1B - How To Buy Better International Termination

HOW TO BUY BETTER INTERNATIONAL TERMINATION
AGENDA
n  Least Cost Routing
n  Routing tables
n  Quality issues
n  Organization
n  Risks
n  Incoming is also an issue : are you in control ?
www.clarity-conseil.com 2
THE BENEFIT OF THE WHOLESALE MARKET FOR BUYING
n  Prices competitiveness: improving the cost base
n  Negotiation leverage tool
n  Ability to attract traffic of regional operators and local competitors
n  HOWEVER, ACCESSING THE MARKET IS NOT SIMPLE:

n  Tools
n  Process
n  Risk control
ENTERING WHOLESALE MARKET
LCR (least Cost Route) Quality of service

implementation supervision
Buying on the
wholesale market
requests tools
Routing table flexibility
& implementation
and organization Dedicated organization
LEAST COST ROUTING - TOOLS
Simulation
DESTINATION (4000 split around) COUNTRY CODE AREA CODE ROUTE 1 ROUTE 2 ROUTE 3
Afghanistan 93
Afghanistan - Kabul 93 20 Worldcom BT IDT
Afghanistan - Mobile 93 70 Arbinet worldcom FT
Afghanistan - Mobile 93 79 Arbinet worldcom FT
Albania 355 T-Systems Teleglobe Rostelecom
Albania - Mobile 355 38 Rostelecom Band-X wavecrest
Albania - Mobile 355 68 Band-X Rostelecom wavecrest
Albania - Mobile 355 69 Band-X Rostelecom wavecrest
Albania - Tirana 355 4 WYStelecom IDT Sprint
Algeria 213 Algerie Telecom FT AT&T
Algeria - Algiers 213 21 M Link TXE Télécom Algerie télécom
Algeria - Mobile - Orascom 213 7 TXETélécom M Link Algerie télécom
Algeria - Mobile - Other 213 61 TXETélécom M Link France télécom
Algeria - Mobile - Other 213 62
Algeria - Mobile - Wataniya 213 50
Algeria - Oran 213 41
Andorra 376
Andorra - Mobile 376 3
Angola 244
Angola - Mobile 244 9
Anguilla 1264
Antarctica 672
Antigua & Barbuda 1268
Antigua & Barbuda - Mobile 1268 268
Extract : Build up LCR simulation from Clarity
LEAST COST ROUTING - PRINCIPLES
n  Interconnect with at least 4 “wholesalers”
n  Create a price data base (excel or access can make it)
n  Split in the data base within countries between at minimum mobile and fixed
terminations
n  Watch out the countries codes
n  Challenge your provider tariffs on a weekly basis
n  Follow up your traffic pattern on a weekly basis
ROUTING TABLE
n  The routing implemented in the international switches MUST be the same than the
Least Cost Route maintained by the buying team
n  First route must be the best price
n  Same country codes must be implemented
n  Routes should be able to change on a daily basis
n  Routing changes flexibility is the key for efficiency
NUMBERING PLAN
n  Numbering plan are evolving a lot and prices are

n  linked to destination numbers,
n  not to destination names
n  In the old time, a destination was a country
n  Now it is
n  A network
n  A sub network
n  A service
n  Their is no single entity in charge of numbering plan management

n  They are several numbering plan
n  Prices linked to destination number vary a lot
NUMBERING PLAN
+33
Fixe Other networks Other networks using

+33 9 geographical numbers
Orange
+33 6 X
France
Mobile SFR
+33 +33 6 +33 6 Y
Bouygues
+33 6 Z
VAS
+33 8 FreePhone
+33 800
Premium
+33 8X
QUALITY SUPERVISION
n  Wholesale market aggressive pricing is sometime based on poor quality

n  Compression
n  Equipment's inter-working abilities (especially when using VOIP)
n  Local termination (gray market especially)
n  Quality supervision is critical especially for operators which revenue derives from
retail based customers
n  Quality criteria must be supervised:

n  ASRs
n  CLI transmission (especially for mobile operators)
n  PDD
n  Audio quality
PRICE ISN’T ALL - WHAT ABOUT QUALITY
n  What if all is routed on pure LCR
n  No CLI n  No Callback + Less Completed calls
n  Less messages left on Voice mail
n  No Roaming n  Roamers IN not reacheable
n  Low ASR n  Less Completed calls

n  Shorter calls
n  Shorter calls

n  More call attemps
n  Customers unhappy
n  Network saturation
CAPACITY
n  To deliver traffic capacity is requested, lack of capacity means

n  Overflow not managed
n  No control on cost
n  Incoming traffic could be affected
QUALITY FINANCIAL IMPACT
n  Quality should be considerer. Quality has a prices

n  BCR, "best cost routing" versus LCR "least cost routing »
Call
Call attemps ASR Retry Volume Cost Margin
Profil duration
Coût 1 000
Best Cost Routing 0,35 800 60% 50% 2,50 ' 2 000 ' 700 900
Least Cost Routing 0,30 650 30% 50% 2,00 ' 1 300 ' 390 650
Optimum 0,30 1 000 100% 2,50 ' 2 500 ' 750 1 250
n  Provider having low quality to certain destination should be replaced, or managed
n  Trouble tickets should then be opened and followed
Public rate ex VAT 0,80 Profit or lost 250
ROUTE OPTIMIZATION
Route Optimization Model
Destination ASRs Business Rules

Traffic Volumes Benchmarks
Network Usage ASR th r esh olds
Network Capacit y Margin th resh olds Manual Overrides
Exchange Rates % R outing System Overrides
Inte r connect Costs Number Of R outes
Service Quality Manual e xclusions
Volume A g r eements System E xclusions
Mon itor Analyze Reconfigu r e

Operating Business Network
Envi r onment Impact Routing
Updated Least Cost
Performance Routing
Indicators Requests
PROCESS - CONTROL
Main sources of mistake
n  Tariffs and numbering plan importation

n  Manual input, as received by fax
n  Importation process unclear
n  Information not transmitted internally

n  Invoicing / dispute department not aware of change that happened on tariffs or destination
numbers
n  Modification date not communicated
•  Wrong invoices, inefficient disputes
n  Routing order not well implemented

n  Facing technical problems / quality issues, traffic has been rerouted
n  Delivery cost is higher than expected
DEDICATED ORGANIZATIONS
Wholesale
Dpt
TECHNICAL
BUYING IMPLEMENTATION
Buying / Trading team Technical team Finance IT
Building LCR Of Routing
Tables
STATS Buyers or Intercon- Invoicing Stat tool
Traffic traders nection validation maintenance
pattern LCR manager Routing table Disputes
Quality implemen-
tation
Follow up
supervision Quality
supervision/
testing
FINANCE
Invoice
Follow up
Disputes
ORGANIZATION DEPENDS OF THE GOAL TO REACH
n  Several kind of of organization are possible
n  Dedicated to trading and arbitrage

•  Main criteria
•  Volume
•  Profitability - The bottom line
•  Customers are only other operators and wholesalers
n  Buying organization supporting national retail business

•  Main criteria
•  Outgoing cost optimization
•  Quality supervision
•  Incoming traffic preservation
•  Main customers being either “captive” operators having their retail customers or the
internal retail division
n  Mix of both

•  Support national business
•  Own objectives of business development
ORGANISATION
n  What ever organization you have, in order to be efficient
n  Strategy defined and accepted by all

•  Common objective and goal to reach
n  Process easy to understand

•  Written and documented,..
•  Approved by all
•  Especially by network team, if they work as well on national issues
n  Tools need to be implemented

•  Database
•  Even if it’s possible to work with Excel
n  CDR used at every level
RISKS
n  QUALITY
n  RATES VARIATION
n  SPLITS with big rates differentiation
With an adequate organization buying on the wholesale market presents

greater incentives than risks
Entering the wholesale market for selling purposes (becoming a hub) also
presents great incentives but request a very solid organization and
developed tools especially to handle associated risks
n  Trading opportunities from buyers based on rates mistakes

n  Trading opportunities from buyers based on splits missing or inadequate country
codes updates
n  Technical limitation in routings and Stat tools
n  Disputes
CONCLUSION ON BUYING
Value Scale
Revenue
sources
Wholesale Market used

AS for TRADING
Wholesale market used

AS A BUYING FUNCTION
Buying Optimization
Wholesale Market used

FOR BENCHMARKING AND BUYING IMPROVEMENTS
WHAT ABOUT INCOMING ?
n  Receiving international incoming is also very important
n  Incoming test calls are crucial

n  To fight against SIM boxes
n  To fight against fake termination
CONTROL OF VOICE TERMINATION
CONTROL OF SMS TERMINATION
CONTROL OF ROAMING
THANKS FOR YOUR ATTENTION
Claire Audin
Partner
+33 6 63 31 60 41
claire.audin@clarity-conseil.com

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HOW TO BUY BETTER INTERNATIONAL TERMINATION

n Least Cost Routing

n Routing tables

n Quality issues

n Incoming is also an issue : are you in control ?

n Prices competitiveness: improving the cost base

n Negotiation leverage tool

n Ability to attract traffic of regional operators and local competitors

n HOWEVER, ACCESSING THE MARKET IS NOT SIMPLE:

LCR (least Cost Route) Quality of service

Extract : Build up LCR simulation from Clarity

n Interconnect with at least 4 “wholesalers”

n Watch out the countries codes

n Challenge your provider tariffs on a weekly basis

n Follow up your traffic pattern on a weekly basis

n First route must be the best price

n Same country codes must be implemented

n Routes should be able to change on a daily basis

n Routing changes flexibility is the key for efficiency

n Numbering plan are evolving a lot and prices are

n In the old time, a destination was a country

n Their is no single entity in charge of numbering plan management

Fixe Other networks Other networks using

n Wholesale market aggressive pricing is sometime based on poor quality

n Quality criteria must be supervised:

n What if all is routed on pure LCR

n No CLI n No Callback + Less Completed calls

n Less messages left on Voice mail

n No Roaming n Roamers IN not reacheable

n Low ASR n Less Completed calls

n Shorter calls

n To deliver traffic capacity is requested, lack of capacity means

n Incoming traffic could be affected

n Quality should be considerer. Quality has a prices

Route Optimization Model

Destination ASRs Business Rules

Mon itor Analyze Reconfigu r e

Main sources of mistake

n Tariffs and numbering plan importation

n Information not transmitted internally

n Routing order not well implemented

n Several kind of of organization are possible

n Dedicated to trading and arbitrage

n Buying organization supporting national retail business

n Mix of both

n What ever organization you have, in order to be efficient

n Strategy defined and accepted by all

n Process easy to understand

n Tools need to be implemented

n CDR used at every level

With an adequate organization buying on the wholesale market presents

n Trading opportunities from buyers based on rates mistakes

Wholesale Market used

Wholesale market used

Wholesale Market used

n Receiving international incoming is also very important

n Incoming test calls are crucial

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n  Least Cost Routing

n  Routing tables

n  Quality issues

n  Incoming is also an issue : are you in control ?

n  Prices competitiveness: improving the cost base

n  Negotiation leverage tool

n  Ability to attract traffic of regional operators and local competitors

n  HOWEVER, ACCESSING THE MARKET IS NOT SIMPLE:

n  Interconnect with at least 4 “wholesalers”

n  Watch out the countries codes

n  Challenge your provider tariffs on a weekly basis

n  Follow up your traffic pattern on a weekly basis

n  First route must be the best price

n  Same country codes must be implemented

n  Routes should be able to change on a daily basis

n  Routing changes flexibility is the key for efficiency

n  Numbering plan are evolving a lot and prices are

n  In the old time, a destination was a country

n  Their is no single entity in charge of numbering plan management

n  Wholesale market aggressive pricing is sometime based on poor quality

n  Quality criteria must be supervised:

n  What if all is routed on pure LCR

n  No CLI n  No Callback + Less Completed calls

n  Less messages left on Voice mail

n  No Roaming n  Roamers IN not reacheable

n  Low ASR n  Less Completed calls

n  Shorter calls

n  To deliver traffic capacity is requested, lack of capacity means

n  Incoming traffic could be affected

n  Quality should be considerer. Quality has a prices

n  Tariffs and numbering plan importation

n  Information not transmitted internally

n  Routing order not well implemented

n  Several kind of of organization are possible

n  Dedicated to trading and arbitrage

n  Buying organization supporting national retail business

n  Mix of both

n  What ever organization you have, in order to be efficient

n  Strategy defined and accepted by all

n  Process easy to understand

n  Tools need to be implemented

n  CDR used at every level

n  Trading opportunities from buyers based on rates mistakes

n  Receiving international incoming is also very important

n  Incoming test calls are crucial