In the dynamic world of wholesale telecoms, incremental billing has emerged as a powerful tool to boost revenues. Since 2016, we have witnessed a significant expansion in the adoption of incremental billing across various countries, each introducing different increment types. This trend is particularly notable in regions with minimal regulatory pressure on calls originating from abroad, making incremental billing a straightforward and effective strategy for enhancing wholesale revenue.

Incremental Billing Growth in International Voice

Incremental billing, also known as 60/60 billing, involves charging customers for call durations in larger increments than the actual time used. For instance, a call lasting anywhere between 0 and 60 seconds is billed as a full 60 seconds. This method ensures that telecom companies can maximise the revenue per call, even for shorter durations. Incremental charging was historically seen in domestic services and in recent years has expanded into international voice agreements.

The Impact of Minimal Regulatory Pressure

One of the key factors contributing to the growth in incremental billing is the minimal regulatory pressure on calls originating from abroad. This lack of stringent regulations allows telecom companies to implement incremental billing models more freely, leading to substantial revenue gains.

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Global Adoption with Origin Charging

Since 2016, more countries have embraced incremental billing, each with its unique increment types. iCONX Director Sacha Jones explains “Incremental billing developments in International Voice have occurred in combination with Origin Call charges. These wholesale market changes are being driven by the need to improve margins in a commoditised market”. Countries like Vietnam have implemented 60/1 billing, while Brazil has adopted 30/6 billing. The UAE, for example, has introduced 60/60 billing for calls originating from India. These variations in billing increments allow telecom providers to optimise their strategies and maximise revenue.

Incremental Billing in the Middle East and Africa

More recently, the Middle East and Africa have seen the introduction of new billing increments combined with origination charges. Sacha Jones further explains “This development is particularly significant as it represents a strategic move to further boost wholesale revenues in these regions”.

  • Africa: Carriers have introduced 60/1 and 60/60 billing increments for certain African destinations, depending on the origin of the call. This approach appears to be reciprocal and mainly applies to non-European originating destinations that have incremental billing, for example Vietnam mentioned earlier.  This strategy is enabling some operators to capitalize on the typically higher increment rates in those countries.
  • Qatar: Starting in April 2025, Qatar will implement 60/60 billing increments for calls originating from non-GCC countries. This change is expected to significantly enhance revenue generation for telecom providers operating in the region.

Potential Downsides of Incremental Billing

While incremental billing can significantly boost revenue for telecom companies, it also has some potential downsides:

  1. Customer Dissatisfaction: Incremental billing can lead to customer dissatisfaction where partners are charged for more time than they actually use. For example, a call lasting 40 seconds might be billed as a full 60 seconds, which can feel unfair.
  2. Regulatory Scrutiny: Although there is currently minimal regulatory pressure on calls originating from abroad, this could change. Increased regulatory scrutiny could lead to stricter rules or potential penalties for telecom companies that misuse incremental billing.
  3. Complex Billing Systems: Managing different billing increments for various destinations and origins can complicate billing systems. Telecom companies need sophisticated systems to handle these complexities, which can increase operational costs.
  4. Competitive Disadvantage: In highly competitive markets, incremental billing might put telecom companies at a disadvantage if competitors offer more transparent and customer-friendly billing practices. Customers might prefer providers with per-second billing over those with incremental billing.
  5. Potential for Disputes: Incremental billing can lead to disputes between telecom companies and their customers or partners. Discrepancies in billing increments can cause disagreements over charges, leading to administrative burdens and potential loss of business.

Unlocking Profits, One Increment at a Time

The expansion of incremental billing and the introduction of origination charges represent a significant shift in the wholesale telecom landscape. By adopting various billing increments and leveraging the minimal regulatory pressure on international calls, telecom providers can effectively boost their revenues. As more countries join this trend, we can expect to see continued growth and innovation in billing strategies. Telecom companies need sophisticated systems to handle these complexities.

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Future-Ready Billing with iCONX

From inception, the iCONX system has been capable of handling Billing Increments, both for incoming (billable) and outgoing (settlement) traffic. Our functionality supports simple incremental charges (typically with 2 rate spans). Users can also easily configure more complex scenarios with multiple (more than 2) rate spans. If you are experiencing growing issues with the billing and settlement of incremental charges, please contact info@iconxsolutions.com to find out more.