offer clients a fixed fee for unlimited use of specified number of connections each month. There are even examples of Information Technology consultants who offer metered services based on usage rather than charging a flat monthly fee.

Many companies find that metered services can be more cost efficient in some situations. Essentially, the use of metered services allows the consumer to pay for only what he or she is actively using and not any extras. Some businesses offer customers options on payment structures that allow the client to choose a flat monthly fee or the variable metered services as a means of allowing the client to determine which payment option would be suitable for the customer’s individual situation.

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