Learn more about the growing adoption for “60-60 billing” techniques, and how to ensure compliance for both billing and settlement.
“60-60 billing”, or to give it a better title “Incremental billing”, is on the rise. iCONX SME Vincent Coessens explains the history, typical models, and compliance challenges for this requirement
Incremental billing means that Carriers are charging in slices that are higher than a single second. For example, “per-minute charging” means that a call lasting somewhere between 0 and 60 seconds would always be charged as 60 seconds. Likewise a call lasting between 61 and 120 seconds would be always charged as 120 seconds and so on. So - speak for 40 seconds, but pay for 60.
Essentially, incremental billing means that customers are charged for call duration that they did not use.
The charging model is typically expressed using two numbers, the first part being the ‘minimum’ and the second part the ‘increment’. The above example of per minute billing would be written as 60/60, whereas Standard per second rating would be 1/1.
A different model could apply, whereby in the first minute, anything below 60 seconds is rounded up to the nearest minute, but after that first minute then a normal “per-second” rating applies again. This is known as “60/1”. So - speak for 40 seconds, pay for 60. Speak for 61 seconds, pay for 61.
In fact, many different models can apply and it’s vital that the interconnect billing system can cope with all.
For instance, other common models are 6/6, 10/10, 18/6. Historically, retail billing was based on ‘pulses’ that were generated by switches at particular times, typically every minute (60/60) or every 6 seconds (6/6). Whereas current billing systems now use event records rather than pulses, many carriers still apply this incremental billing, typically in their retail billing plans.
Growing trend – the rise of Incremental Billing
A few countries have long included incremental billing in their wholesale offer as well, Mexico (60/60) and Gambia (initially 6/6, currently 60/1) being well known examples for a few years.
However during the course of 2016, 8 more countries (often incorrectly referred to as Pacific Islands) have joined, and 2 more have joined in the beginning of 2017.
- 2013 : Gambia 60 / 1
- 2013 : Mexico 60 / 60
- Apr-16: PNG 60 / 60
- Apr-16: Tonga 60 / 60
- Apr-16: Vanuatu 60 / 60
- Apr-16: Western Samoa 60 / 60
- Sep-16: Kiribati 60 / 60
- Oct-16: Suriname 60 / 60
- Nov-16: Nauru 60 / 60
- Dec-16: Haiti 60 / 60
- Jan-17: Niue 60 / 60
- Jan-17: New Caledonia 60 / 60
With little regulatory pressure on calls originating abroad, incremental billing becomes a straightforward way to highly boost (wholesale) revenue. We expect this list of countries to grow in the course of the year.
Depending on the exact distribution of call durations, 60/60 or 60/1 billing could well result in additional revenues between 10 and 30 percent (given an average call duration of 2 minutes) or up to an additional 100 percent for an average call duration of 35 seconds.
As a carrier terminating traffic, a statistical analysis of your call durations will tell you the optimal minimum and increment figures and the revenue increases that can be expected.
As a carrier sending minutes to countries applying incremental rating, you will need to accurately calculate the expected cost as well as to route in a cost effective way to these countries.
iCONX System Compliance
From inception, the ICONX system has been capable of handling Billing increments, both for incoming (billable) and outgoing (payable) traffic. Our functionality not only allows users to incrementally bill as it is currently in use on the market (with 2 rate spans), but we also allow users to define more complex scenarios with multiple (more than 2) rate spans. It would be, for example, no problem to rate the following scenario:
- 0-60 seconds: Round up to 60 seconds
- 61-600: Round up to the next 10 seconds
- 601- 1200: Round up to the next 6 seconds
- 1201- : Charge per second.
If you are experiencing growing issues with the billing and settlement of these increments, please contact firstname.lastname@example.org to find out more.