Improving the Quality and Profitability of the Wholesale Business

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Improving the Quality and Profitability of the
Wholesale Business Carl-Henrik OlssonBusiness
Development Manager November 26, 2007
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Topics covered

• Intec Overview
• The Wholesale Business
• Wholesale Trading and Routing Processes
• How a system can support Wholesale Trading and
  Routing

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Intec Snapshot

• One of the top 5 OSS/BSS vendors worldwide
• Over 65 of worlds top 100 carriers now rely on
  Intec products and services
• Clear global leader for wholesale solutions
• Solutions include
• Trading and Routing
• Interconnect settlement
• Mediation
• Retail billing
• Outsourcing

Stratecast considers Intec an industry leader in
the mediation sector and in the interconnect
sector by both the size of its installed customer
base and annual revenue derived from mediation
and interconnect.
source Yankee
One reason for the companys success...is that
it dominates the interconnect market in terms of
client numbers Source Yankee
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Global capability - local delivery
1998
1999
2000
2001
2002
2003
2004
2005
2006
5.5m
Revenue
8.4m
20.3
39.8m
47.5m
50.7m
68.8m
116.2m
68.8m
112.2m
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49
456
460
529
1292
1700
Staff
176
1606
529
IPO in London
Acquires two US companies
Expansion in EMEA AP and CALA
Intec FoundedOctober 1997
Consolidates OSS market
Enters IP BSS/OSSmarket with Digiquant
Acquires Singl.eViewretail billing business
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Global Customer Base

• 450 customers using Intec products in over 650
  successful installations

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Wholesale Processes

• Trading
• The process of buying and selling wholesale voice
  minutes, to maximise margin
• Routing
• The process of determining an optimal routing and
  implementing the changes in the network, to
  optimize cost, quality, and capacity

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The Wholesale Environment
Revenue Constraints Costs Margins
Load share
Peak Off-Peak 0.23 0.18
Retail 1
50
Home Operator
Country
Supplier Carrier A
Gateway 1
50
0.15
0.21
Retail 2
Occupancy95
1M mins
Customer Carrier
City
SupplierCarrier B
Wholesale
70
ASR61
ASR33
Gateway 2
Split Traffic
10k mins
30
VoIP
ASR70
Mobile
Supplier Carrier C
5M lt 0.84 lt 10M
Corporate
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Refile agreements

• Suppliers offer termination of international
  traffic
• Complete A-Z lists usually once per month
• Rate changes for certain destinations mid-month
• The offers are received usually as excel sheets
• Different quality levels (premium, standard,
  mobile, VOIP, etc)
• Destinations dial code definitions
• Rates per destination, time of day
• No standards of destination definitions or
  formats

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Bilateral agreements

• A combined buying and selling agreement for the
  destinations of the respective carriers
• Usually highest quality available
• Is often designed to minimize the outpayments for
  both sides
• Often use very high rates to boost revenues of
  both partys (but this is changing with SOX)
• Normally run over a period of 3, 6, or 12 months
  with a monthly check-point
• Can include volume and/or revenue commitment
• Can have rates that depend on volume
• Are netted at the end of the agreement period

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The Wholesale Environment
Revenue Constraints Costs Margins
Load share
Peak Off-Peak 0.23 0.18
Retail 1
50
Home Operator
Country
Supplier Carrier A
Gateway 1
50
0.15
0.21
Retail 2
Occupancy95
1M mins
Customer Carrier
City
SupplierCarrier B
Wholesale
70
ASR61
ASR33
Gateway 2
Split Traffic
10k mins
30
VoIP
ASR70
Mobile
Supplier Carrier C
5M lt 0.84 lt 10M
Corporate
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Example Subscriber Segmentation
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Example Carrier Segmentation
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What defines quality?

• ASR Nr of seizures resulting in answered call /
  Total seizures
• ABR Nr of bids resulting in answered call /
  Total bids
• NER Number of successful calls / Seizures
• PDD Post Dial Delay Time after last digit
  dialed to ring tone
• ALOC Average Length of Call
• CLI Guarantee Is Calling Number transmitted to
  receiver
• Voice Quality Noise interferences

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Conclusion

• Different types of customers want to buy
  different types of products

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Conclusion

• Different types of customers want to buy
  different types of products
• How do you take advantage of this???

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Example of product portfolio
Product Quality Retail Very high ASR, Low
PDD Bilateral (if possible) Retail VoIP Best
Effort Sent mostly over VoIP
Carriers Wholesale Gold High ASR, Low
PDD Wholesale VoIP Best Effort Sent mostly
over VoIP Carriers Mobile High ASR CLI
Guarantee
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Wholesale Processes

• Trading
• The process of buying and selling wholesale voice
  minutes, to maximise margin
• Routing
• The process of determining an optimal routing and
  implementing the changes in the network, to
  optimize cost, quality, and capacity

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Wholesale Process Model
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GroupsContract Management

• Responsible for buying and selling international
  wholesale minutes
• Objective is to maximise operating margin

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GroupsRouting Management

• Responsible for determining how traffic is routed
  out of the network
• Objective is to minimise routing cost while
  continuing to deliver on customer commitments

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GroupsNetwork Management

• Responsible for implementing the routing changes
  in the network while continuing to maintain
  network reliability and integrity
• Objective is to minimise the time it takes to
  introduce routing changes and ensure reliability

Maximise operational productivity
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GroupsPerformance Management

• Responsible for checking the performance of the
  business and troubleshooting problems
• Objective is to quickly identify and resolve
  routing problems that could affect business
  profitability

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• How could a system support the wholesale business?

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Supplier refile price list management

• Automatic loading of excel sheets with mimimum
  manual steps for any price list formats
• Validation of rate sheets
• Mapping of
• Supplier destinations to routing destinations
• Supplier time of day to routing time of day
• Alerts for destination changes and rate changes

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Bilateral agreement management

• Register bilateral agreements
• Track volume commitments fullfilment with reports
  and alerts
• Generate monthly and period declarations
• Verify other partys declarations
• To generate netting statements

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Agreement Tracking
Minutes
4 M
20
Commitment
3 M
Available
2 M
1-Jan
1-Jul
Agreement Period
31-Dec
Volumes tracking for destination France Acutal
vs Target volumes
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Service Delivery (Routing Optimization)

• Route the traffic based on
• Sold product
• Destination
• Rates
• Quality (offered or measured)
• Capacity
• Time of Day
• Bilateral commitment fulfilment
• Implement it quickly and correctly into the
  network

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Sell refile traffic

• Define different products (service levels)
• Retail High ASR and direct connects
• Mobile High ARS and CLI guarantee
• VoIP Best effort
• Avoid being cherry picked!
• To define selling destinations
• To calculate a minimum and recommended sales
  price
• Based on cost base
• Customize the offers
• Generate and distribute xls price lists quickly
  and without errors

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Monitor Quality

• To monitor quality in near real-time based on
  actual traffic
• ASR, ABR, NER
• ALOC
• PDD
• Intrusive test calling quality (MOS, R-Value)
• Report and alert on quality and quality trends
• Hourly, daily, weekly, etc
• Black-listing of destinations for a suppliers
  (exclude as a choice in the routing)

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Monitor Margin

• Cost, Revenue, and Profitability analysis per
• Time period (down to hour)
• Per customer
• Per supplier
• Per product, destination, time of day

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Settlement Management

• Generation of reports as basis for invoicing and
  verifying received invoices for refile traffic
• For bilateral agreements both intermediate and
  period reports
• Netting statements for bilateral agreements
• Reconciliation of received and generated reports
• Overall level
• Detail level
• GL Postings for invoices, adjustments etc

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Business Benefits

• Reduce your interconnect bill
• Optimize routing destinations
• Optimize routing plan
• Act on favorable prices quickly
• Increased ARPU through increased quality
• Increase call termination
• Increase Average Length of Call
• Reduce Post Dial Delay
• Increase customer satisfaction and reduce churn
• Build new revenue streams
• Attract new retail and wholesale customers with
  differentiated product offerings (Premium,
  Standard, VoIP)

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Business Benefits

• Improve productivity and decrease manual errors
• Load price lists automatically
• Remove errors in routing
• Share rates, destinations, etc with billing
  system
• Better information in near real time
• Changes in traffic volumes
• Negative or low margin traffic
• Identify non-optimal routing and overflow

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Questions?