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Solving the rate-decision disconnect with Trading & Routing Management

Harun Hasić

Harun Hasić

Product Manager

In this blog, Harun Hasić, Product Manager at ZIRA discusses the vital role of international voice services in the current ecosystem and what CSPs can do to get their interconnect business working smoothly.

99% of telco operators around the world make routing decisions based on trading data, supplanted with a trading algorithm like LCR (Least Cost Routing). But over 41% of routing destinations are not aligned with the latest algorithm recommendations. Additionally, almost one-third of routing orders take more than three days to implement. The impact of this on the business is significant, causing revenue losses that CSPs in the current climate simply cannot afford. In this blog, Harun Hasić, Product Manager at ZIRA, looks at the disconnect between what trading data shows and what decisions CSPs make and discusses how they can bridge the gap.

Wholesale voice termination: a vital revenue source in need of a boost

Finding new revenue sources and optimizing existing ones has been somewhat of a mantra for CSPs in recent years, and it’s not difficult to see why. In 2023, global telco revenues fell by 3.5% – a reduction for the sixth consecutive year – forcing CSPs to continue the hunt for ways to protect their bottom line.

When it comes to cost-savings, CSPs’ interconnect business is a good place to start. Wholesale voice termination lends itself particularly well to reevaluation: given the infinite number of ways international calls can be routed from A to B, it offers considerable opportunities for improvement. And although the net global income from international calls has dropped in recent years, the trend isn’t overall negative. A 2023 report by TeleGeography has shown that calls to mobiles in emerging markets have seen a steady increase in the past decade, standing at $10.7 billion in 2022.

Clearly, there is still money to be made from international traffic, but many CSPs struggle to get the maximum benefit due to the increasing complexity of the landscape and their impaired ability to quickly put insight into action.  Let’s explore the reasons behind this.

The complexities of international voice routing

Routing international calls through networks is not as simple as choosing between Carrier A or Carrier B. The landscape is continuing to evolve, and new threats are constantly emerging. Fraud remains a major problem in the sector, with 2023 seeing a according to the CFCA. Given their elevated cost, international voice services are particularly attractive to fraudsters, with International Revenue Share Fraud (IRSF) gaining more and more traction in recent years, with total losses in 2023 standing at a staggering $10.76 billion.

In addition, there are also important legal frameworks to consider. As recently as 2020, a new set of EU regulations came into effect, setting maximum voice termination rates for delivering fixed and mobile calls between networks in the area. This further restricted the choices of operators directing traffic through EU countries.

On top of this, customer experience also plays an important role. Routing choices must be made with the least friction possible, as redirecting calls from node to node creates significant post-dial delays (PDD) and frustration for the caller, making the process even more complicated.

Exceed Customer Expectations by Simplifying Order Management

Traditional ways to navigate the space

CSPs already have certain mechanisms in place to handle complexity in international voice termination, but these are often imperfect and time-consuming to use. For example, most CSPs rely on trading data to support their decision-making, using buy and sell prices to calculate their margins. This often entails manually inputting data from rate sheets received from suppliers into the system, causing potential inaccuracies and delays.

Additionally, traditional systems are not equipped to maximize the full value of trading data. While available, the data is siloed and difficult to read, and sales teams are not empowered with the information they need to make correct decisions fast.

CSPs using traditional ways of network control end up with swaths of vital insight but no clear way to put them to use. We have found that over 41% of routing destinations on the network are not aligned with the latest LCR recommendations, and that routing orders, when implemented at all, are done so with significant delays (3 days or more in 27% of cases). This disconnect is making CSPs unable to protect their bottom line at an already financially challenging time.

Bridging the rate-decision gap with Trading & Routing Management

To get the most out of their interconnect business, CSPs need to be able to act quickly on the insight they have available. This starts with removing time-consuming manual processes at the heart of the organization. An agile and adaptable BSS tool like ZIRA Trading & Routing Management offers automated management and validation of incoming AB or B rate sheets, ensuring that valuable information received from suppliers is correctly loaded onto the system and regularly updated in the form of a full or partial price list for maximum flexibility. For further ease, it can automatically control dedicated email servers that receive rate sheets, taking the raw data and comparing it to a dedicated set of rules, so that there are never any duplications or issues in the received files.

This data then needs to be turned into insight to empower decision-making for sales teams. ZIRA’s solution offers profitability insights and sales simulations to make sure CSPs can react to market insights in real time, and route services with confidence. The system also provides support for renegotiation to ensure CSPs get the best possible rate.

To get maximum value out of trading data, CSPs can complement it with a trading algorithm that can identify the best routing recommendations. This usually entails an LCR (Least Cost Routing) algorithm which can enable cost savings; ZIRA takes this even further with the inclusion of quality parameters, so that there is a healthy balance between the experience of the end-customer and the CSP’s bottom line. Automatic provisioning options make it possible for all trading decisions to be synchronized in real-time, ensuring that CSPs get the most benefit out of profitable rates.

Conclusion

Under current circumstances, CSPs are advised to consider every opportunity for improvement to fight off competition. Intelligent tools like ZIRA’s Trading & Routing Management can make a world of a difference, taking CSPs from reactive to proactive with the power of real-time insight and maximizing the profitability of their international wholesale business.

Trading & Routing Management and the opportunities it can create for your business.

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