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Why outsource Interconnect Billing?
Publication: 11.10.2007
Many telecoms companies handle their own interconnect reconciliation as a legacy from past times when the industry was significantly simpler and when maintaining the billing system was little more than a routine task.
A changing market
Today, most national telecoms markets are infinitely more complex than they were even ten years ago – and most countries are governed by a national telecoms regulator which does not work to any specific industry standards or have any inhibitions when it comes to changing the structure of the telecoms market.
As a result, the interconnect business, 90% of which will typically be generated nationally, is likely to consist of an ever-changing array of fixed line operators, mobile operators, MVNOs and carriers. The tendency towards deregulation, which is apparent in the telecoms market worldwide, means that the structure of each national industry is constantly changing, with new small niche companies on the increase.
Optimise your revenues
The pressure this constantly-changing scenario puts on the billing system is the first and best argument for outsourcing.
Billing systems are notoriously difficult and expensive to reconfigure and, increasingly often, planned changes can be obsolete before the patching and upgrading process has been completed. Far better to devote the resources available to maintain the billing system to ensuring that the billing of commercial and domestic subscribers is trouble-free and move complex third-party billing issues elsewhere.
There are strong financial reasons for outsourcing interconnect business too. It is generally accepted that, on average, the level of unreconciled CDRs reaches 4-5% each month for most operators. The significant and avoidable financial loss which arises as a result is a second strong justification for outsourcing.
It is, perhaps, curious that the outsourcing of interconnect business should be so far behind the roaming business when the key principles and the rationales are broadly the same – yet the vast majority of operators outsource roaming and retain interconnect without any sound financial or operational reasons for the latter.
MACH has made great strides in this area and, in the next article “Outsourcing Interconnect – the Service Bureau Model” we explain how – and why.
