3.26 The new contract links the Department's payments more closely to their use of telecommunications services. Thus the majority of their payments for these services will depend on the number and size of the sites and the number of individual users taking the services. Also, for circuit switched services, the Department will pay for each telephone call by the minute and, for the call reception service, for the number of calls handled.
3.27 In addition, the tariffs payable on three of the telecommunications services, the Point-to-Point, Packet Switched, and Call Reception and Delivery services, attract a volume discount. The first two attract discounts of ten per cent for every 20 per cent increase in the number of users12. BT may offer the system to other users, including non-government organisations, and these discounts ensure that the Department should benefit from any resulting increase in volume in these services. The prices paid per call for the Call Reception and Delivery service decrease if the number of calls exceeds thresholds defined in the contract.
3.28 There are no volume discounts for third party use on the other services as the Department considered that payments for these were already sufficiently sensitive to their own level of use. Departments should bear in mind the opportunities for such volume discounts when arranging long term service contracts.
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12 The number of discounts for the Packet Switched service is limited to two over the contract.