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Least Cost Routing in Inter-Carrier Context.

Conference Paper · November 2006

DOI: 10.1109/GLOCOM.2006.243 · Source: DBLP

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 Least Cost Routing in Inter-Carrier Context
Piotr Chołda, Mirosław Kantor, Andrzej Jajszczyk, Krzysztof Wajda
Department of Telecommunications, AGH University of Science and Technology
30-059 Kraków, Poland, Telephone: (+48 12) 617–35–38, Fax: (+48 12) 634–23–72
E-mails:{cholda,kantor,jajszczyk,wajda}@kt.agh.edu.pl
Abstract— Carriers conveying long-distance traffic face differ-
ent routing options with regard to service quality and cost. Thus,
Least Cost Routing (LCR) solutions supporting optimal decisions
become a very important issue in the inter-carrier operations.
In this paper, we present this problem in the context of the
long-distance traffic partner-carrier choice. The mathematical
optimization problem is formulated. Especially, constraints (e.g.,
capacity, volume) related to the techniques used are considered.
Different tariffs formulations are taken into account as well.
Then, the methods to find the optimal and sub-optimal solutions
are elaborated.
I. I NTRODUCTION
Telecommunications industry is a very demanding market
where the competition is still increasing. In such circumstances
carriers and service providers still wanting to operate on
this market have to look for ways for increasing revenues
and reducing operating costs. Due to the development of
new advanced technologies, as well as the fast growth and
expanding of the Internet, the importance of interconnection
issues is still increasing. It is important especially in case the
networks want to offer really global end-to-end services for
their customers. In order to offer these services carriers build
and diversify interconnect partner relationships for extending
the geographical coverage [1].
However, the increase in the network connectivity causes
that operators face with numerous routing alternatives. More-
over, frequent changes in tariff plans, which are complex and
use highly granular tariff models, are a characteristic feature
of this market. Mentioned above market characteristics and
the fast growth in voice and data traffic are the reasons, that
carriers wanting effectively operate on that market can no
longer base on both slow and costly manual processes to
arrange call routing models, as the results of such operations
in all probability would not be optimal.
The telecommunications market is simply very dynamic. In
order to keep up with changes, routing reconfigurations are
required in shorter timeframes. On the other hand, operators
would like to have the certainty that calls on their network
are realized according to the lowest cost route in order to
maximize their income. Therefore, flexibility in the provision-
ing and configuring systems is crucial to support both rapid
service introduction and quick adjustment of routing models.
Inefficiencies in implementing routing strategies can decrease
carriers income, worsen network performance, and miss busi-
ness opportunities as well as make them waste time. As the
number of alternatives is increasing, the need for developing
algorithms supporting the choice of optimal routes becomes
crucial. In this paper we introduce the concept of Least Cost
Routing (LCR) solution, which helps to optimize connections
between telecommunication operators by minimizing costs for
served demands and maximizing the operators income, as
well as an efficient use of the existing network infrastructure.
By using LCR algorithms the routing strategy can be more
efficiently executed as the call traffic is sent through the most
efficient and economical means.
Using operators pricing lists, network configuration, traffic
history as the input the optimization program as well as the
heuristic algorithm implemented for LCR finds automatically
the optimal route configuration for interconnect traffic. It is
executed by assignment the most suitable operators points of
interconnection for particular traffic directions and termination
points.
To find the best routes, highly complex criteria based
not only on network-based indicators, but also considering
operator’s preferences can be taken into account. The most
important parameter is the cost for terminating connections
(given in tariffs as the price per time unit). Quality of service of
offered interconnection (not considered in our formulation) can
be also taken into account when calculating the optimal route.
Configured by operator preferences for particular directions,
as well as time-based rules are taken into consideration by the
developed algorithm.
As the result of LCR functionalities the operator receives
a network configuration proposition that, when accepting by
system administrator, can be used by the management systems
for reconfiguring the network.
The LCR algorithm can also shorten the time needed for
analysis a huge number of alternatives and help a carrier in
taking supporting decisions considering new agreements with
other carriers.
The planning of least-cost routing has at least the three
following goals:
1) find the least cost routing for a selected period of time
(typically: one month),
2) give suggestions related to agreement choices,
3) determine the traffic routing.
We have to remember that we need credible statistical data
describing the total traffic related to the period of time for
which the planning is made. Nevertheless, in this paper, we
assume that such statistics are provided.
 II. M ATHEMATICAL M ODEL : M IXED I NTEGER
P ROGRAMMING F ORMULATION
There are very few papers dealing with lowest-cost routing.
However, some issues related to inter-carrier relations have
been modeled [2], [3].

A. General Form
The proposed mathematical model concerns most of all
tariffs. A tariff defines the general structure of prices and
charges, where charge is considered as the amount of money
for realized service [1]. A specific tariff model is composed
of two elements [4]:
• price: monetary component associated with a unit of
service;
• tariff connected with particular tariff model: calculation
scheme, including charging function which enables the
calculation of costs with reference to charging variables
(e.g. time of usage, volume transferred, allocated band- Fig. 1. Timebands calculation method.
width), and charging coefficients (e.g. price per suitable
unit)..
In literature a huge number of tariff models have been indices
suggested for telecommunication services [5]. These models d = 1, 2, . . . , D directions (each direction is related to
can be classified in three groups [4]: linear tariff models, non- one selected prefix)
linear tariff models and discounts. p = 1, 2, . . . , P partners
In the linear tariffs the price per defined unit of usage t = 1, 2, . . . , Tp partner p tariffs
is equal for all units. The charge for a service is directly e = 1, 2, . . . , E possible timebands
Timebands could be found on the basis of the following
proportional to the number of used units.
methodology: we have to find all time points when any
In the case of non-linear tariffs [6] there is no proportion
partner’s tariffs changes and then we have to take the smallest
between the total cost and the number of used units. Different
set containing such selected time points (see Fig 1).
prices can be assigned per used units. The most popular
constants
and simplest non-linear tariff is flat rate [7]. Under a flat hde > 0 number of minutes that must be carried for
pricing scheme the user is charged a fixed amount per time, direction d in timeband E
irrespective of usage. zpte ≥ 0 maximum number of minutes that can be
To be distinct operators create also more sophisticated tariff- carried in tariff t of partner p in timeband E
models by mixing linear and non-linear tariff models. An Parameter zpte could be related for instance to the used
example of such a combined model is the two-part tariff model interface capacity.
which consists of two elements [4]: a fixed subscription fee continuous variables
for a certain period of time (monthly fee) and per-unit charge. xdpte ≥ 0 number of minutes carried by p in its tariff t
Two-part tariffs are present in interconnection domain in a for direction d in timeband e
number of ways, as interconnection charges are very often xpte ≥ 0 number of minutes transferred into all direc-
composed of a call initial charge and a per minute charge [8]. tions d which are carried by p in its tariff t in
In order to differentiate themselves the carriers also intro- timeband e
duce timebands, i.e., different time units, for which prices were δp ≥ 0 total cost input related to partner p
defined. These different time intervals are known as peak-on In the linear program we deal only with those variables xdpt
and peak-off intervals with different prices related to these which are related to directions d that can be served by tariffs t
intervals [9]. of partners p. Other variables, i.e., related to directions d that
To decrease the charge for the customer a special type of cannot be supported by tariffs t of partner p are not taken into
tariff model called discount (called here global promotions) account (we can say that in such a case: xdpt ≡ 0).
is used. In case of this model total costs for realized service constraints
P P
are decreased. Discounts are used together with applied tariff xdpte = hde d = 1, 2, . . . , D e = 1, 2, . . . , E (1)
models and cause reduction of total charge or price per unit Pp t
d xdpte = xpte p = 1, 2, . . . , P t = 1, 2, . . . , Tp
when e.g., the total traffic per given operator exceeds agreed
e = 1, 2, . . . , E (2)
threshold.
Below, the general optimization model is presented. xpte ≤ zpte p = 1, 2, . . . , P t = 1, 2, . . . , Tp
e = 1, 2, . . . , E (3)
 (a) Unit (marginal) cost (b) Volume cost (a) Unit (marginal) cost (b) Volume cost

Fig. 2. Cost structure in a linear tariff. Fig. 3. Cost structure in a tariff with opening cost.

Each equality of the group given in Eq. (1) is necessary to 2) Tariff with Opening Cost: Tariff with an opening cost
assure that the whole volume of traffic for the selected period (Fig. 3) is similar to the one described above, but involves an
B
of planning time is carried for direction d. The second group opening fee for opening the tariff (vpt ). Then, the marginal
B
of constraints (Eq. (2)) determines the total traffic carried by cost is analogously flat (cpt ) with no steps. Such a tariff can
the selected tariff t of partner p. The introduced limitations on also represent a lump sum tariff if a marginal cost equals 0
interfaces related to each tariff t of partner p are met according (cB
pt ≡ 0). The model is as follows:
to inequalities described by Eq. (3). The inequality of such a additional indices
form can be also related to the economical constraint which t = 1, 2, . . . , TpB partner p tariffs with opening cost
says that for some agreement reasons only zpt minutes can be additional constants
carried by the selected tariff t of partner p. vpt > 0 opening cost of tariff t = 1, 2, . . . , TpB with
goal function P opening cost of partner p
minimize p δp cB
pte ≥ 0 marginal cost of one minute transfer in tariff
The factor δp is explained below. Now, we can say that it t with opening cost (t ∈ TBp ) of partner p in
expresses the cost of the total traffic carried in such a tariff. timeband e
additional continuous variables
γpte ≥ 0 total cost input related to tariff t =
B. Tariffs
1, 2, . . . , TpB of partner p in timeband e
Each tariff characteristic is presented in a figure in a form additional binary variables
of two descriptions: bpt ∈ {0, 1} = 1 if traffic is sent through tariff t =
• in the first one, the unit cost is presented; if it changes on 1, 2, . . . , TpB ; 0, otherwise
the basis of volume carried in the selected tariff, the unit additional constraints
cost can decrease or increase (however, for simplicity, P P
e xpte ≤ e zpte bpt
we show in Fig. 4-5 as if all unit costs decreased); our
p = 1, 2, . . . , P tB = 1, 2, . . . , TBp (5)
formulation is general and takes into consideration all
vpt bpt
possible changes; E + cB
pte xpte = γpte
• in the second one, the cost that should be paid for the p = 1, 2, . . . , P t = 1, 2, . . . , TpB e = 1, 2, . . . , E (6)
total volume of data (minutes, traffic) is given.
1) Linear Tariff: In the linear (flat cost) traffic type the Constraints of the form of Eq. (5) are responsible for the
total cost is calculated as a linear function of volume. There fact that bpte is set to 1 if xpte > 0. Otherwise, it is set to
is no beginning cost. The structure of the cost related to such 0, as such a case is allowable by these constraints and the
a simplest tariff is shown in Fig. 2. optimum solution strive for the minimal value and from such
additional indices a standpoint bpte = 0 is a better value.
t = 1, 2, . . . , TpL partner p linear tariffs 3) Step Tariff: When a step tariff (Fig. 4) is taken into
additional constants account, the marginal cost changes when some thresholds are
cLpte marginal cost of one minute transfer in the linear exceeded. The new cost is related only to the amount of
tariff t = 1, 2, . . . , TpL of partner p in timeband e minutes which exceed thresholds.
additional continuous variables
γpte ≥ 0 total cost input related to tariff t = additional indices
t = 1, 2, . . . , TpS partner p tariffs with step marginal
1, 2, . . . , TpL of partner p in timeband e
additional constraints costs
S
n = 1, 2, . . . , Npte number of different marginal costs in
cL
pte xpte = γpte p = 1, 2, . . . , P t = 1, 2, . . . , TpL step tariff t = 1, 2, . . . , TpS of partner
e = 1, 2, . . . , E S
(4) p in timeband e (there are Npte −1
thresholds in such a tariff)
 (a) Unit (marginal) cost (b) Volume cost (a) Unit (marginal) cost (b) Volume cost

Fig. 4. Cost structure in a step tariff. Fig. 5. Cost structure in a total volume tariff.

additional constants
snpte > sn−1
pt
S
nth (n = 1, 2, . . . , Npte − 1) threshold in p = 1, 2, . . . , P t = 1, 2, . . . , TpS (12)
step tariff t = 1, 2, . . . , TpS of partner p in e = 1, 2, . . . , E n= S
1, 2, . . . , Npte
timeband e P Sn n
n cpte xpte = γpte
s0pte = 0 auxiliary constant
NS p = 1, 2, . . . , P t = 1, 2, . . . , TpS (13)
sptepte = zpte auxiliary constant
e = 1, 2, . . . , E
cSpte
n
≥0 marginal cost of minutes in the range (n −
1; n] in step tariff t = 1, 2, . . . , TpS of
partner p in timeband e Both groups of constraints given by Eqs. (7)-(8) are re-
u0pte = 1 auxiliary constant sponsible for the fact that uSpte
n
is set to 1 if xpte > sSpte
n
and
additional continuous variables
xnpte ≥ 0 values into whose set the whole number of otherwise it is set to 0.
minutes xpte carried by p in tariff t = 4) Total Volume Tariff: The total volume traffic tariff
1, 2, . . . , TpS is partitioned (Fig. 5) is similar to the step tariff in this sense that the
γpte ≥ 0 total cost input related to tariff t = marginal costs change when thresholds are exceeded. The
1, 2, . . . , TpS of partner p in timeband e difference lays in the fact that for the whole minutes carried
We are interested in such a partitioning in which if xpte = in such a tariff only one unit cost is used at once, i.e., the cost
skpte +ε < sk+1 i i k
pet , k < n, then: xpte = spte , i < k and xpte = ε; related to the highest exceeded threshold.
see Eqs. (9-12). additional indices
additional binary variables t = 1, 2, . . . , TpV partner p total volume tariffs
unpte ∈ {0, 1} = 1 if xpte > snpt (t = 1, 2, . . . , TpB ); 0, V
S n = 1, 2, . . . , Npte number of different marginal costs
otherwise; n = 1, 2, . . . , Npte −1
in volume tariff t = 1, 2, . . . , TpV of
additional constraints V
partner p (there are Npte − 1 thresh-
xpte − snpte ≤ zpte unpte
olds in such a tariff)
p = 1, 2, . . . , P t = 1, 2, . . . , TpS (7) additional constants
S n n−1 V
e = 1, 2, . . . , E n = 1, 2, . . . , Npte −1 qpte > qpte nth (n = 1, 2, . . . , Npte − 1) threshold in
snpte − xpte ≤ zpte (1 − unpte ) step tariff t = 1, 2, . . . , TpV of partner p in
timeband e
p = 1, 2, . . . , P t = 1, 2, . . . , TpS (8) Vn
cpte ≥ 0 marginal cost of all minutes if the whole
S
e = 1, 2, . . . , E n= 1, 2, . . . , Npte −1 number of minutes exceeds threshold qpte n
P n V
n xpte = xpte in volume tariff t = 1, 2, . . . , Tp of partner
p = 1, 2, . . . , P t = 1, 2, . . . , TpS (9) p in timeband e
NV
e = 1, 2, . . . , E wptepte = 0 auxiliary constant
xnpte − (snpte − sn−1 n n−1 n additional continuous variables
pte ) ≤ (spte − spte )upte n
ypte ≥ 0 auxiliary variable related to the number of
p = 1, 2, . . . , P t = 1, 2, . . . , TpS (10) minutes transferred by t = 1, 2, . . . , TpS of
S
e = 1, 2, . . . , E n = 1, 2, . . . , Npte −1 partner p in timeband e
n−1 n−1
(spte − spte ) − xpte ≤ (spte − spte )(1 − unpte )
n n n γpte ≥ 0 total cost input related to tariff t =
1, 2, . . . , TpV of partner p in timeband e
p = 1, 2, . . . , P t = 1, 2, . . . , TpS (11)
additional binary variables
S
e = 1, 2, . . . , E n = 1, 2, . . . , Npte −1 n
wpte ∈ {0, 1} = 1 if xpte > qpte n
(t = 1, 2, . . . , TpV );
n−1 n−1
xnpte ≤ (snpte − spte )upte V
0, otherwise; n = 1, 2, . . . , Npte −1
additional constraints
View publication stats C. Model: Comment
n n
xpte − qpte ≤ zpte wpte Generally, we must remember that the following set of
p = 1, 2, . . . , P t = 1, 2, . . . , TpV (14) general equations related to indices is expressed as follows:
V
e = 1, 2, . . . , E n = 1, 2, . . . , Npte −1
n n ∀p Tp = TpL ∪ TpB ∪ TpS ∪ TpV (25)
qpte − xpte ≤ zpte (1 − wpte )
p = 1, 2, . . . , P t = 1, 2, . . . , TpV (15) Obviously, different tariffs can be further combined (e.g.,
V
the step tariff with the tariff using the opening cost) or
e = 1, 2, . . . , E n = 1, 2, . . . , Npte −1 complicated (e.g., in a global tariff only a subset of minutes
P n
n ypte = xpte is taken into account or the structure of the global tariff
p = 1, 2, . . . , P t = 1, 2, . . . , TpV (16) is step-based, etc.). We present quite simple and commonly
used tariffs. Too complex tariffs would only make the paper
e = 1, 2, . . . , E
n n n+1
unnecessary unclear and does not add any new value.
ypte ≤ zpte (wpte − wpte ) Our formulation is based on Mixed-Integer Programming
p = 1, 2, . . . , P t = 1, 2, . . . , TpV (17) (MIP). In the general case, the solution of such a problem
e = 1, 2, . . . , E n= V
1, 2, . . . , Npte −1 could be very hard, especially if the number of engaged
P Vn n
discrete (here: binary) variables is large. However, we checked
n cpte ypte = γpte that for problems of a real size (e.g., D = 300, P = 50 and
p = 1, 2, . . . , P t = 1, 2, . . . , TpV (18) the number of tariffs used by a partner up to 16), the problem
e = 1, 2, . . . , E can be solved quite fast by optimization engines like CPLEX
9.1 [10].
5) Global Promotion: The sense of a global promotion
is related to the offer made by a partner which wants to III. C ONCLUSION
encourage its clients to carry as much as possible minutes to In the paper, we present the first approach to the least-cost
different directions by its tariffs. Thus, it proposes to reduce routing in the inter-carrier long-distance accounting context.
the whole cost if the total number of minutes sent by its The mathematical optimization problem is formulated. Espe-
premises exceeds a selected threshold value. cially, we overview and model the typical tariffs used in the
additional constants inter-carrier operations.
mp number of percents by which the total cost related
to all minutes carried by partner p is reduced1 R EFERENCES
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