VoIP and International Call Termination

Welcome to the second in a series of articles about the issues and opportunities in the international call termination business for VoIP players. This second article focuses on some of the issues VoIP providers face when terminating to mobile operators in Europe as number portability takes hold. Although there is only one strictly compliant way to terminate a call to a mobile operator in many countries, the current reality is that two variants exist, each with different commercial models and pricing. The first method is via official interconnects – either TDM or VoIP based – with the destination mobile operator. This type of interconnect provides full, PSTN quality termination with full feature availability, including correct delivery of the "calling line identity" and support from roaming calls. The drawback, however, is that in many countries, the terminating provider must pay an officially regulated interconnection fee. The second, unofficial method VoIP providers use to terminate calls to mobile operators is via SIM card-based, VoIP gateways. These gateways originate calls into the mobile network using a wireless connection, with special low rates offered for calls made to customers on the same network. As such, each channel in the VoIP gateway acts as an individual mobile phone making calls to other mobile phones on the network. Termination costs are lower, albeit with reduced feature functionality such as an incorrect or missing display of the caller's number. Many thriving businesses provide call termination based on this method, and they all bill the calling carrier based on a defined set of codes that "belong" to the destination mobile operator. One could argue that whenever there is an ongoing difference between the cost of using service normally available in the country – for example, retail SIM cards – and an official interconnect rate, service providers make use of the difference; in many countries this has reached the point where there are two parallel services. The Impact of Number Portability Number portability is a growing reality in many parts of the world, with porting rates ranging from a small percentage in some markets, to almost 50 percent in countries with flexible porting and contract rules. When mobile subscribers port their numbers from one network to another, the original mobile network treats that call as "out of network" and either rejects the call, or connects it at a much higher rate – obviously an untenable answer for the SIM card operator in a highly competitive business. So how does portability add to the complexity? Carriers charge each other based on a defined set of network codes, and ported numbers are exceptions to those codes, which are normally invisible to the carriers involved. So, a carrier buying Vodafone termination, for example, sends all calls matching the Vodafone network codes to the SIM card operator. That operator cannot connect the calls to numbers ported away from Vodafone, and either rejects the call because it is not "on-net" or it simply fails – resulting in lower quality and dissatisfied subscribers. An Intelligent Routing Solution One viable solution to this quandary is to route calls based on the knowledge of which mobile carrier "owns" the number at the time of the call. Most SIM card operators can actually carry a call to a number that has been ported into their network, even though the code range doesn't match up as expected. This means a Vodafone supplier can terminate calls at the Vodafone rate to numbers ported in from Orange, for example. The trick is to be able to segregate the ported calls, and route them to the correct operator rather than to simply rely on the original code set. With this type of routing intelligence, and a simple commercial agreement with the carrier, a provider can answer more calls, improve the customer experience and increase revenue at one stroke. With average rates of portability, a provider can increase its call-connect rate by over 20 percent, a very significant improvement in customer satisfaction and revenue. In addition, the performance is much more predictable over time, which helps with the commercial and operational management of these VoIP interconnects. If you are interested in learning more about the issues of portability, www.globalnumberportability.org provides further information on the impact on international wholesale traffic. IP Steve Heap is chief technology officer for Arbinet. He can be reached at sheap@arbinet.com