Reconciliation in wholesale telecoms is proving more challenging for operators

Reconciliation of interconnect supplier costs continues to be a critical task for management of wholesale margins in telecoms. Operators are reporting that settlement of interconnect charges for Voice and Messaging services is growing in complexity and resulting in time-consuming disputes with their wholesale partners.

Interconnect charging variances can still range from 0.5% to 5%. Operators with legacy systems and controls are struggling to support the latest interconnect charging rules, and as a result have poor visibility of wholesale costs and worse still, they could be overpaying their suppliers.

In today’s competitive wholesale market with declining margins, relying on interconnect partners to invoice correctly could expose an operator’s wholesale business. These interconnect costs for sending customers traffic across other telecoms networks, can account for 30% of a telco business. Therefore, even small variances can have a large impact on an operator’s bottom line.

This has become more challenging as interconnect charging rules grow in complexity, with examples that include call origination (OBR), invalid CLI, incremental duration charging and advanced volume discounts and bilaterals deals. Interconnect systems and controls that can support the latest interconnect scenarios can provide both business assurance and a competitive advantage!

How Interconnect Reconciliation in Telecom Works

Validation of supplier interconnect charges is typically achieved by having an interconnect system that can automatically import any suppliers’ agreement changes (mainly destination rates and codes), then rate these charges against the operators own traffic records. It is essential that rating exactly matches how a supplier is going to invoice for these interconnect charges, in order to easily check that a supplier’s interconnect invoice is correct. Reconciliation statements should then highlight any reconciliation issues with a supplier’s interconnect invoice.

Having access to an interconnect billing system that supports rating that will match all supplier agreement formats can simplify any disputes that arise and save time investigating complex issues.

In our 20+ years experience of delivering managed services in wholesale telecoms to some of the leading telco brands, we have found that typical interconnect variances are due to incorrect agreement data being applied by suppliers.  Comparison with supplier CDRs is uncommon and normally for once-off network issues. In this more complex dispute scenario, final settlement can simply be achieved by exchanging one hour of data with the supplier.

Increasing Interconnect Reconciliation Complexity

Reconciliation of supplier’s invoices is becoming more difficult and time consuming for some operators due to the growth in complexity of interconnect agreements. Many operator legacy systems have struggled with management of more recent Origin Based Rating (OBR) agreements, that apply additional surcharges depending on the Anumber or origination destination.

Origin Based Rating (OBR) has created additional surcharges in wholesale agreements in recent years, to rebalance termination rates between countries or economic regions such as the GCC or EEA.

This market shift requires a sophisticated system architecture that looks at both where the call originated from as well as the end destination for rating, billing, reconciliation, pricing and reporting. Traditional interconnect systems required looking up the destination (Bnumber) details only and have struggled to apply these newer origin destination charges.

Call origination rules have extended to include granular Anumber destination charging and invalid CLI rules to deter obvious manipulation and avoidance of call origin surcharges. Wholesale suppliers are further introducing additional call duration increment rules and complex volume discounts and bilateral agreements. Ultimately this has resulted in operators’ systems that are unable to calculate what is due. This can expose these operators to unexpected high costs and negative margins, and without the right interconnect system tool, they end up paying whatever their suppliers invoice them!

Business Assurance with iCONX

Near real time visibility of costs, and having system tools and controls to validate your supplier charges are essential to manage what is likely to be your largest operations cost.

Understanding our customers’ needs is a priority in iCONX and together with monitoring for changes in the wider wholesale market, we are continuously developing our product range to provide our customers with the very best solutions for complicated reconciliation scenarios.

With iCONX you have visibility of your wholesale costs near real-time, and reconciliation of your suppliers charges is simplified and no longer has to rely on guesswork.

The iCONX wholesale management platform has been designed to support the latest interconnect changes including OBR, invalid CLI, incremental charging and volume discounts. Moreover, our telco customers have access to our team’s expertise to support your needs. With iCONX gain access to a unique suite of real-time reports and alarms that provides business assurance by highlighting issues that require immediate attention, such as negative margins or unusual rate changes. You can now confidently understand your cost base, margin management is assured and settlement with your suppliers is no longer consuming your team’s time.

For further information or advice on your interconnect reconciliation operations, please contact us at info@iconxsolutions.com