Email a colleague    

June 2011

International Call Routing: A Challenging Area to Master, But Payoffs Can Be Big

International Call Routing: A Challenging Area to Master, But Payoffs Can Be Big

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

 

About the Expert

John Fitzpatrick

John Fitzpatrick

John Fitzpatrick joined TEOCO as part of the acquisition of Vero Systems in 2008, and brings over 25 years of Telecommunications, IT and OSS experience.  Formerly the technical sales director at Bell Atlantic Software Systems, Fitzpatrick directs the implementation of TEOCO’s Routing Management solutions in the U.S. and abroad.

Related Stories

  • International Call Routing: A Challenging Area to Master, But Payoffs Can Be Big interview with John Fitzpatrick — International call routing offers a completely different set of challenges than the common practices found in North America.  This article explains the many issues faced in international LCR from imprecise routing and number portability headaches to dispute problems and the flood of wholesaler rate sheets that must be rapidly made sense of and implemented in the routing plan.
  • Dynamic Call Routing: The Market Enabler that Allows VoIP to Improve with Age interview with Neal Axelrad — Least cost routing (LCR) has matured greatly in recent years.  Today’s routing is far more dynamic because of new real-time capabilities.  This article explains technology advances that instaneously re-routie calls based on real-time intellgence gathering from the network.  Also discussed are template-driven rate addendums, SaaS delivery, and the economics of LCR.
  • Meet Your New Cost Management Solution: A Tandem Hub Carrier interview with Surendra Saboo — In the telco interconnect game, frustrations are many: high tolls, jurisdiction scams, and the expense of connecting to a partner.  This article explains how tandem or aggregation carriers are making life easier and saving operators a boatload of money.  Learn the difference between peering and a “tandem hub” and why this trend is becoming increasingly global.

Related Articles

  • Webinar: From Wholesale Settlement  to Global Partner Management by Dan Baker — A 40 minute webinar providing a sweeping view of the challenges and opportunities service providers face as they try to manage a far more complex wholesale and partnering scene.
  • Special Report: Wholesale Systems for Advanced Services by Dan Baker — Plenty of technology and market changes are disrupting the telecom wholesale market: advanced services, new kinds of partners,,and the need to monitor relationships and services more closely than was ever required in the circuit voice world.  This article introduces a TRI special report discussing the kind of Wholesale Systems needed in this challenging marketplace.
  • Data Integrity Issues Go Global in the Telecom Wholesale Exchange interview with Vic Bozzo — Wholesale systems enable operators to expand their global reach and work efficiently with partners in an increasingly interdependent telco business.  In this article, you’ll learn about: how many subsystems work together in support of the global trading exchange, why data integrity has become critical, and how wholesale business trends are affecting wholesale systems at Tier 1 and mobile operators.
  • Network Asset Choreography: Subex Teaches Analytics to Dance with Discovery & Life Cycle Management interview with John Brooks — Network provisioning and asset life cycle management is a foreign world to most business assurance professionals because it’s a domain that lives outside the order-to-cash stream.  This article explains how new analytics and network discovery techniques are enabling operators to better track assets, plan capacity, and pave the way for strategic network deployments and decommissioning.
  • Atlanta-lytics: New Telecom Conference Features Revenue and Customer Analytics by Dan Baker — A new telecom conference on analytics in Atlanta (January 29 — 31) is shaping up to be a key event for people who want to stay abreast of this fast moving field.  Black Swan is hosting a half-day, pre-conference workshop entitled, “Financial and Revenue Analytics” featuring seven speakers, many of whom are contributors to this magazine.  Detailed program guide is enclosed.
  • Big Data Financial Analytics: Creating Business Value for Tier 1 Telecoms interview with John Devolites & Atul Jain — What exactly is an analytics company?  This interview with executives at TEOCO helps defines this new breed of telecom solution vendor — a cross between software, consulting, and assurance supplier.  Along with a few Tier 1 case studies, the interview discusses: big-data vs. sampling, analytics project management, and the importance of data access.
  • Margin Analysis: Bolting Profit Assurance onto a Revenue Assurance Platform by Efrat Nissimov — Margin analysis is one of the hottest trends in business assurance.  But what’s all the excitement about?  This article explains the benefits, the market forces driving its adoption, and its advantages over Excel and heritage data warehouse approaches in terms of flexibility, data granularity and quicker time to access.  The author also touts major cost savings if margin analysis is deployed as a module within an existing revenue assurance suite.
  • Partner Settlement: The Adaptable Chameleon that Lives Between Wholesale and Retail Billing interview with Arun Kalavath — Partner settlement has been around a long time, but its profile is on the rise because wholesalers are offering new services and content services are bringing settlements into the retail sector.  In this article, you’ll learn about the market forces changing the wholesale business, the expanded portfolio of services that require settlement, and advice on how to pick a settlements solution vendor.
  • Carrier Usage Audits: Why Regular Checkups Are the Key to a CSP’s Bottom-Line Health by Brian Silvestri — Many telecoms are wholly unaware of the risks of not having a solid usage auditing program for interconnect bills.  Rather than a once-a-year or once-a-quarter audit, this article makes the case for regular monthly audits.  Also discussed are: the different types of audits and organizations involved; the dangers of not auditing often; and factors to consider when selecting a cost-management vendor.
  • Partners in Carrier Management: The Success Story Behind T-Mobile’s Fiber Rollout in Wireless Backhaul interview with Bryan Fleming — Wireless backhaul is the unsung hero of the smartphone’s success.  This interview with T-Mobile’s carrier management architect for backhaul reveals the behind the scenes game plan for one of the most ambitious wireless interconnect programs ever.  You’ll learn about: the reasons for adopting a full-scale fiber strategy; the challenge of finding carrier partners; the clever techniques T-Mobile used to simplify and cut costs; advice on building great relationships with suppliers; and the key role that analytics, assurance, and visualization software played.
  • Will Apple Take a Bite Out of Carrier SMS Revenues?  Likely. by Brian Silvestri — Text messaging generates $20 billion of revenue each year for U.S. carriers alone.  But Apple’s lastest iPhones come with iMessage, a free embedded messaging service.  But while the long term threat to SMS revenue is clear, what strategies should operators be following today?  This article discusses the many factors operators need to consider, offering advice on how mobile operators can keep SMS profits rolling in as long as possible.
  • Invoice Audit Productivity: From 19th Century Textile Mill to SaaS by Peter Yelle — When it comes to invoice reconciliation, are your processes and tools modern and efficient, or is your company stuck in a 19th century time warp?  This article show how operators can vastly reduce their manual audit steps by automating via a SaaS solution.  The  detailed case study and diagram show which tasks were automated to achieve an 80%+ productivity gain.
  • Least Cost Routing and Rate Audits Not Delivering the Savings You Expected?  Here’s Maybe Why by Brian Silvestri — Least cost routing (LCR) is supposed to be one of telecom’s greatest cost-saving innovations.  Yet Connectiv Solution’s research suggests that the LCR programs at many U.S. carriers are losing millions of dollars.  The story explains the traffic analytics steps service providers must take to ensure profitable LCR and other cost assurance programs.
  • Wireless Backhaul: Preparing for the Cleanup When the Dust Settles by Charlie Thomas — Wireless backhaul represents perhaps the largest telecom build-out in the last decade.  This article lays out a strategy for operators as they sooner or later must groom, optimize and re-engineer their backhaul networks based on actual capacity needs, new pricing and improved supplier agreements.  The article lays out a 6-point plan for ensuring success.
  • Is Offering Free International LD on Your Horizon?  Follow These Checkpoints by Hulya Altinsoy — Free is a magic word for consumers.  So how about adding free international long distance (LD) to your list of services?  While free international LD serivce is fraught with risk, the article presents a  5-point checklist to help get your bearings before you make the leap.  The article also presents an analysis of billions of minutes in international LD calls by U.S. wireless carriers.
  • Real-Time Network Intelligence: The New Way to Read Telecom Tea Leaves by Suren Nathan — Real-time network intelligence is the key to deciding which products to launch, whose facilities to lease, and where to route traffic.  The article explains why telecoms — and especially enhanced service providers --  should ideally be equipped with both a fine-grained margin analysis solution and a SaaS platform, offering an upgrade path that requires no internat IT support.
  • International Call Routing: A Challenging Area to Master, But Payoffs Can Be Big interview with John Fitzpatrick — International call routing offers a completely different set of challenges than the common practices found in North America.  This article explains the many issues faced in international LCR from imprecise routing and number portability headaches to dispute problems and the flood of wholesaler rate sheets that must be rapidly made sense of and implemented in the routing plan.
  • Dynamic Call Routing: The Market Enabler that Allows VoIP to Improve with Age interview with Neal Axelrad — Least cost routing (LCR) has matured greatly in recent years.  Today’s routing is far more dynamic because of new real-time capabilities.  This article explains technology advances that instaneously re-routie calls based on real-time intellgence gathering from the network.  Also discussed are template-driven rate addendums, SaaS delivery, and the economics of LCR.
  • Network Inventory Integrity: Taking Cost Management to a Higher Level interview with Suren Nathan — Recovering stranded assets and capacity is essential for minimizing CAPEX and leasing costs.  This article makes the case for reconciling network inventory through the many ordering, billing, and other systems that interact with that inventory.
  • An Automated Self-Audit Approach to Telecom Cost Assurance interview with Jim Buttafuoco — What’s the value of an automated approach to invoice validation?  This article explains the power of the SaaS model where the vendor supplies the data-processing expertise, relieves the operator of tedious manual work and boosts auditor productivity so more money is saved.
  • Meet Your New Cost Management Solution: A Tandem Hub Carrier interview with Surendra Saboo — In the telco interconnect game, frustrations are many: high tolls, jurisdiction scams, and the expense of connecting to a partner.  This article explains how tandem or aggregation carriers are making life easier and saving operators a boatload of money.  Learn the difference between peering and a “tandem hub” and why this trend is becoming increasingly global.
  • Cost Assurance: Dealing with Rating Variety in Wholesale Bills by David West — Validation of intercarrier wholesale invoices seems like a fairly straight forward process.  But regulatory rules and a variety of bill rating methods have made it very complex.  This article details the challenge by walking through a wireless carrier case, then laying out the argument why operators should opt for a custom solution based on a core reporting engine.