As the telecoms market continues to become more complex, particularly with the arrival of companies offering content and IP-based communications, operators are involved with a growing number of interconnect partnerships. Typically, they have to maintain anything between 100 to 2,000 voice agreements. It is imperative that they ensure each of these agreements is a profitable relationship. Whilst this may seem obvious, many operators are shackled by the constraints of existing business processes, and unable to match their growth plans with fast and accurate interconnect cycles. And if the operators’ intercarrier business is significant, they could be living on a knife-edge of bankruptcy in the face of intense competition.

In a climate of declining prices, with many operators focusing on increasing profit margins, carriers are looking to improve cash-flow management, streamline settlement cycles and reduce bad debt. While being able to accurately determine the nature of services provided and to reconcile data with the invoices and payments received from other carriers involved is essential, many do not pay sufficient attention to placing the processes of agreement management at the core of their billing architectures. The result is time and resources spent coping with high volumes and frequency of data and inefficient administration duties, only for the organization to miss out on commercial opportunities and be exposed to human error and financial risk.

Moreover, for some operators interconnect hasn’t received the senior management attention that it deserves. They often focus their revenue management activities on traditional retail services and neglect areas of agreement tracking, cost base analysis and margin management. Another common problem is to assume that discrete applications are capable of effectively supporting interconnect operations and enhancing margins, for example the process of inter-carrier agreement management is often under estimated and other departments and applications obtain greater focus. It is no longer enough for interconnect to be regarded as a back-office function or for professionals to spend hours wading through spreadsheets. Interconnect managers are supposed to be accurate and strategic. People expect more from them and they rightly expect more from their IT systems:

• The ability to manage interconnect on an end-to-end basis
• Streamline data entry and process management
• Manage flexible interconnect agreements proactively
• Improve communications between functions involved in inter-carrier relationships
• Manage time critical data and obtain an accurate view of costs
• Ensure comprehensive quality controls and audit trails

Suffice to say, now is the time to evaluate whether you’re inter-carrier agreement management and billing system is effective at simplifying complex administration tasks, automating process workflows, enabling changes to be rapidly identified and acted upon, and actually comes to you with information; so that you can better control costs and you’re business. Ask yourself these questions:

• Can you easily manage the volume and frequency of complex rate sheets?
• How often do errors occur due to inefficient and untimely processing of rates?
• Do you spend time managing contracts and agreements in more than one place?
• Do you find that you need to re-process settlements due new rates that have not been applied in a timely manner?
• Do you ever miss changes to new destinations, breakouts and dial codes?
• Are penalties incurred due to rating with inaccurate data?
• Have you lost business opportunities through overlooking rate changes?

Challenges of Inter-Carrier Agreement Management

Maintaining rate sheets in the billing system is an administrative headache for many operators. A huge amount of time and resources are required to accurately input all the destinations, dial codes, rates with effective dates and calendar information into the billing system, error free and ready for rating. Operators receive an increasing number of rate sheets from suppliers all using their own format and layout. A rate sheet will typically have in excess of 200 destinations of which will have a number of dial codes that represent that destination and can result in over 3500 dial codes per sheet. For example a destination of Antigua Mobile might have dial codes of +1268-72, +1268-77 and 1268-464. In addition, each destination might have multiple rates and include other variables such as calendar information. The quantity and frequency of this information requires effective processes for automating rate-sheet import and providing consistent data presentation.

In the face of such overwhelming information it is also extremely difficult to manually compare one rate sheet against another and identify inconsistencies and exceptions. If new destinations, breakouts and dial codes go unnoticed this can result in missed opportunities. For example, a new rate sheet might add a dial code to Antigua Mobile of +1268-465 offering the most attractive price to that particular breakout. If that change is overlooked then there is a potential loss of revenue and you’re company could become uncompetitive. Yet, when making the choice between carriers it is surprising how many operators ignore that it is the rate sheet that is important to identify cost and margin operators and act on redundant information.

In a legacy system environment, withdrawn destinations, breakouts and dial codes are also difficult to spot from the flood of interconnect electronic and paper rate sheets received daily. If, for example, the breakout +1268-464 for Antigua Mobile has been dropped from a rate sheet and goes unnoticed then the traffic being sent to the carrier may be rated using an inappropriate rate, which can lead to disputes and cash flow problems. It may not even be possible to recover the expenditure for that traffic. Yet, it is hard to identify these kinds of risks especially when you have over 300 different rate sheets from suppliers all offering different process for Antigua Mobile and who are all constantly changing their structure by adding and removing destinations, breakouts and dial codes etc.

Equally it can be very difficult to spot if a rate increase has been given less notice than agreed. Usually each agreement will require the carrier to give a reasonable amount of time for rate increases and these will vary from one carrier to another. It may be easy to spot if the dates apply to the rate sheet as a whole, but more difficult to at a granular level when different dates are applied to each destination on a rate sheet, which is often the case. For example the rate for Antigua Mobile may increase from $0.28 to $0.29 in 10 days time. To avoid revenue loss you require real time processing of data and the visibility to hold partners to agreed rates, avoid early increases, and ensure you are not making financial decisions based on destinations that are no longer viable.

Conclusion

To sum up, with all that’s at stake, it’s easy to see why interconnect agreement management should be high on the agenda for many inter-carrier businesses. Today’s interconnect organisations are more complex, fluid and dynamic than ever before. Not only is the number of intercarrier agreements growing, the range and complexity of services offered is increasing too. Managing and maintaining the comprehensiveness of these agreements is critical to eliminate disputes, unpaid bills, cashflow problems and lost financial opportunities. Operators require the tools necessary to handle large volumes of interconnect partners at local, regional, national and international levels, manages rates, dial codes and calendar data in one place for refile and hubbing agreements, fully automate and streamline the loading of data to eliminate discrepancies and automatically detect new supplier rates and dial codes and any changes. The best way of achieving this is with a unified inter-carrier agreement management and settlement software architecture.

Authors: Simon Dadswell and Steve Mills, Intec.