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Arbinet-thexchange Year 2003 in Review

Arbinet-thexchange Posts 14th Consecutive Quarter of Growth
with Membership up to 298; Minutes Increase 57%

New Brunswick, NJ – January 13, 2004 – Arbinet-thexchange, the full-service trading solution for buyers and sellers of voice minutes, said its 4th quarter was its 14th consecutive quarter of growth. Trading was up 57%, at 7.9 billion minutes in 2003, compared to 5.0 billion minutes in 2002. In addition, Membership on thexchange has grown to 298 Members, currently trading at an annual rate of more than 9 billion minutes, powered by the company’s record 775 million minutes in December.

Thexchange completed a series of initiatives in 2003 to expand the geographic coverage, scope and scale of the Company’s services to improve Member profitability.

Geographic Coverage

Launch of Frankfurt Exchange Delivery Point Expands Access to Members

In May thexchange introduced a virtual Exchange Delivery Point (vEDP) in Frankfurt/Main, Germany. From there Members can trade on the London EDP without incurring long-haul transport cost. Central to the advantages the Company offers the world’s telecommunications carriers is the proposition that a single connection to thexchange allows a Member to trade with all other companies on thexchange.


SelectRoutingsm Retail Solution for Premium Traffic Delivers Bilateral Quality

In September thexchange introduced SelectRoutingsm. SelectRoutingsm pre-qualifies retail quality routes and extends thexchange’s benefits of liquidity, price improvement and centralized settlement to this segment of Member traffic. It assures the stability and performance of routes through pre-testing for seven consecutive days against quality benchmarks and through ongoing performance checks that continuously verify the route’s Select status.

Thexchange simultaneously introduced a number of platform improvements to thexchange’s core service, now called PrimeRoutingsm. These included enhanced order entry, delivered ASR matching and routing prioritization by TQIsm, thexchange Quality Index.


New Packet Switches Double Throughput Capacity

Thexchange enhanced trading capacity when it installed new packet switches in the New York and London EDPs in March. Thexchange can now process more than twice the number of busy hour call attempts (BHCA) compared with just one year ago. The physical footprint of the new platform is 32 square feet. A similarly configured legacy switch requires 1,600sf. This allows the Company to expand to new physical locations at a greatly reduced cost.

Patent Pending Call Screening Processor Improves Switch Utilization; Will Be Used to Allocate Call Attempts to Sellers

The lack of intelligence in traditional TDM switch architecture requires a trial and error method to complete calls. This process wastes expensive switch processing power, causes signaling congestion and ties up voice trunk capacity. In June, Arbinet-thexchange introduced a capacity management system that uses an innovative call screening processor in conjunction with signal transfer points (STPs) and external databases. It analyzes metrics such as the number of call attempts that succeed versus the number returned. Unmatched calls are released back to senders after a database lookup and before these calls consume switch CPU.

The call screening processor will also be used to throttle call attempts to sellers which have limited far end capacity and for those sellers who simply wish to cap the volume they receive from thexchange for a particular route.

Management Commentary

“In 2003 we focused on delivering added capabilities to help Members streamline their voice businesses,” says J. Curt Hockemeier, President and CEO at Arbinet-thexchange. “This year we will continue to develop new ways Members can leverage thexchange to create savings. Our mission is to help carriers manage voice more profitably.”

About Arbinet-thexchange

Two processes central to all telecom companies are selling access to their networks and routing calls off their networks to destinations worldwide. Arbinet-thexchange has created the liquid market and designed and built the world’s most advanced routing system to automate anonymous minutes trading between telecom companies. Nearly 300 Members use thexchange to reduce their cost of service, improve route quality and expand revenues by reaching new markets without extensive network build out.

A Member inputs trade parameters and the system automates sales and purchase order execution, complex calling code matching, call routing to specific breakout destinations and manages the quality of service of traded capacity. The system also handles the credit risk management, billing and commercial settlement aspects of these transactions. Arbinet-thexchange also distributes spot market transaction data that provides carriers with reliable pricing, quality and routing information for use in planning and negotiations. These products include: AXCESSCODESM calling code breakouts and AXCESSRATESM spot market price and quality data.

For more information, visit Arbinet-thexchange at

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