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HOT TELECOM

insight

the agility journey/


delivering intelligent capabilities in real-time is core to youR agile strategy

the wholesale insight agility journey/ Top carriers are already taking initial steps to resolve their agility journey. Why aren’t you? Our first article in this series outlined the competitive disadvantage that many larger carriers find themselves facing. Some of the top carriers are already taking steps to resolve their anti-agility with investments in virtualization of network elements and the replacement of large monolithic systems for routing and rating. This is increasingly seen as key to long-term survival. Using much more flexible cloud enabled solutions from companies focused purely on these functions gives these carriers the freedom to fully address today’s market environment.

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Some of the innovative, nimble vendors who are best positioned to provide these disruptive solutions, such as Digitalk, may have been around for longer than you think. What they have in common is the scale and mindset to rapidly evolve as the technology and requirements have changed. Additionally, they can now offer an integrated solution of both network elements and business support systems able to handle almost anything thrown at them. These are the types of partners you require to empower your end-to-end agility journey.


agile intelligence/ The race to true real-time intelligence is on International telecoms arose in an era where the single or dominant international carrier in each country would form a solid bilateral arrangement with their peer in the distant country to exchange voice traffic. For many smaller countries, this was a key source of international currencies. Although for most carriers the net position was what mattered to their bottom line. However, our current flexible demand-driven pricing environment is the opposite, as many tens or hundreds of carriers now fight for the right to terminate international calls. Each tries to outdo the others in finding the most cost-effective way to terminate them as they keep the price low to attract more traffic, while maintaining margins just around the level that keeps the company in business. So today we have a unique mix of the old and the new. Large carriers would like to tie down certain arrangements to support a steady stream of revenue (using complex commitments and swap deals for example), while at the same time, fighting ferociously for the “undecided” traffic that is being routed purely on a price/quality basis. The importance of real-time Of course, being able to manage these two conflicting objectives in real-time is key to success, and real-time visibility of your traffic is crucial if you want to then

maximize your revenue and margins. For example, sending more traffic than is needed to meet the terms of a bilateral commitment is throwing margin away, call by call and could cost a carrier much of the value of the deal if they misjudge the traffic flows. Even meeting the volumes agreed more quickly than necessary is risky, as the counter-party may well renege on their side of the deal in these uncertain times. Consequently, having the required real-time intelligence and capability to handle the routing of calls to meet these complex deals, while maintaining an accurate view of the margin impacts on others is now a ‘must have’, not just a ‘nice to have’. Doing this in a way that ensures you accurately deliver on your commitment smoothly and without any under or over-run is also critical. But very few systems offer you this capability in real-time and this is costing your business money on every call. But, coordinating all this with the fight for low margin volatile streams of traffic, where a poor-quality partner can destroy your reputation if not caught rapidly and effectively, is no mean feat. Thus, being able to access such intelligence and management capabilities in real or near real-time is core to your agile strategy, and not something that most legacy systems can support.

agile routing & rating/ Multi-dimension routing and rating systems open up capabilities that you have not even dreamed about Agile routing and rating is the next key step of the wholesale agility journey. As millions of minutes are being transported every day, inefficient routing and rating engines could cost companies thousands in lost margin, if those calls are routed to a less efficient supplier. In an ideal world, the approach to call termination would completely tie and integrate the network elements into the controlling and monitoring systems, so that the best agile routing decisions are made on a call-by-call basis. But this is a capability that is made available by only a handful of innovative systems at the moment.

Poor-quality partners can dEstroy your reputation if not caught rapidly www.hottelecom.com

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With this type of next-generation routing and rating capabilities, the routing decision could be refined to add multiple layers of factors influencing the optimal route, which ensure best quality of experience and optimal margin, while ensuring your commitments are also met in real-time. For example, routing is often dependent on the needs of the originating customer. It could also take into account the internal requirement to fill that day’s need for a commitment against a bilateral agreement with a minute by minute, call by call precision. Carriers could even simply make an informed choice to route the call to a slightly more expensive carrier, because the analysis system driving the routing choice recognized that the marginally longer call durations being achieved via that carrier could result in a higher cash margin. With the trust gained from experience, such systems can both detect opportunities and implement them in real-

time to gain maximum benefit from the modified routing. At the end of the day, the cash income that the service generates is the key to success in the business. A tight integration between network and systems allows every call to be rated immediately on completion and made available to the systems driving the agile routing of the next call. But, of course, this process must almost be infinitely scalable to cope with the millions of calls that are established each day, while still producing real-time and focused information. With this, the managers overseeing the process can see the call by call margin that is being generated as it is occurring, giving them the up-to-date information required to drive the next deal they envisage. This type of multi-dimensional routing and rating system therefore opens up a treasure trove of opportunities to not only optimize your profit and margins, but customer’s satisfaction at the same time.

agile margin protection/ How to ride the OBR wave to optimize margin and minimize revenue loss In the same way, a flexible, real-time interworking between network and systems is the solution to empower call by call routing decisions, enabling carriers to address increasingly complex routing and rating scenarios.

at present, through to Africa and the Middle East, the more the system begins to resemble a much more complex version of the bilateral agreements that existed half a century ago.

For example, it enables them to handle the sort of external shocks that have arisen from operators deciding to charge a differential rate for calls coming from certain regions (or even from certain operators), as they struggle to maintain their profitability. This approach, known as Origin Based Rating or OBR, adds much risk and complexity to the intermediate carriers.

Although, instead of managing agreements between 150 carriers (22,350 unique deals), this type of multidimensional rating environment would trigger an exponential growth in the numbers of routing options.

It is perhaps debatable how far this can go. The more a service has differential charging depending on some attribute of the call (the originating number in this case), the more the system becomes attractive to fraudulent attempts to bypass that differential. Nothing is new in telecoms, perhaps, and the rise of SIM bypass devices, for instance, highlights exactly this scenario. As terminating service providers extend this, from Europe

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call by call rating could mean managing millions of unique deals


It means that carriers would have these unique agreements between 1,500 end operators, translating into almost 2.5 million unique deals. A staggering amount, and this is only the tip of the iceberg as we add in different quality expectations and perhaps internal margin targets on different traffic streams. This is where modern approaches to networks and systems come into their own, and there are innovative cloud-based systems already available in the market to address such a complex environment. Without these intelligent systems, carriers will not be able to address this new complex reality, and will as a result suffer from further margin erosion. The key to success with many of these OBR systems is to ensure that you are never in a position where unexpected charges or penalties, from the terminating operator, can totally destroy any margin made on that route. Having the ability to accurately rate calls for your customers is part of this, and being absolutely up to date with the latest changes to origin rates is key. At the same time, being resilient to fraudulent attempts to bypass the higher rates that apply to certain countries is of growing

importance. Many network elements have the ability to modify the fields in the signaling that identify the originating number, and recognizing attempts to do so fraudulently is complex, but critical to protect revenue and margins. There are some industry-wide enhancements under development, which will perhaps help in this case, as standards developed to prevent caller ID spoofing (a major issue with spam calling in many countries) are implemented. These standards, known as STIR/SHAKEN, enable the originating service provider to assert (via a digital certificate) that the caller ID in the call messaging is accurate and valid. Subsequent carriers in the chain can also confirm that no modifications to those fields have been made. But one thing is certain, no matter how good you think you are at identifying and preventing these frauds, the fraudsters will almost always be one step ahead. So, it is becoming increasingly important to have access to agile fraud prevention systems, empowered by AI and machine learning, to keep up with the new innovative fraudsters that will tirelessly try to take advantage of the complexity to win at the fraud game.

agile customer interaction/

Address new pre-paid customer segments with agile, real-time systems to address untapped revenue The next step in the agility journey is to foster agile interaction with both your customers and suppliers. There are challenges in dealing with how customers and suppliers are increasingly expecting to interact with international carriers both in person and via their system interfaces throughout the relationship’s life-cycle. Agility in terms of payment cycles, contract terms and the integration of systems using APIs to minimize human involvement are all key requirements. Addressing new markets There is no doubt that in today’s new reality, interacting with customers in an agile way will improve customer experience. But it will also enable carriers to address segments of the markets they would not have been able to otherwise, bringing new untapped revenue and savings with minimal risk and resources. In this day and age, where diversity and resilience are

becoming a crucial part of carriers’ arsenals, and where revenue is becoming a scarce commodity, not being in a position to address new high growth segments is never a good business position to be in. For example, smaller customers in particular may not have the credit ratings and history to be provided with the normal post-paid billing arrangements, but may represent a significant growth opportunity for major carriers traditionally unable to handle this risk. Consequently, using flexible and intelligent systems that will automatically request pre-payments against termination service are key for carriers to tap that new source of revenue, with minimal exposure. The internal ability to track the take-up of those funds as each call is established gives them the peace of mind that they are being appropriately charged and minimizes any risk for the carrier.

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This, coupled with AI- driven forecasting of usage allows prompts to be provided well in advance of the exhaustion of the credit facility enabling them to refund it in good time. Capitalizing on niche suppliers On the supplier side, many niche providers obtain their rates by offering rapid payment (and pre-payments) to their own suppliers. Funding these deals can be a headache.

Flexible systems and processes within the carrier community can help maintain and support these relationships with accurate real time rating, which then drives payment systems to provide much faster financial cycles than is the norm, all in an automated fashion. Doing so can potentially open-up a segment of the market and often lower priced routes, which would not otherwise have been available.

start your journey/ Now is definitely the time to establish a longer-term plan for the evolution of networks and systems underpinning the agility of the international telecoms environment. A decision by a large wholesaler to scrap years of investment in networks and systems may be impractical, but so is continuing to feed millions of dollars or euros into amending, supporting and trying to squeeze new features into the existing stacks. Getting from anti-agile to a fully agile stance is not an overnight miracle, but without taking the first steps,

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it will be a long march. Carriers that adopt these agile technologies into their core network can reap the benefits of the strong relationship between real-time data and the decisions needed to accurately and effectively route each call. While these initial gains are exciting enough, as technologies such as machine learning and neural networks mature, additional capabilities will undoubtedly emerge. And that, and more, is the subject of our next article in this series!


the author/ Steve has a lifetime of experience in designing, engineering and operating networks, both domestic and international. With leadership experience in small technology start-ups through to global service providers, he has deep experience in a wide range of products, technologies and geographies. He has the rare skill of being able to explain complex technical issues in easily understood concepts and uses that extensively in his consulting work with HOT TELECOM.

Steve Heap

CTO, HOT TELECOM

Steve Heap CTO, HOT TELECOM

Digitalk is an agile, experienced provider of innovative, cloud-based real-time communications platform-as-aservice solutions. We are a reliable, trusted partner that works with customers in the long-term. Our solutions deliver outstanding breadth and completeness of services, high availability, great value for money, scalability, stability, security, and a global presence. We provide a one-stop shop to meet all communications service provider needs, allowing them to offer the services they want and enable the delivery of real-time services from a fully virtualised, cloud-hosted environment.

Digitalk has been responsible for the delivery of hundreds of solutions globally, supporting billions of sessions each year. The proven expertise, innovation and scale provides the foundation of success for our partners and customers. The insights we deliver help them to evolve and refine their offers. www.digitalk.com

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Profile for HOT TELECOM

The wholesale agility journey  

Top carriers are already taking steps to resolve their anti-agility with investments in virtualization of network elements and the replaceme...

The wholesale agility journey  

Top carriers are already taking steps to resolve their anti-agility with investments in virtualization of network elements and the replaceme...

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