Welcome to the last edition of Evolve for this year. Here we are as tired old 2007 totters to the end of its life and the lusty babe that is 2008 clambers out of its cradle eager to take on anything that the world can throw at it.

2007 has been quite a year but one in which the global comms industry has continued to shrug off the very last vestiges of the recession that began way back in 2000. Overall this year has been one of optimism and controlled, planned and sustainable rather than runaway, ad hoc growth.

And all the indications are that, despite the sub-prime rate crisis in the US that is now beginning to have an effect on the financial and credit sectors in other parts of the world as well, telecoms looks to be well-placed to weather the storm. Most industry observers believe that investment in major infrastructure projects will be uninterrupted and that the global mobile industry will continue to prosper as India, China, South America and Africa provide the growth as mature markets begin to plateau. That surely augurs well for us all and should be the basis of confidence, optimism and hope going forward.

And now, back to the present! In this edition of Evolve we take a close look at the challenges telcos face in the Interconnect billing and settlement arena as the world moves towards all-IP next generation networks.

It's hard to over-emphasise the importance of this issue. In the old days when Interconnect agreements were concluded between just a few incumbent national carriers, things were pretty straightforward. But in the brave new world of cut-throat competition and upstart new entrants keen to destabilise the status quo, Interconnect agreements are complex, multilateral webs that are subject to constant revision and Interconnect rates change and change again.

Elsewhere in this Evolve are the results of our very latest readership poll in which we asked "When was the last time you had reason to contact your telecoms provider about an inaccurate or unclear bill?" As you will see, some of your responses were unexpected and the survey makes for some interesting reading. Not surprisingly though, the majority of respondents make it very plain that even one incorrect bill can result in them taking their custom elsewhere and churning away to another service provider. Accuracy is everything!!

Meanwhile, Cerillion recently played a major role at the Billing OSS & BSS Latin America event that was held in Rio de Janeiro in Brazil. It's a hard job but somebody has to do it and our Director of Pre-Sales manfully stepped forward to chair the conference and guide it through the shoals and reefs of convergence, accurate billing, triple-play services, systems architecture and organisational change and into the placid waters off Ipanema beach. You can find out all about it in this edition of Evolve.

And last, but by no means least, you can take a look at the premiere of the new Cerillion corporate video! Made by the skilled team at Telecom TV, our new video covers highlights of the Cerillion product suite, the unique value of our bundled component approach, an analysis of the drivers behind the increasing complexity that characterises service delivery today, and testimonials from some of Cerillion's customers.

As Martyn Warwick, the Editor-in-Chief of Telecom TV says, "It makes Ben Hur look like an epic!!"

And with that, all it remains for me to do is to wish all our customers and suppliers, readers and viewers wherever you may be a peaceful and prosperous 2008. We'll be back again in the New Year.

Rising to the Challenge of Interconnect Billing

In its simplest terms, interconnection between telecoms operators enables voice, video or data traffic to pass across two or more telecoms networks. This is of course a critical technical requirement, enabling a consumer of voice, data or video services on one network to link up with a user on another network.

It is also a crucial financial issue for many telcos as interconnect can account for as much as 50 percent of the total ongoing operational costs of a typical telecoms operator today. With market deregulation, the consequent arrival of many new entrants and the rapid growth of multimedia services such as video streaming over mobile phones, for example, proactive handling of the relationship with interconnect partners has become critical to sustaining competitive advantage.

Telecoms operators are therefore increasingly demanding solutions which allow them to manage interconnect agreements to enhance overall profitability, while also enabling improved cash flow through accurate billing and prompt settlement.

Scoping the Challenges

The interconnect business involves operators receiving voice, data or video traffic from a third party, terminating it over their own networks and then billing the originator for the use of those networks. Operators were quick to work out the financial benefits of charging for transiting voice calls, video streams and data events. Over time, however, margins have fallen.

This has increased pressure on operators to maximise revenue-generating opportunities, not only by terminating traffic correctly but also by accurately billing for those terminations. This is often a complex undertaking involving the efficient management of significant data quantities.

Adding to this challenge is the fact that interconnect rates are constantly changing. These agreements have evolved significantly from the original long-term contracts, which parties would typically only review and modify once a year.

Today, it is common for such agreements to be continually renegotiated as new entrants break in to the market offering cheaper routes in a bid to compete with the incumbents. When one considers that a large PTT typically has around 200 interconnected operators, each of which is likely to refresh their rates every month, the scale of the challenge becomes clear.

A further obstacle is that operators are only informed about new rates late in each monthly cycle. Often they receive notice of a new rate on the last day of the preceding month so they invariably have to re-rate traffic very quickly in time for the new rating period.

Meeting the Challenge - Choosing the Right Solutions Partner

In order to meet these challenges, operators need to partner technology service providers with the necessary skills, expertise and solutions to guide them through the complex interconnect landscape. One of the most important qualities they need to look for in systems providers is market experience.

An in-depth understanding of how interconnect agreements are structured is likely to prove invaluable, especially if the provider has actively used that knowledge to inform the ongoing development of its key product offering.

Equally, they should look to work with companies, which offer a specialist interconnect capability. Many providers of retail systems claim that they can also carry out interconnect billing with these same systems. This is unlikely to be the case. In fact, the two functions are fundamentally different. Interconnect places entirely different demands on the rating engine compared to those posed by retail billing.

Interconnect systems typically need to manage a smaller number of billable accounts (in terms of their interconnect partners) but a higher volume of records associated with each account than would be the case in a retail billing environment.

Another key requirement is that the relevant system helps the operator become more flexible and efficient. It is, for example, a significant benefit if an automated rate loading facility, ideally providing a universal formatter for uploading partner tariff tables, can be provided. Such an approach typically reduces the time needed to maintain configuration data, gives greater interconnect choice and the ability to drive down costs and improve margins.

Cerillion's own Interconnect Manager solution additionally uses a unique system of call detail record (CDR) aggregation. This approach sorts incoming CDRs by a series of criteria such as partner name, destination, product type, size of call, time of day or date, point of interconnect and switch.

The resulting aggregates can be manipulated quickly and easily, allowing for high rating performance. Critically, this approach makes re-rating of an entire month's traffic possible within minutes, allowing almost instant analysis of the impact of alternate routes or newly negotiated agreements.

The best interconnect management solutions will also enable fast business decisions to be made by providing an up-to-the minute view of the status and financial exposure of all interconnect agreements. Such an approach speeds up time-to-settlement and typically has a positive impact on the operator's cash flow.

Equally on a more direct operational level, rapid decision-making is supported by incorporating least-cost routing and optimal routing functionality to allow for comparison of rate offerings from a range of current and potential interconnect partners and, by so doing, determine the best value route for each destination.

Looking to the Future

So what does the future hold for interconnect management? Operators today are becoming increasingly focused on how the emergence of next-generation IP-based networks, critical for the delivery of next generation multimedia services, is likely to affect their interconnect agreements.

For the time being at least, the de facto position remains the same with the traditional minutes-based interconnect model continuing to be used although solutions providers and operators alike should be prepared to move to a unit-based approach as time moves on and the uptake of IP-based technologies continues to grow.

Whatever transpires, it is certain that operators will continue to look to third party solutions providers to handle their interconnect billing, settlement and general management needs.

However, if they want to reap the full benefits that interconnect management can bring from improved cash flow and increased margins to enabling faster business decisions, operators need to ensure they are partnering with providers who can combine in-depth experience with the specialist interconnect expertise.

Dominic Smith
Dominic.Smith@cerillion.com

Cerillion Leads Prepaid-Postpaid Convergence Workshop in Latin America

Cerillion recently took part in the Billing, OSS & BSS Latin America event in Rio de Janeiro. Organised by IBC Brasil, and co-located with a Revenue Assurance & Fraud Management conference, the event is a focal point for the billing industry bringing together more than 150 delegates from across the Latin America region.

Neil Philpott, Director of Pre-Sales

Cerillion played a major part in the conference and exhibition, with Cerillion's Director or Pre-Sales, Neil Philpott chairing the main conference and guiding the presenters from North America and Europe, as well as across Latin America, through a packed agenda including topics such as convergence, billing accuracy, triple-play services, systems architecture, and organisational change.

As part of the main programme, Neil also led a pre-conference workshop entitled Developing a Strategy for Convergent Billing on Prepaid and Postpaid. This hot topic within the global billing community is now becoming a major issue for operators across Latin America, and Neil provided insight and expertise from Cerillion's own experiences to help steer participants through this complex area. Topics covered included:

• Prepaid and postpaid billing convergence benefits, issues, trends and solutions
• Identifying and prioritising the greatest challenges in billing convergence
• Defining strategies to overcome convergence challenges
• Designing an action plan to ensure successful deployment of a convergent billing solution

If you would like to find out more about the workshop or to see how Cerillion can help you to achieve your Prepaid-Postpaid Convergence goals, please contact us on: info@cerillion.com