Interconnect Billing: The Business Process Chain

In the constantly changing scenario of the telecom market,
interconnect revenues are becoming imperative for all service providers in
calculating and billing correctly. This is achieved by an interconnect agreement
which stipulates technical and accounting requirements for a service provider.

In today’s deregulated telecoms market, interconnect
charges can account for up to 90 percent of a telco’s operating costs and can
earn significant revenue for network operators. Interconnect settlements and
billings have become critical operational activities for telecom operators. Yet
less then 15 percent of all telecoms worldwide have an accurate interconnect
billing system.

Telecom operators (basic service providers of telecom)
interconnect their respective networks to carry their traffic over each other’s
network. The interconnect billing system basically should provide a mechanism to
calculate the amount receivable from and payable to other carriers, generate
reports for the same and prepare a reconciliation statement.

Business Process Chain

One of the main objectives of this article is to cover the
entire business process chain within the interconnection business. As such, we
start with the application provides modules which interface to switches, which
constitute the start of the process, as well as the accounting systems, which
constitute the end of the process.

The typical inter-carrier billing (ICB) product in the market
does not support the entire interconnect business process chain and usually
falls short of producing invoices and financial transaction. They also lack the
ability to deal with multiple Call Detail Recorder (CDR) formats in a smooth and
consistent manner.

Core Business Processes

The primary business processes of ICB are formatting, rating
and consolidation. The formatting process provides a syntactical check on the
CDRs to ensure that they are correct for rating. The consolidation process
summarizes the CDRs into daily and billing cycle summaries for the purposes of
forecasting and billing respectively. The rating engines should design to cater
to the worldwide interconnect practices as the agreements between operators in
different countries vary significantly. It is quite common for companies to move
from one style of rating to another as the telecoms market matures in its
business practices. It is therefore essential that operators can support such
moves without major modifications to their applications.

Competitive Analysis

One of the most crucial aspects of ICB is the wealth of
information available to the users. This information or data is not generally
available in other billing systems such as retail billing. In addition, ICB
systems are concerned with which operator the calls come from or go through,
which switches and point of interconnects are used and what other network data
such are route (or trunk) was used to complete a call. The network information
is invaluable in assessing the volume of business conducted at particular nodes;
whether these nodes should be maintained, abolished or new ones built; what the
least cost routes are; who the best/worst interconnect partners are and should
new partnerships be established.

Information such as the above and more is available in the
ICB database through Decision Support Systems.

Flexible Summarization of Traffic data

As agreements change between operators, so does the need for
traffic summarization and billing. ICB should allow operators to define or
change the summarization parameters required for an agreement at multiple levels
of detail. Users can work with the appropriate level of information, as defined
by the agreement to incorporate changes without any development effort. An
example of this is if an operator does not want Switch or PI information to be
provided in the billing summaries but would like them incorporated into the
traffic analysis or daily summaries, then they could define the structure of
these two areas differently.

Reconciliation, Justification

An operator must be able to stand behind the invoices they
send to their interconnect partners and justify each figure that is being
presented. This is required for purposes of defending hostile audits and any
inquiries or disputes raised by other operators. By the same token, for invoices
that an operator receives from their interconnect partners, they must be able to
reconcile any differences with the figures that they have generated and
therefore expect in the incoming invoice. These are two separate processes as
the invoices and the structure, and order of the data that is exchanged by the
operators, can be different. ICB should offer the ability to exactly replicate
an invoice that has been received from an operator and ‘drill down’ to the
CDR level for invoice verification and justification.

Accuracy and Audibility

The monetary amounts involved in ICB are often very high.
Therefore operators must ensure that their calculations are accurate and be able
to account for each call that comes through the system.

Finance and Cash Flow

One of the most important aspects of any business is cash
flow. In order for an operator to ensure that payments are monitored, received
and documented, an effective financial module has to accompany a product. ICB
should have accounts receivable module to ensure that interests are accrued
where payments are delayed and through the accounts payable module, operators
can introduce netting if they don’t want to send and receive payments for each
monthly bill. This subsystem also should allow netting (invoices sent and
received which result in Moines owed), partial payments, taxes, interests and
adjustments.

Medida Koteswara Rao, Satyam
Computer Services