Overview

The Telephone Department of the University of KwaZulu-Natal is run as a full-cost recovery centre where all costs associated with its operation, including staff, maintenance and equipment replacement, are raised from the charges it raises for the services it offers.
This operating policy was approved by the University Council "Planning and Resources Committee" (PRC) at its November 2004 meeting for implementation from 1st January 2005. The policy is applied uniformly across all campuses and sites.

Objectives of the Policy

The Telephone Section of the ICT Division, University of KwaZulu-Natal has the mandate to supply telephone services to all sections of the University and should do so in a cost effective and efficient manner. As telephone communication is considered a critical function, it is imperative that the service rendered be extremely reliable and to this end, the equipment used should be of good quality and well maintained. This maintenance function costs money, as does the provision of the service, and consequently the prime objective of this policy is to provide a rational approach to the provision of these funds.
The current pool of active telephones within the University of KwaZulu-Natal numbers around 6300 (Jan 2008) and the 2007 expenditure on calls and services was approximately R11m. A large portion of this fairly significant expenditure is related to actual call costs and so a second objective of the policy is to provide a mechanism to discourage excessive call expenditure.

The PBX equipment used for the telephone system generally has quite a long life of around 10 years or more; it is however expensive to replace with the estimated replacement cost at 2008 prices being of the order of R12m. Thus the replacement creates quite a significant ‘bulge’ in the main annual budget in the year that it is required so a third objective of the policy is to create an effective mechanism to provide for this replacement out of retained income and so effectively smooth out the replacement cost over the life of the equipment.

The Policy

The policy dictates that the Telephone Section will run on a complete cost-recovery basis with its sole source of income being the charges it levies for the services it provides. This income must cover all expenditure incurred by the section including salaries, growth and maintenance as well as building up an adequate reserve to provide for equipment replacement as and when needed.
This thus gives rise to the following three criteria:

User Charges (Telephone Section Income)

1. Every service provided by the Telephone Section will be charged to the user of the service. Normally this will mean that services used by staff in a department or school will be charged to the department or school’s operational cost centre.
2. A monthly rental will be charged for every line (extension) with the amount set at or below the equivalent rental as set by Telkom. This rental income is to cover all staff, maintenance and replacement costs so the actual rental level should be set to adequately cover all direct costs as well as the capital reserve provision. In other words, it is important that the rental does not result in under-recovery or over-recovery.
3. A monthly rental will be charged for the telephone instruments where the user will be offered a choice of instrument subject to Head of Department (HOD) or Head of School (HOS) decision. The charge levied for the instrument will be set at a level that will recover the cost of the instrument over its anticipated life, usually 5-6 years for most instruments.
4. Other minor services will be charged for at a suitable level to match the costs associated with the service. This includes services such as Voice-Mail and extra printouts.
   All calls made by all users of all telephones must be accurately tracked and recovered at their cost price. There will be no mark-up of call charges, thus accurate call tracking is essential.
5. A fixed service charge will be levied for moves, installations and changes; the recommended amount being the same as that published annually by Telkom for the equivalent service.

Expenditures

The Telephone Section will receive no additional annual budget from the University main fund and so all expenditure must be covered by the income generated by the service. This expenditure will include: 

1. All monthly rentals for fixed services from Telkom and other suppliers.
2. All charges for the maintenance of all equipment, principally the PBX’s but also including vehicles, tools, computers and software systems.
3. All replacement of equipment, principally the PBX’s but also including vehicles, tools, computers, cables and software systems.
4. All infrastructural development (growth) costs, such as cabling, trenching, new equipment and minor building alterations.
5. All call charges.
6. The salaries of all staff involved in managing and running the Telephone Section, including the salaries of the switchboard operators. As at November 2007, there are 3 supervisors, 6 switchboard operators, 4 technicians and a part-time, technical consultant.

Services

Services offered by the Telephone Section will change over time but the basic services offered as at January 2008 comprise:

1. Where possible, a fixed line telephone for any user that requests one and is authorised by their Head of Department / School (HOD / HOS).
2. A range of telephone instruments to suit various users’ needs.
3. Call barring levels that can be set to allow or prohibit local, national, international or cellular calls as needed by the user or as directed by the HOD / HOS.
   A voice mail service.
4. Reduced call costs to cell phones by implementing suitable least-cost routing systems. At present this is implemented through distinct services provided by each of the three cellular networks.
5. Reduced international call charges through the use of an international dial-back service.
6. Telephone features such as call back when free, call forwarding, hunt groups, pickup groups etc.
7. PIN codes for Private call use to enable private calls to be directly debited from a user’s salary.
8. PIN codes for business use to ensure accurate tracking of business calls by the user; this helps keep usage under control, particularly in situations where multiple users share a single phone.
9. Detailed accounts to be provided monthly showing call costs and call summaries per extension and per PIN code user.
10. A web site to allow individual users to examine and download their individual call history.
11. A web site to allow authorised account managers (HOD/ HOS or representative) to examine the call history of all extensions associated with an account.
12. Extra, charged for, detailed call print-outs where required.