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| Billing World & OSS Today: Features |
Deregulation Significantly Complicates
International Interconnect
By Susana
Schwartz - February, 2006 |
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Because deregulation spawned multitudes of
mobile and wireline providers around the world, the numbering
plans with which U.S. carriers must work are approaching the
many thousands of dial code breakouts. That has greatly
affected the management of settlements, routing and
operations.
Defined numbering plans exist in national
settings, but international operators are choosing and
changing their dial digits and destination definitions more
frequently-sometimes every week or two. Although notification
is required, dynamic changes still lead to ambiguities in dial
code plans. That makes the break-out of thousands of
destinations and wholesale partner dial code rates a quagmire
to translate. Increasingly, senior management wastes time
disputing the handling of calls or verifying charges for
completion of customer calls over other networks.
KNOW YOUR PARTNERS
"In
today's international interconnect environment, you have to be
more defensive and proactive in managing the huge numbers of
agreements you have," warns Steven Bois, manager of
international carrier operations for Sprint. "Seldom do
definitions match among wholesale partners, which leads to
ambiguity that worsens as the international marketplace
grows."
Bois marvels at the number of new mobile
networks brought on by deregulation. "Where there were once
150 carriers, there are now easily double that," he says, "and
where it used to be one cost per country, it's now multiple
costs for multiple networks within the country-for mobile or
fixed."
"All you need is a switch and re-routing
capability to an off-shore country, and you can start a mobile
company or sell broadband on a wholesale basis," says Balaji
Ramarao, senior executive for strategy and planning for
Accenture's North American service line. In his opinion, the
international interconnect market has become something of a
"devil's workplace," with arbitrage leading to "cherry
picking." 
Cherry picking refers to the practice of
two companies defining the same code range in different
ways-one as mobile with higher rates, and the other as
fixed-line with lower rates. Ultimately, other companies in
the interconnect agreement that aren't aware of the two
different rates end up paying higher tariffs and sustain a
serious loss.
"You also have people disguising VoIP
traffic, which is harder to identify-especially when certain
companies learn to keep calls on IP until they arrive at the
closest hop to the call's destination," says Ramarao. He notes
that incoming calls are turned into IP packets for
transmission over the Internet, at which point IP packets are
converted back into regular phone calls for passage into the
network as national calls. "Anyone with a decent pipe and a
PBX can send the call out and make it look like a local call,"
Ramarao says.
Indeed, deregulation opened the
floodgates to even those companies with very limited
infrastructure. By offering cheaper hubbing rates, these
companies increasingly link up with larger players
establishing offshore operations. "That means larger carriers
fall into pitfalls left, right and center. The margins are so
thin that the biggest companies have the most to lose, and the
smaller players have the most to gain," says Joe Kiriacos,
director of worldwide sales engineering at Telarix.
That's frustrating, since technologies like VoIP could
actually be a key to simplifying international interconnect.
"VoIP has simplified international interconnect in many ways
for us, as connections with VoIP players are much easier than
with traditional TDM networks," says Bois. "Rather than going
through a process of ordering and provisioning bilateral
circuits-where each carrier leases half of a terrestrial or
satellite circuit-you now interconnect via IP connections that
establish links." That, Bois says, enables his company to
expand the number of its partners, and the choices it has for
terminations.
However, as companies wade through more
and more rate sheets, they must somehow gain a better
understanding of country codes and city codes. Otherwise the
same code representing fixed-line destinations in one place
could be deemed mobile terminations in another. If they don't
grasp the nuances, carriers could end up terminating more
mobile traffic than fixed-line, which could lead to huge
losses, as fixed is much cheaper to handle than mobile. For
that reason, comprehensive and accurate data in dial strings
are necessary for operators to negotiate with other operators
from a position of strength.
More attention needs to
be paid to routing features, quality and coverage in assessing
dial plans and wholesale partners. "Because so many of the new
mobile licenses are being doled out in developing countries,"
says Bois, "so much more diligence is needed at the inception
of contracts." Least-cost routing is only half the equation
now, he says, since balancing quality with cost is now a
determining factor in interconnect. "In this deregulated
world, you just work on setting yourself apart by
concentrating on quality-doing whatever you must to provide
high-quality terminations to customers, complete roaming calls
for mobile customers, or provide CLI for traffic," says Bois.
He notes that guaranteeing quality sometimes depends on
tracking down a parent company to gain some assurance about
the actual coverage offered by a new company.
As
mobile becomes a bigger part of the interconnect puzzle, Bois
says, cherry picking becomes more prevalent. "We know some
partners want to avoid international tariffs, so we're more
aggressive about finding the traffic that could be
manipulated," he says. Sprint has deployed a network quality
team to evaluate its partners' features and quality. Testing
is done through COTS and homegrown systems designed to ensure
that suppliers provide the quality Sprint expects.
"It's protocol now," Bois explains, "that all
agreements signed by partners contain a very clear declaration
that they are committing to certain levels of service quality
and/or roaming capabilities, such as relaying the CLI to the
end user, after which time we monitor the quality and test the
route to make sure we got the CLI completion and roaming we
expected."
BellSouth is another carrier that has made
some substantial changes. "We noticed the nimbleness and
flexibility of the smaller companies to which we sent mobile
traffic, as we answered to the increased interest in CLI and
guaranteed roaming," says Leslie McGill, senior manager for
carrier relations at BellSouth. "We wanted to improve views
into its digits and how routing occurs in its switches so we'd
have a baseline by country code, city code and mobile code for
our wholesale negotiations. We wanted to closely evaluate
those partners who own their own switches and baseline of
routes, so we could merge the views of our network and theirs
to better grasp costs for each set of digits."
BellSouth has been working with a third-party vendor
it chooses not to name to analyze carrier agreements, rates
and digits. "We bring traffic into the mix and get
consolidated views of average call duration and ASRs," says
McGill. "We have integrated the third-party solution with our
own to analyze CDRs and vendor digits about how calls are
routed and rated." Automating has given BellSouth the strength
to negotiate and file disputes. "Where some companies have to
evaluate if it's worth the effort," says McGill, "we now go
ahead and fight for what we believe we are owed or what we
owe."
AUTOMATING MANUAL PROCESSES
The reason VoIP and other traffic sometimes passes
surreptitiously is in large part that antiquated systems are
still used to record traffic. To thrive rather than get lost
in the shuffle, carriers will not only have to be creative in
their wholesale agreements to turn a profit, but invest in
technology to automate manual processes. 
It's amazing that the very same systems
still exist that were used back when interconnect agreements
were based on mutual traffic volume exchanges at fixed rates
among telecom monopolies. The day is approaching where
spreadsheets and faxes can no longer be used as the sole means
to approximate cost for next-gen services. With such services,
as many as 5,000 or 25,000 rows of data can exist on Excel
spreadsheets. Deciphering dial codes relating to tariffs on
spreadsheets inevitably leads to data errors.
Such
errors heighten the risk of substantial losses. "If you hand
off to a carrier who hauls your traffic, the difference
between loading a dial code and terminating traffic deemed
'local' as opposed to 'mobile' could mean the difference of
being charged 15 cents versus 2 cents per minute in tariffs,"
says Vibrant's Gary McIntyre, director of business
intelligence product management. That price differential is
compelling enough for some wholesale partners to engage in
deceptive practices.
Deceptive or legitimate, dynamic
changes to dial codes have become frequent enough that errors
abound.
"Additionally, there are language and cultural
issues, as well as lack of standardized codes representing
countries or metro areas within those countries," adds
McIntyre.
Unfortunately, it would be nearly impossible
for a governing body to standardize codes, as the carriers and
cost structures are too numerous, and the data volumes too
great, for such an effort to have much impact.
Consequently, a migration is occurring away from
traditional bilateral and ITU transit methods (the E.164
standard) toward aggressive business practices that blur the
clarity with which carriers can view terminating traffic.
"International interconnect has grown leaps and bounds
from traditional ITU models, which were 'declaration-based' so
that originating parties were declared to terminating
parties," says Intec's Neil Griffin, senior wholesale solution
consultant. Waiting for declarations could take months or
years. "Not only does that impact your understanding of
margins," he says, "but it impacts your compliance [with]
Sarbanes-Oxley and other regulatory changes that mandate a
clear understanding of revenues and costs."
Because
the ITU model doesn't lend itself to financial reporting and
understanding the health of businesses, carriers are starting
to make strides toward automation.
switches and
routing tables," says Vibrant's McIntyre. "The other option is
to take the Excel spreadsheet and upload it to a database that
then updates the switch on a daily, weekly or monthly basis."
Those millions of records are the key inhibitor to
major automation efforts.
SO MUCH DATA, SO
LITTLE TIME
Just how much data do Tier 1s
need to process? Millions of CDRs (call detail records) in
hours rather than days is becoming the expectation. For
example, Global Crossing UK has reported it processes 190
million CDRs in 17 hours with its Azure interconnect
solutions. The ability to process that much data gives
carriers an opportunity to do granular analysis of all calls.
"Whether lines are used for individuals or
enterprises, there is usually a known subset of regularly
called numbers. Anything deviating from that pattern can be
fingerprinted as a random pattern, and a profile can be built
so that warning signs are noticed and addressed," says John
Brooks, senior principal with Azure Solutions. He notes that
the company's interconnect "off switch" system processes
itemized CDRs for each interconnect call passing between a
carrier's network and that of its interconnect partners. "The
CDRs are produced at switches and passed via mediation to
Azure Interconnect, where they are streamed, charged, priced,
summarized and stored," says Brooks.
Azure also offers
fraud systems to evaluate high-use numbers and corresponding
patterns inbound and outbound in given regions. "With the
onslaught of Skype, the days are numbered for interconnect as
we know it today," Brooks says. "It's inevitable that
interconnect is on a timeline to disintegrate, as more traffic
is sent over the Internet."
Telarix customers have
reported similar capabilities, as Telarix processes calls on
an individual basis so that calls are rated based on each
partner carrier's numbering plan. Its "vendor-specific
rating," or VSR, is meant to further enhance CDR processing.
"We are hoping to achieve such scalability with the Telarix
cost management tools, which will be used to analyze dial
plans from multiple wholesale partners," says Sprint's Bois.
"Coupled with internal settlement and billing systems, we will
be able to process huge amounts of CDRs to track call
originations, terminations and durations."
CDR
processing, in fact, is the core capability of a BT competitor
that originally seemed too small to be a threat. "We're keen
on optimizing our rates and maintaining fixed-line rates, as
that is the differentiator between us and British Telecom-our
main competitor," says David Parfett, head of relational
technologies with the Carphone Warehouse's Center of
Excellence.
CPW has managed to become Europe's leading
independent retailer of mobile phones and services, with more
than 1,400 stores in 10 countries, as well garnering more than
2 million fixed-line customers in the United Kingdom after
only four years, making it the second largest behind BT. That
has translated into £ 2.3 billionin revenues for the company.
Its MobileWorld product relies on the company's ability to
undercut the competition's prices, as it promises very cheap
international roaming to a niche of customers.
Parfett
attributes the growth to Netezza Performance Server, a
purpose- built data warehouse appliance on top of which
application servers sit. The NPS consists of database
management software, storage and hardware that come together
to handle terabytes of detailed data at lower costs than some
of the systems offered by traditional players. In fact, there
are myriad innovative solutions for measuring quality,
automating testing of call completion, roaming and CLIs, as
well as analyzing processing of either event-based CDRs (also
known as single CDR) or aggregated CDRs.
New
engines and mechanisms focus on processing power and speed, so
that carriers can manage hundreds of partnerships-each of
which will possess hundreds of lines of dial codes, discounts
and revenue sharing agreements.
Traditional least-cost
routing solutions break when it comes to handling such large
volumes of data. That's why "gentlemen's agreements"-where
carriers trust their partners, or split the difference when
they don't-have become so prevalent.
According to
Accenture's Ramarao, between 4 and 15 percent of revenue is
always under dispute. "The goal should be to minimize the
amount of time dedicated to disputes. You can't let it drag on
for years," he says.
"We've seen cases where companies
write off as much as 8 million minutes a month because they
couldn't figure out how to bill their partners," says Geoff
Ibbett, revenue assurance product manager for Azure's Certo
revenue assurance platform.
"There are numerous points
in the billing chain where data has to be gathered, such as
copies of switch files and copies of billing tables. From that
data, control totals [KPIs] are generated and business rules
applied to identify international traffic," explains Ibbett.
"You run a rule to get aggregate control totals about how many
millions of minutes were used on a network, and then you break
down calls from certain countries or dial strings within
countries, when there is a discrepancy between the billing
data and what was on the network."
The more granular
the dial strings, the better the chance of finding the reasons
for discrepancies. "If you have a U.K. operator code of 44,"
Ibbett says, "it's possible all traffic into that country code
[is] charged the same rate-even if there is a dial string that
includes a 7, which denotes a mobile call terminating in the
U.K." In this way, carriers lose out on recognizing higher
charges for mobile terminations, because they are not
exploiting all the information they can from dial strings.
To squeeze out that kind of information, however,
carriers have to analyze hundreds of millions of minutes
reflected in CDRs.
The ability to handle millions of
rows of data falls into two camps: aggregate-event processing
architectures, or event-based CDR processing architectures.
TWO SCHOOLS OF THOUGHT
There
is some dispute over whether aggregate approaches offer the
same benefits as single-event processing, sans the overhead
required to process CDRs individually and with additional
processing power requirements. Some believe that aggregation
expedites rating performance of the processing systems more
than is possible with individual CDR processing systems. In
other words, the processing of aggregated CDRs is said to
happen in near-real time.
However, aggregated CDR
processing can sometimes miss details about subminute
increments, initiation and termination figures, as well as the
number of networks traversed-all critical to managing
intercarrier disputes. "The continued use of blended rates
during CDR rating processes increases the processing time, but
not necessarily the accuracy," says Telarix's Kiriacos. In his
view, accepting blends causes carriers to get burned on
resultant assumptions. Telarix's product is built on the
concept of event-based processing of individual CDRs.
"To manage calling rate plans, or to find the optimal
yield for calling plans, or to analyze how traffic is routed,
carriers really need to look at detailed info rather than
aggregated information, because they lose the nuance
information needed to manage the business," says Phil
Francisco, director of product marketing for Netezza. "The
distribution curves are not truly understood with aggregates.
You get an average, rather than the worst offenders or best
customers. If you don't want your high-profile customers to
churn, you can't just look at averages. Similarly, in billing
reconciliation, you want to see the best and worst revenue
leaks in a revenue assurance model, as well as how you were
billed and for what."
Unlike the more traditional
aggregatezevent processing, event-based CDR processing for
interconnect business optimization (IBO) is becoming more
compelling. The reason is that it enables operators to quickly
process huge volumes of call transactions so that rating
determines the true revenue and cost of interconnect traffic
for identifying higher- margin routes.
With
event-based CDR processing, dedicated servers receive raw CDR
information from mediation systems. These high-volume servers
are necessary, as international calls now generate between
five and 10 CDRs per call, rather than the two or three that
used to be generated. As CDRs are validated on the basis of
price and cost, they are loaded into a relational database for
further processing and reporting.
"The faster you can
process the CDRs, the better your ability to monitor
profitability, quality and costs on a daily or hourly basis,"
Kiriacos says. "Operators are realizing that it's usually a
small, isolated incident that goes unnoticed and spirals into
weeks of margin eroding. They are better off stopping it early
on."
Additionally, the fast turnaround of information
enables network managers to make better international
interconnect decisions based on QoS, capacity and cost.
Besides software that looks at CDRs, carriers also need to
look at their hardware.
"Carriers haven't had
visibility into inbound and outbound traffic," says Brooks.
"They have to be able to capture 100 percent of their data on
thousands or tens of thousands of trunks; otherwise, they spin
their wheels dealing with all the accuracy checks." That means
carriers need revenue assurance solutions that look at
hardware and asset-based errors.
"Often, trunks are
de-provisioned but they go unnoticed in environments with
thousands of trunks. Even if just 5 percent are not recording
properly, because a circuit was shut off for maintenance or
something, you end up with an inaccurate picture of what you
are carrying on your network," notes Brooks. "Conversely, you
might be unwittingly terminating traffic for other carriers
who are sending traffic for free over those trunks."
Even in cases where data about trunks is intact,
information about what traffic is terminating to a network can
be false. "If you think your traffic is being carried from one
destination directly, but the wholesale partner actually puts
it over four hops, you may get hit with different termination
rates than you thought," Brooks says.
Another area of
weakness is that in many cases zero-duration calls are
terminated but not charged for. "Sometimes operators purposely
exploit an appliance they know isn't being tracked properly
because filters are removing certain calls," says Azure's
Ibbett. "We've seen a case where a certain company's engineer
was hired by an interconnect partner because he knew of a
faulty switch that was filtering out zero-duration calls. It's
not illegal, but you don't want companies capitalizing on
those weaknesses."
The key again is accuracy of data,
so that origination, duration and termination of all calls are
known. And that goes back to the ability to record and process
prodigious amounts of data.
For these reasons, it is
expected that carriers will continue to adopt modules or
suites capable of handling very large data volumes, so that
they can create reports containing detailed information about
delivery costs, quality and routing decisions and disseminate
that information to key people much faster. |
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