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April 2013

Data Integrity Issues Go Global in the Telecom Wholesale Exchange

Data Integrity Issues Go Global in the Telecom Wholesale Exchange

Capacity Magazine estimates that the telecom wholesale market reached $170 billion in 2012.

But whether the market actually grows or declines is of little consequence.  Fact is that carriers are reliant on wholesale partners for the same reason that international trade contributes to the efficiency of a country’s internal economy.

One thing’s for sure: as wholesale prices fluctuate and thousands of new tariff documents are transmitted daily, adjustments need to be made, new partnerships must be formed, and old partners disconnected so carriers can maintain healthy margins.

Going forward, you can bet that trading IP multimedia services across multiple partners and a variety of pricing models is far more complex that tracking minutes of circuit voice calls.  So wholesale systems are headed for more transactions, more settlements, more routing, more QoS — and above all, more complexity.  And that means there’s a big need to automate.

One company who’s been at the pivot point of wholesale systems is Washington, DC based Telarix.  And Vic Bozzo, the company’s Senior Vice President, Worldwide Sales and Marketing is now here to brief us on current wholesale developments.

Dan Baker: Vic, it would be great if you could explain where Telarix lives in the wholesale market.  I know Telarix has been active for many years promoting industry standards in exchange formats.

Vic Bozzo: Sure, Dan.  And yes, our wholesale information exchange, iXLink, is designed for all the carriers.  So as one carrier sends information to another carrier about what they are going to charge, what their bill is, what their settlements are, what their contracts are — once that information reaches our iXLink product, we normalize it, review it, verify and validate it, then pass it on to the carrier’s back office or our own iXTools systems that handles billing, routing, and settlement.

Now the scalability of what we offer is evidenced by the customers we have such as AT&T, Verizon, Deutsche Telekom, and Telecom Italia.

You can equate our direction to where the banking industry is today where all monetary transactions between banks are handled electronically.  Telecom is not at that stage just yet, but Telarix is providing the standards and tools for an end-to-end efficiency model in billing, routing, settling, and really firewalling all of this transaction information.

I came out of the Session Border Controller (SBC) wars and if you look at Acme Packets, the most successful of all SBC vendors, almost all IP traffic touches an ACME SBC at one point or another.  So that’s Telarix’s strategy too, to be the leading interexchange gateway for the wholesale business.

In years past you were strictly in the trading business, but now you’ve supplemented that with wholesale billing and other capabilities.

Yes, we have a full billing solution now.  In fact, if you get a wholesale bill from AT&T, you are getting a bill our system processed and managed.

So to illustrate the transaction flow: when a transaction between Verizon and AT&T happens, the call flow is that the buyer or seller accesses our system, they create a sell order, the buy order comes in through our iXLink product, it is sent for routing through our iXRroute, sent to billing through iXBill, it is sent to finance through our iXFinance, it is sent to the switch, it is routed, billed, and then sent over to Verizon and a mirror image of that happens on the other side.

Our view is that the big carriers will continue to dominate the wholesale business.  In some respects, the current wholesale supply chain will remain the same for the Tier 1 retail carriers, but the focus will shift to lowering the cash outlay to each other.  That means the large carriers will largely move to a bill and keep model where each gets paid by their own subscribers and the rest is settled more simply than it has been in the past.

What is the biggest issue that folks who manage wholesale systems need to worry about?

Well, I would say that data integrity is a huge deal in wholesale.  Because the billing guys have their own database, the routing guys have their own database today, the carrier sales guys has his database, the retail guy has his database, what do we call — all these views need to be normalized.

I think this is a major opportunity for us because the solutions my competitors are offering generally do not consist of a single database.

Here’s the issue: when I route, bill, settle, and buy, I really need data integrity across those subsystems.  What makes that really powerful is when you consider the GIGO factor — Garbage In, Garbage Out.  That’s where iXLink comes as an integrity firewall -- you know 1) that the data across all of those systems is valid and verified; 2) that it is consistent or normalized); and 3) the inputs are being handled in a superior way that removes the errors that come from human intervention that pollutes the data.

Now when you say a single database, is that one global trading system across all your clients?

No, each of our carrier customers has its own platform and if they are a cloud customer, then their system lives in a separate partition in our multi-tenant cloud.

We have no global database.  No such thing exists anywhere.  Maybe over the next 10 years something like that will evolve -- something that combines, say, a Telcordia, Neustar, and other key databases, and it will be most helpful.

But in the meantime, there’s a problem.  Because when a carrier’s system doesn‘t pick up a new tariff or code, it can disrupt the business as other carriers start taking action based on the new rate and it can turn your entire business upside down if you’re late to find out.

So to take care of that issue, one of the things that’s unique to iXLink is a global numbering plan that includes a master definition list but also keeps track of every code you have received.  So this becomes a way to manage rates and codes from around the world.  Maybe today there are some new premium service codes from Telstra, or new mobile roaming codes from China Mobile, or new SMS code from Orange and we keep track of all that.

Every morning, then, our customers come to work and can read a report showing them the volume from their key suppliers and customers.  So that kind of business intelligence is allowing them to focus on doing bigger, better deals with their partners as opposed to spending 80% of their time with 20% of their suppliers.

Not sure why tariffs in India are important to carriers operating in South America.  What’s the reason carriers need a more global view?

Well, take a company like Claro in Brazil or Deutsche Telekom.  These carriers have multiple points of presence POPs to manage and in some cases those POPs have autonomy, so they need to make sure that all of the information they are getting in can be shared across all their global units.

So if I am taking in new rates that may be attractive for divisions on the other side of the world, I want all my other entities to take advantage of those rates.  And that dictates your system have a global view and that thousands of tariff changes be running at the same time under one unified system.

Incidentally, Telarix was been instrumental in promoting international standards and many of our carrier customers have joined together in an association called the Global Business Exchange for Telecom (GBET).

The wholesale business has traditionally been centered around fixed line pipes.  How much of the business is coming from mobile operators these days?

Mobile operators are probably not going to trade wholesale minutes, but I see them using the power of their transactions to get to a point where they have fewer suppliers but greater focus.  To be honest, while the MVNOs are a real phenomenon, there’s not enough margin to support those channels in a big way.

Addressing the mobile market is one reason we have moved to offering a cloud option.  We’ve found that mobile carriers are less willing to invest in all the infrastructure that goes along with running a wholesale operation.  In turn, offering our technology over the cloud allows customers to pay on a more OPEX as opposed to CAPEX model.

Now, some mobile operators are not so constrained of course.  Take China Mobile: they have 800 million subscribers now and are moving to 1.2 billion in the next 3 years.  Previously they were routing that traffic through other carriers, and then one day they said, let’s just do some of this ourselves from now on.  So they applied some technology to the problem and invested in tools to become as efficient as possible as they launched their new capability.

NOTE: In January 2013, Telarix was awarded a U.S. government patent for its information exchange methods.  Scanning the actual patent text and images is interesting reading and shows the complexity of wholesale systems.

Copyright 2013 Black Swan Telecom Journal

 
Vic Bozzo

Vic Bozzo

Vic Bozzo leads global strategy, marketing and communications functions at Telarix.  Vic has been instrumental in the creation and growth of several successful telecom and tech companies.  Prior to joining Telarix, he was President and General Manager of Pac-West’s Emerging Technologies division, Vic holds a Bachelor’s Degree in Electrical Engineering from Manhattan College.   Contact Vic via

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