Cerilion InterconnectAccounting2007(Chris Ankers)

Optimising Interconnect Billing & Settlement Strategies

Developing an Efficient Route Optimisation Strategy to Minimise Costs and Build New Revenue Streams

Chris AnkersPrincipal [email protected]+44 7976 609 242

Prague 22nd March 2007 Optimising Interconnect Billing & Settlement Strategies

Slide 2

Cerillion Brief Background

� Established in 1999 following the MBO of the in-house CC&B product division of Logica

� Interconnect Billing since 1995

� Retail Billing and Customer Care since 1992

� Recognised in the Top 100 fastest growing UK technology companies

� Headquarters in Central London

� Cerillion product set includes:� Interconnect Billing

� CRM and Retail Billing

� Mediation

� Web Self-Care


Slide 3

Agenda

� Analysing traffic to optimise Interconnection Costs

� Information required for routing decisions

� Developing an optimal routing plan and implementing the plan in the Network

� Using network measurements to fine-tune the plan

� Identifying key challenges to routing optimisation: tariff processing in an increasingly complex tariff structure, congestion and overflow

� Applying various strategies for optimising the routing tables on differently positioned products


Analysing Traffic

Costs and RevenuesOpportunities and Threats


Slide 5

Analysing traffic to optimise Interconnection Revenue

� Factors that contribute to the optimisation of the Interconnect Process

COSTS- OPEX: Termination of traffic

on OLO network- CAPEX: Network

infrastructureRISKS

- FraudOPPORTUNITIES

- Optimise termination rates


Slide 6

Analysing traffic to optimise Interconnection Revenue

� Factors that contribute to the optimisation of the Interconnect Process

REVENUE- OPEX: Termination traffic from

other operatorsRISKS

- Not all events are billed- Discrepancies in reconciliationOPPORTUNITIES

- Optimise margin by choosing terminating operator for transit


Slide 7

Network Topology

� Is the network being optimised for the best termination rates?

� What if …

� Add new POI closer to the termination point?

� Add another POI?

� Are we interconnected with the correct carriers?

� What if …

� Add a new carrier, is it worth the investment?

� What network POIs would make a new carrier viable?


Slide 8

Example: Add a new Gateway?

POI 1

Operator 1

Operator 2

Operator 3

€0.0156

€0.0075

€0.011

POI 2

Destination


Slide 9

Routing Decisions – Optimal Route

� What do you want to offer your customers?

� Type of Customer� Retail

� Wholesale (transit)

� Best Quality� Routes you can believe in e.g. BT

� Exclude “Low Quality” carriers

� Low Cost� Use the “Least Cost” route


Slide 10

Developing a Plan

� Choose the Optimal Routes for the customer

� Take actions on:

� “Significant” decrease of rates for terminating traffic

� Change network routing

� Maintain margin and low selling rates

� Margin is below target for the route� Look for a lower cost termination

� Increase the selling rate


Operator Survey

Use of Interconnect Management Information to Drive Network Routing


Slide 12

Operator Survey

� How close should the Wholesale Management solution be to your network elements?

� Specific questions on use of Interconnect Data for routing

� How do you use the tools available in Cerillion Interconnect Manager to manage your Interconnect Business?

� Using the tools available to you, do you employ an automatic update of the network?

� How likely are you to use the following features

� “Fast Track” on decrease of termination rate?

� Margin management?


Slide 13

Operator Survey

� How do you use the tools available in Interconnect System to manage your Interconnect Business?


Slide 14

Operator Survey

� Using the tools available to you, do you employ an automatic update of the network?


Slide 15

Operator Survey

� How likely are you to use the following features

� “Fast Track” on decrease of termination rate?

� Margin management?


Fine Tuning

What are the key measurements for fine tuning?


Slide 17

Network Measurements

� Three Types of Routes

� Expected

� What has been setup on the network

� Actual

� The achieved route i.e. route that each event takes across the network.

� Least Cost Route/Optimal Route

� The LCR is the minimum cost to terminate traffic to a destination (include commitment, discounts etc)

� Optimal Route is the least cost route with capacity, quality or other restrictions


Slide 18

Fine Tune the Plan

� Compare routes:

� Expected vs. Actual� Where have routes overflowed?

� Where is there congestion?

� What is the actual cost to terminate the traffic?

� Optimal Route vs. Actual� Should there be capacity restrictions put into the

optimal cost routes.

� Optimal Route vs. Expected� Are there better rates available?


ExampleActual vs. Expected

ActualRoute the CDR registered

ExpectedRoutes the Call should have gone


Slide 20

Expected vs Actual

Comparing Rates where the Traffic has overflowed

Destination Actual Expected

Argentina 10.40 9.90

Austria Mobile 6.63 6.20

Bahrain 18.31 17.65

Spain 3.90 3.52

Switzerland 2.60 2.24

Vanuatu 38.82 33.75

Zimbabwe 14.80 12.24


Slide 21

Expected vs Actual

Rank as a percentage

Destination Actual Expected Percentage (Rate)

Zimbabwe 14.80 12.24 20.83%

Switzerland 2.60 2.24 15.64%

Vanuatu 38.82 33.75 15.00%

Spain 3.90 3.52 10.70%

Austria Mobile 6.63 6.20 6.93%

Argentina 10.40 9.90 5.09%

Bahrain 18.31 17.65 3.73%


Slide 22

Expected vs Actual

Include the Traffic to the Destinations

Destination Actual Expected Percentage (Rate) Traffic (minutes)

Zimbabwe 14.80 12.24 20.83% 12513

Switzerland 2.60 2.24 15.64% 1607979

Vanuatu 38.82 33.75 15.00% 3

Spain 3.90 3.52 10.70% 1263859

Austria Mobile 6.63 6.20 6.93% 1877018

Argentina 10.40 9.90 5.09% 6257

Bahrain 18.31 17.65 3.73% 12513


Slide 23

Expected vs Actual

Which will give a Rank (Lost opportunity cost)

Destination Actual Expected Percentage (Rate) Traffic (minutes) Rank

Zimbabwe 14.80 12.24 20.83% 12513 31921

Switzerland 2.60 2.24 15.64% 1607979 564433

Vanuatu 38.82 33.75 15.00% 3 15

Spain 3.90 3.52 10.70% 1263859 475882

Austria Mobile 6.63 6.20 6.93% 1877018 807501

Argentina 10.40 9.90 5.09% 6257 3154

Bahrain 18.31 17.65 3.73% 12513 8248


Slide 24

Expected vs Actual

Sorted gives a priority task list for Routing

Destination Actual Expected Percentage (Rate) Traffic (minutes) Rank

Austria Mobile 6.63 6.20 6.93% 1877018 807501

Switzerland 2.60 2.24 15.64% 1607979 564433

Spain 3.90 3.52 10.70% 1263859 475882

Zimbabwe 14.80 12.24 20.83% 12513 31921

Bahrain 18.31 17.65 3.73% 12513 8248

Argentina 10.40 9.90 5.09% 6257 3154

Vanuatu 38.82 33.75 15.00% 3 15

€ 18,911.54


Interconnect MIS

Using MIS to support Strategy for differently positioned products


Slide 26

Fine Tune Affect on Products

� “Gold” Service - Premium customers where quality is more important than price

� Expected vs. Actual

� Overflow onto lower quality routes mean lower quality service

� Ensure there is capacity over trunks to provide for premium services

� Optimal Route vs. Expected

� Are there any “quality” suppliers offering better rates


Slide 27


� “Silver” Service – The quality of the call is important but price is an issue

� Expected vs. Actual� Are the overflow routes keeping the silver level

quality

� Are the costs acceptable on overflow routes

� Is the congestion level acceptable?

� Optimal Route vs. Actual � Can the traffic be split across two suppliers where

overflow occurs

� Optimal Route vs. Expected� Are there new routes that can be used?


Slide 28


� “Bronze” Service – lowest cost calls at the expense of quality

� Expected vs. Actual

� Paying too much to terminate traffic?

� Optimal Route vs. Actual

� Overflows increasing termination costs?

� Optimal Route vs. Expected

� Better rates?


Slide 29

Summary

� Optimising Interconnect Revenue� Costs and Revenues depend on choosing the right routing

and choosing the position of the POIs

� Optimal does not mean the least cost

� What the Cerillion Customers Think� MIS is Important part of managing Interconnect Costs

which in turn drive network changes

� Fine Tuning� Expected, Actual and Optimal cost all contribute to the

plan

� Product Positioning� Use the MIS information to drive the strategy for

differently positioned product set


Slide 30

Questions


Slide 31

Cerillion Interconnect ManagerComplete interconnect billing and routing solution


Developing An Efficient Route Optimisation Strategy to Minimise Costs And Build New Revenue Streams

Chris AnkersPrincipal [email protected]+44 7976 609 242

Cerilion InterconnectAccounting2007(Chris Ankers)

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