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Least Cost Routing (LCR) is an engineering technique that been around for a long time. But until recently it’s always been a cumbersome manual process of loading a limited set of routes onto an array of multi-vendor switches.
Combine that with the need to synchronize the routes on the switches to the constantly changing rate sheets coming in from your trading partners and it’s easy to see how things can quickly get out of hand.
But with the advent of Intelligent Network SS7 and SIP based LCR, automation has truly arrived. Today, the new approach to LCR is to bypass the painstaking switch updating process altogether by dipping a database on a dedicated server that call-by-call forwards the routing instructions to the switches in real-time.
International call routing offers a completely different set of challenges to common practices in North America. In fact, listening to John Fitzpatrick, head of Product Engineering for TEOCO’s LCR products, doing LCR in North America sounds like a piece of cake by comparison.
In the edited interview that follows, John explains the many issues faced in international LCR from imprecise routing and number portability headaches � to dispute problems and the flood of rate sheets created by the wholesalers that need to be rapidly plugged into the retailer’s LCR system.
|Dan Baker: John, before we get into the subject of international LCRs, please give us a feel for your LCR business in the U.S. because that’s where you got your start in this specialty.|
John Fitzpatrick: Sure, Dan. Our first LCR customer was one of the Baby Bells. And as you can imagine, developing such an application for a Tier 1 is difficult. The robustness, the number of routing exceptions you need to handle, number of interconnect carriers, and number of network elements of a Tier 1 is extraordinary. For instance, a large U.S. carrier may have 40 or more class 4 (inter-exchange) switches that need to be managed. So this experience was invaluable to us as we expanded to international markets.
Now I know that Least Cost Routing is the term people are most familiar with, but at TEOCO we call LCR “optimal cost routing“ because it’s not always least cost that is important. For instance, you can have quality of service and cost intermixed when determining the routing for a call.
Lately we’re focusing more on origination-based routing. Where the call comes from is often just as important as understanding where it needs to go. For example, if you segment your customers into gold, silver and economy groups, you may want to route gold customers to higher quality/higher cost routes. Even within a trunk group, you may want to single out say, 50 key executives, or the heads of enterprise telecom departments — for gold class service.
|How hard was it to make the leap from U.S. routing to international routing?|
International routing is very foreign to how we do domestic U.S. routing. In North America we have the Local Exchange Routing Guide (LERG) to provide numbering plan administration. However, with international there is no such centralized numbering control. As a result, most of the carriers internationally route their traffic based on destination names such as UK Vodafone, UK London, or UK Mobile.
Trouble is, if you have 150 carriers on your network, you are liable to get several different interpretations of what UK Mobile actually means.
|So how do you manage routing?|
The answer is not to use those destination names but instead to use the digits to route, and that’s exactly what our application does. We arbitrage all the digits and rates provided by those 150 carriers and translate them to the lowest digit level. And it doesn’t matter if a carrier breaks out rates six digits or 12 digits deep, we can create a consistent and predictable routing table.
Because our application now stores all the vendor digits, we’re no longer constrained by the storage capacity in switches, so the carrier can have as many unique codes or breakouts as they desire. At one of our clients, the switches used to deal with 15,000 codes — and they thought that was a lot. But today we use over 100,000 breakouts and that gives the client greater route options to choose from.
More importantly, by moving to digit-level routing and reporting, carriers greatly improve accuracy. International billing disputes are rampant today because the rate sheets are so complicated. Not only does it cost you money to resolve the disputes, if you’re misrouting calls because you misinterpreted the rate sheet, it could cost you a significant amount of money besides.
If you’re not using digit-level routing, you go through a fairly complex process called “destination cost blending“ which is a poor substitute since route names such as UK Mobile are an imprecise method of routing because that includes sub-routes that are not broken out separately.
|What about taking in new rate sheets from your routing partners. How does that differ from domestic?|
Domestically, the environment is relatively stable because the call termination rates for tariffed facilities are generally published quarterly. Plus, a Tier 1 carrier might only have 25 interconnect carriers they are routing traffic to domestically, that provide rate updates monthly.
But look at the difference with international. On average, if you have 150 international suppliers, each of those vendors is liable to issue four rate sheets or more per month. So very quickly that can add up to 600-rate sheet changes a month or more.
Oftentimes, you’ll receive a hot discounted rate, say to Brazil, that you want to leverage quickly. So the challenge becomes: How fast can I actually implement those new rates in my network? This is why I liken international routing to a trading-desk environment where rates come in and within an hour you push them out into the network. It’s a complicated process because we have to parse the rate sheets across hundreds of different templates, then normalize and validate the data before we shoot it off to the routing server.
|What about the flipside, John? Wholesalers need to carefully design their pricing rate sheets to optimize the revenue they get from their customers.|
Exactly. We have solutions for wholesalers that both reduce their cost and increase margins by managing their pricing. To calculate optimal prices, a wholesaler needs to run what we all a “future cost“ calculation. Given the fact that rate increases usually go into effect seven days after they are issued, we run a network model that asks: “In 7 days, what do I expect the cost of my network to be for every digit that we are routing?” Then based on that projected cost, the user plugs in the margins they want to earn for different routes — UK Mobile, Germany Frankfurt, etc. Once the user is finished doing this “what if?“ analysis in our tool, he pushes a button to: issue the price quotes, email the spreadsheet, and update the billing system.
|It’s highly interesting. But tell me, how do you handle international number portability?|
What we call local number portability (LNP) in the States is “global number portability“ on the international scene. Once again, the rules and administration are not as tidy as they are here in North America.
Domestically, all routing and pricing is done off the LRN or Local Routing Number. Database queries happen in one place — the NPAC — where you dip for the new local number. We also have a well-defined method for porting numbers through SS7 signaling and SIP signaling.
Global number portability, however, is not well defined through SIP or through the C7/SS7 signaling. Plus, there is no accepted standard for passing portability information. Yet another problem is querying the portability data. In countries like Poland and Spain, their portability data is not allowed to leave the country. You can‘t even make a copy of it. You must query a company that’s local to that country.
The good news is that our INroute solution allows you to integrate the LCR capabilities with Intelligent Routing capabilities to ensure that calls are terminated to the carriers who own the subscriber number and cutting out the “middle man“ who typically lowers the quality and adds to the cost of terminating calls.
|Finally, John, how much savings can operators in Europe expect when they move to optimized routing?|
Actually, Dan, the numbers are quite amazing. Out of the total volume of voice calls, we estimate that moving from blending to digit-based routing, the savings for operators in Europe are in the neighborhood of 5 percent to 9 percent. And the opportunities get even richer when you consider that we work with our clients to further optimize by redeploying or re-engineering their networks to further optimize. In one year, one of our operator clients saved over $15 million.
This article first appeared in Billing and OSS World.
Copyright 2011 Black Swan Telecom Journal