With mobile operators currently juggling a record high of international roaming traffic, the necessity of countless wholesale roaming partnerships around the globe becomes evident. These methods bring a not-so-insignificant level of complexity and often lead to extensive manual calculations, especially surrounding areas of discounting.
This dilemma is well expressed by William Oliver, Senior Director of Product Management at Syniverse. “You’re generally dealing with monthly billing towards each other on wholesale roaming prices. But if a discount is agreed, it necessitates the operators to calculate the actual discount they need to allocate to each other’s roaming traffic,” he elaborates. Oliver points out that this process can be very time-consuming. “It could be a quarter after the end-of-year period before the settlement for that discounted traffic sees completion. Consider multiplying that process by 500 or 600 roaming partnerships – that’s a colossal workload!”
Such inefficiencies in the process can potentially cause significant disturbances to an operator’s cash flow. Many operators employ the concept of ‘netting’ to alleviate these disturbances, which determines the difference between two parties’ roaming bills, and remunerates solely the net value. This system arguably halves the number of transactions while reducing their individual sizes.
However, Oliver contends that this concept can be expanded even further, particularly in Syniverse’s case, by introducing ‘multilateral netting’. This process accounts for the net fees owed across an extensive network of operators, each with their customers roaming on each other’s networks. “We’re then able to work out, with substantial accuracy, how much each will need to pay each other at the end of the settlement cycle. We can take the funds incoming to an operator and utilise them to diminish their outgoings. It’s an especially effective method of optimising cash flow,” Oliver maintains.
Oliver points out how important it is for roaming departments to assume responsibility. “It’s the roaming department’s obligation to protect their most precious assets – company cash flow.”
In fact, by extending the process beyond mere roaming bills, that is, to also encompass additional payments between operators, the effectiveness of multilateral netting can be further enhanced. Billed items might include SMS interworking, IoT discounting, application-to-person (A2P) messaging, Rich Communication Services, and Billing and Charging Evolution (BCE).
Notably, the volume of transactions under Syniverse’s management is colossal, with their system settling nearly $4 billion annually, processing a staggering 140,000 invoices monthly.
For those who wish to understand more about maximizing their roaming potential, Syniverse’s webinar ‘The five secrets to scaling wholesale roaming profitability’, scheduled for September 14 at 3pm, should prove highly informative.
The matter of maximising one’s roaming potential is an increasingly relevant topic, as evidenced by recent news such as Verizon’s impressive $2.1bn Managed Network Services deal with HCLTech, and Cisco’s buy-out of Telenor from Working Group Two JV. Indeed, we even have Poland’s ‘largest ever’ broadband subsidy receiving 300 applications.