British Telcom (BT) has announced that it is increasing its connection charge to 0.088 Euro per call. This makes the Skype charge (0.039 Euro per call) seem less of a burden, but it is a worrying development that other Telecoms companies are moving this way.

What is other people's experience around the world of "connection charges"?

Given that the process is wholly automatic, with no physical operator involved, connection does not increase the operational costs. So why, other than Corporate Rip-off, should there be any connection charge at all.

Interesting post.
Here in the United States the cost charges levied by the various telecom companies vary from State to State.
In my State of PA there are no connection fees.
I can't speak for the other 49 but I don't think connection fees are levied anywhere.
Note that the UCP provides for totally free calls to landlines and cellphones (no connection fee) throughout the USA/Canada.
This policy ensures that Skype remains competitive.
If British Telecom is a state monopoly (the name suggests it is) or has at least very large market share with few sizeable competitors they can presumably get away with imposing/increasing a connection fee.
Our market structure with around 10 very large telecoms and hundreds of smaller ones more or less guarantees fierce competition and hence low prices.

BT used to be a state monopoly, but now you can choose other carriers over your (nominally) BT line. I for one use Tesco Home Phone. They still use the minimum charge mechanism, and more importantly, per second billing.

It's true the connection may not increase the operational costs but BT like any telecom provider is in the business of making money so money has to be made somewhere and whilst some charges go up, others go down. The price of BT customers' bills have been slashes over the years and value has been added such as free voicemail which we once had to pay extra for and you can get caller display for free when we used to have to pay for that too.

It's worth noting that BT's connection charge only applies to chargeable calls so on their basic 'Option 1' plan you pay the charge on all calls but on 'Option 2' you don't for calls to UK landlines in the evenings and weekends. On 'Option 3' you don't pay a connection charge 24/7 for calls to UK landlines. Even on the 'Option 1' plan you still get the first hour of each evening and weekend UK landline call for 5.5p. Whilst BT increased their connection charge, it has also reduced the price of its Option 2 and 3 call plans and is clearly restructuring to encourage people to sign up for inclusive call plans. I'm currently on 'Option 2' because I get it for free for a year and it's helped to slash my phone bills. Of course I'm free to add services from other companies such as http://www.call18185.co.uk/ and I use Skype where appropriate too and I may even switch from BT after my Option 2 contract is up.

Personally I don't have a problem with connections charges because you have to take into account the whole package and the level of service. Telecom companies have to make money somewhere and I'd rather it was from a connection charge than a per minute rate. It's a pity Skype want it both ways by charging for connections as well as for the plan as in the case of SkypePro, oh and the level of service isn't great.

@ Norman Musgrave
British Telecom was privatised in 1984 and has been regulated since then (until recently) to increase competition and bring prices down. There's so much competition now that the regulations have been lifted. There's a myriad of choices out there if people just take the time to look.