Voice trading goes semi-automatic
John C. Tanner
The voice business isn’t what it used to be. It’s still growing in terms of minutes–somewhere in the range of 180 billion minutes worldwide as of last year. However, voice’s commodity status has also resulted in prices dropping so fast that volume growth hasn’t been able to make up the difference, curbing net revenue growth for the international voice business by an annual average of 7.3%, according to Telegeography.
Making things more complicated, says Christopher Grahn, CEO of Swedish telecoms software company Ascade, is the fact that the voice transactions business has become, well, more complicated.
“Fifteen years ago this wasn’t terribly complicated because it was mostly done by annual bilateral agreements between the big PTTs,” says Grahn, “but today it is much more complex.”
For a start, he says, thanks to market liberalization, there are far more carriers to deal with, from PTTs and carriers’ carriers to mobile operators and VoIP service providers, the latter two of which currently account for roughly 18% and 11% of international voice minutes, respectively, according to Telegeography. Consequently, rates are often offered in different formats –even destination definitions aren’t standardized. Meanwhile, information volumes are expanding, with risks including unilateral price-hikes on individual destinations being overlooked.
Also, the massive fiber network rollouts of the past few years have led to a surge in the number of routing options, while “least cost routing” principles are becoming obsolete as more carriers beef up their service portfolios with capabilities like SLAs and time-of-day routing.
The end result, says Grahn, is “confusion and heavy costs for everyone involved.”
Ascade has been working to solve this problem for the past couple of years with its “CarrierCockpit” solution, a modular BSS (business support system) that seeks to automate the voice trading process for carriers, which is typically done manually and thus is time-consuming, error-prone and costly.
CarrierCockpit can also push information, rather than simply aggregate it for the carrier to sort through, Grahn says.
“For example, if the traffic volume drops below a certain rate, the system can send an email to the network manager warning them of this, then he can call his counterpart on that route and find out what’s going on, rather than finding out about it in a report two months later.”
Ascade’s sales pitch has made slow but relatively steady progress since getting its first customer in early 2001. Eleven carriers now use its software–mainly in Scandinavia and Europe, but the company made headway in Asia last year with contracts from international carrier Reach and Singaporean cellco MobileOne.
The name of the game here is information transparency, which Grahn says is a major benefit to voice carriers of any stripe. “If you have a better understanding of the cost base, you can price your traffic better. Without that transparency, carriers are likely to price their traffic higher than they need to, which could be preventing them from selling more traffic. Even if you can save only a few percentages here and there, that’s still a lot of money.”
Much of this is already a selling point for bandwidth exchanges like Arbinet-theXchange and Band-X, but Grahn points out that bandwidth exchanges are outsourcing services.
“Most carriers use exchanges only for certain select routes,” he says. “Most carriers still keep their provisioning and routing in-house, so our solution is really more complementary to Arbinet’s service than competitive.”
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