Losses Mount for Carriers as up to 50% of Invalid CLIs Remain Unidentified

Calling Line Identification (CLI) Validation can be one of the fastest and simplest ways to proactively tackle Origin Based Rating (OBR) surcharges and penalties. As a growing number of carriers see OBR impact their margins, they can use global number intelligence to quickly decide if they want to reject traffic with invalid CLIs or transit the traffic and price accordingly. Either way, the traffic must be correctly identified to mitigate losses from future surcharges and disputes.

Between May and August 2020, an XConnect Number Information customer deployed number intelligence to address OBR in 6 key markets where they were seeing penalty charges apply.

Across multiple markets in Europe and the Middle East, mobile network operators (MNOs) are charging significant mobile termination rates for invalid A-Numbers or CLIs. Carriers are also being notified that higher rates will be charged for invalid CLIs, in a range between 7-euro cents per minute to 83-euro cents per minute. On average, this rate is 35-euro cents.

Increased termination rates reduce margins that are already under pressure and make it difficult for carriers to deliver traffic in specific markets.

How Big is the Problem?

Statistics from the deployment revealed that a total of 8.34% of traffic across the six markets observed had invalid CLIs. Here is the percentage of traffic with invalid CLIs per destination over the 4-month period:

Throughout this timeframe, we didn’t see any reduction in invalid CLIs. This is a clear indication that the problem is ongoing, and carriers need to find a way to tackle it. At the same time, OBR surcharges and penalties are only going to grow as it is deployed in new markets and MNOs increase termination rates to recoup losses. 

To mitigate future OBR losses, carriers have to successfully classify CLIs and there are different scenarios that they have to address:

  • No CLI: This is easy to validate. Our data shows that less than 5% of invalid CLIs had no CLI.
  • Incorrect Country Code: This is fairly easy to confirm. Our data found that approximately 1% of CLIs had an invalid country code.
  • Wrong Number Length: This is a more complex challenge that requires global number range intelligence to validate. We found that nearly half (45%) of CLIs were the incorrect length.
  • Unallocated: This requires high-quality number range intelligence. We found that 30% were from unallocated number ranges, signifying potential fraudulent traffic refiling.
  • Unknown Number Range (the range was not positively identifiable from national regulator data): This requires high-quality number range intelligence. Our data showed that 20% of CLIs were unknown.

Nearly all carriers are capable of checking for “No CLI” and “Incorrect Country Code”, with just 6% of traffic being identified with these factors over the 4-month period of the study. Some carriers are able to validate CLIs through length checking (45%), but most carriers cannot identify unallocated or unknown CLIs, which accounts for 50% of invalid CLIs. That is a massive blind spot that will impact a carrier’s bottom line.

For example, we published a case study about a Tier 2 carrier operating across Europe and the Middle East using our global number intelligence for CLI validation in Germany. So far, the carrier has saved nearly £120,000 in margin, which is even more than we predicted. The carrier has been able to prevent significant losses and gained a return on investment (ROI) of 300% in just four months. It has also prevented drawn out disputes with customers and suppliers, which have been known to take six months to resolve previously.

Managing Risk and Increasing Profitability

CLI validation increases the profitability in voice businesses and reduces risk. Carriers just need the right data sets and a partner that can help them to expand their existing data with new global number intelligence. As the case study points out, the ROI makes the business case for global number intelligence straightforward, especially when that example was only focused on a single market. 

Carriers can deploy XConnect’s database of allocated and unallocated number ranges across the globe and ensure that their traffic is delivered with accuracy and precision, no matter the market. We regularly update, refine and optimise our data to ensure that carriers do not have to manage data themselves, and can easily apply it in their operations. Our global number intelligence brings together a number of data sources including national regulators, international regulators and other operators’ data sets, so carriers don’t have to.

Together with our carrier partners, we understand their specific challenges, analyse traffic, and enable them to expand their data sets and efficiently address OBR losses now and in the future.

Get in touch today to learn how we can help you remove the risk from OBR, increase your margins, and deliver traffic with accuracy and precision.

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