Stopping Origin Based Rating Losses on Call Termination in Germany

Stopping Origin Based Rating Losses on Call Termination in Germany

A Tier 2 carrier operating across Europe and the Middle East selected XConnect to help it to stop future losses resulting from Origin Based Rating (OBR) on its voice traffic in Germany. The carrier was concerned about new surcharges that have been introduced by Mobile Network Operators (MNOs) in the country and wanted to ensure that they would be able to maintain margins. They hadn’t received a bill with surcharges yet but needed to take proactive measures to manage their risk and protect the business.

 

OBR makes it necessary for voice operators to account for both the B Number (Destination Number) but also the A Number (Calling Line Identity/CLI) which defines the Origin Country when rating and routing calls. Cost differentials between different Origin countries vary, but also calls that are presented without a valid CLI are charged at the most expensive rate. These rates can vary from 1-euro cent per minute to 35-euro cents per minute depending on the destination and origination countries.

 

The carrier was aware that its traffic could start contractually incurring the surcharges but needed to take action to stop potential losses before they lead to disputes. XConnect worked with the carrier to identify its potential margin losses and use data to stop OBR from impacting its bottom line.

The Challange

German mobile networks introduced OBR on two networks on March 1st, 2019 and a major network on April 1st, 2019. Instead of a single rate for all traffic, the cost of termination to German mobile networks was based on originating country and the carrier could face rates between 1-euro cent for traffic from EEA countries to 35-euro cents for ‘Invalid CLIs.’

The customer is carrying a medium amount of traffic terminating in Germany and it had no option to simply avoid the market. Its German traffic is critical to the carrier’s business as it originates from a primary carrier partner where a swap deal is in place. If it can’t terminate the traffic, it could threaten other revenue streams.

With unpredictable rates, the carrier faced a significant risk of ‘under-pricing’ the cost of calls to its customers and incurring significant losses. Typically, these losses would not be visible until they received the surcharge bills, often many months after the traffic was carried and regular bill applied. The analysis of the traffic showed that 12.7% of calls had invalid CLIs and could incur the surcharge of $0.35c. These losses would amount to more than $100,000 per month, on only a few million minutes of traffic to German mobiles and generating a typical wholesale margin of just a few thousand dollars a month. Therefore, the OBR losses could wipe out any gross margin, and create a massive loss.

It could implement pricing to account for declining margin but offering uncompetitive rates would lead to losses of traffic from customers. Nor could it bill the customers for surcharges, as it could not identify which calls would be impacted and what rate. Trying to pass on the surcharges would only likely create billing disputes requiring time and legal resources with an unknown outcome. The carrier needed a way to take control of the traffic it carries and remove its risk from OBR.

Solution

The carrier came to XConnect after realising the risks on its traffic due to the contractual introduction of the OBR charges and were shocked by the possible losses it would accrue. XConnect worked closely with the carrier to understand its challenges, analyse its traffic, and build a business case from addressing its OBR losses. The team at XConnect gave the carrier a report showing where its losses were coming from and how much it could save by using telecoms data to take control of its traffic.

XConnect helped the carrier to deploy its OBR management solution based on XConnect’s ‘Global Number Range’ (GNR) data. GNR data is a database of all allocated and unallocated number ranges globally. It is created and updated from a number of data sources including national regulators, international regulators and other operators’ data sets. The database is continuously ‘stress tested’ through analysis of XConnect and other partner traffic streams to maintain a ‘real world’ view.

“We’re experts in using telecoms data to solve challenges and enable carriers to increase profitability. We make it simple to understand the scale of the problem then take action to remove OBR losses from a carrier’s profit and loss sheet. Ultimately, telecoms data is helping carriers to increase their sustainability and health of voice business across the globe.”

Eli Katz, Founder and CEO, XConnect

When receiving a call for Germany, rather than routing directly to the terminator the ‘call’ is sent to the XConnect platform via a standard SIP trunk which includes the A Number, B number and all other SIP header information. XConnect determines if the A number is ‘allowed’ and valid according to its GNR database.

 

XConnect analyses the call, and with minimal latency, returns a SIP 503 which causes the carrier’s network to route to the terminator for that call and the call is completed. If the A number is not a valid CLI (and could thus potentially incur the surcharge rate), XConnect returns a SIP 607 (a SIP response value chosen by the customer) which causes the customer network to reject the call back to the originating customer. 

 

The solution looks to the customer like any other terminator, so no changes were required in the customer’s network, routing system or billing system. Importantly, due to the ultra-fast XConnect systems and multiple locations globally, the additional delay was well within reasonable carrier-grade parameters and had no impact on call routing and termination. It was deployed in 15 days and offered with carrier-class reliability, scalability and support. 

 

 The results were an immediate reduction in the risks of the substantial surcharges from OBR in Germany, increased margins and the ability to offer customers accurate pricing.

Benefits

Cost-Savings

In one month, the carrier saved approximately $137,000 using global numbering intelligence

Predictable Margins

The carrier was able to carry traffic with confidence and benefit from predictable margins when serving new business demands

New Visibility

XConnect was able to give the carrier visibility into OBR losses and provide a business case for taking action

Greater Control

The carrier was able to gain control over the traffic it carries, price its services accurately and grow its business in Germany

Expert Support

XConnect supported the carrier every step of the way from assessing losses through to building a business case and implementation

A Simple Activation

XConnect made it simple for the carrier to implement in its voice routing architecture, with no changes and standard configurations, to use new data sets to solve challenges and prepare its business to combat losses from OBR in markets across the globe

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