Arbinet-thexchange debuts advanced calling
code management for members to solve multi-million dollar industry problem
NEW YORK – January 12, 2001 –
Arbinet-thexchange, the full service trading solution for buyers and sellers
of telephony bandwidth, has implemented an advanced international calling code
management program on thexchange. Thexchange is averaging over 255 changes in
international codes each month due to deregulation worldwide and explosive
growth in wireless services. This program addresses the potential financial
impact of code omissions and errors for thexchange members. Financial losses
occur when carriers cannot terminate calls to new codes, undercharge customers
for premium services, or operate with non-competitive cost structures on routes
due to lack of information about low cost termination options. Arbinet-thexchange’s
trading platform rationalizes data from over 600 sources, including our 100+ members,
government regulatory agencies, PTTs and other sources worldwide to define more
than 4,000 precise breakout codes to 700 destinations globally – more than twice the
number used by most carriers.
Thexchange estimates that calling code confusion currently costs the world’s telecom
carriers hundreds of millions annually. This situation is becoming more difficult for carriers
to manage as the number of network operators continues to increase as countries deregulate
and encourage competition. This is giving rise to increasing numbers of calling codes and
tariffs for fixed, mobile and audio text services.
Code errors cause carriers to lose money for three main reasons. First, carriers
often cannot terminate calls to recently implemented codes globally. Second, many do not
go to the trouble to break out city destinations from “proper” codes (a “proper” code
allows a carrier to complete calls within an entire country, but typically at a higher
cost than city breakouts). The result is buyer pays more than necessary for call terminations.
Third, many carriers routinely send high priced mobile traffic over standard agreements hoping
calls will be completed at the lower priced fixed termination rate. The seller that accepts
this traffic loses money-in most cases at least $0.10 per minute.
Thexchange has developed the industry’s most up-to-date and comprehensive code
intelligence, which is revised bi-weekly and is available to members. This data is used to
define markets, and to program thexchange’s trading engine and switching platform to ensure
that buyers and sellers match up exactly on the specific types of service they agree to buy,
sell and deliver on thexchange. This has several key benefits for members:
Buy side: Arbinet-thexchange lowers a buying member’s cost by filling
orders in real time at the per-call level, with the lowest cost termination available in the
market at the specified price ceiling and quality parameters. Because codes are matched by
proprietary software at the per-call level, thexchange is able to identify and route individual
calls to specific destinations globally onto special low-cost termination breakouts posted by
selling members. For example, Arbinet-thexchange recently enabled a member to breakout its
aggregate India traffic into city terminations, immediately saving the member $3,290 per
T-1 equivalent of traffic per month.
Sell side: Arbinet-thexchange insulates a selling member from the financial
risk of code mismanagement and fraud. Thexchange’s software again examines codes at a
per-call level and will only allow traffic that exactly matches a specific sell order a
member has posted in the market to be sent onto the selling member’s network. Calls
destined for higher tariff breakouts such as mobile codes are blocked unless the selling
member has entered a specific ask order for this route. For example, a Tier-1 carrier
that recently joined thexchange decided not to post sell orders for mobile code termination
to European destinations. This member is now able to post very competitive rates for
standard fixed termination, leveraging it’s extensive international infrastructure,
without having to build in an allowance to cover the cost of any high priced mobile calls
that may be routed onto its network by buyers.
“The global telecommunications market is becoming much more complex as a result
of the explosion of new carriers and codes unleashed by deregulation,” stated Curt Hockemeier,
Arbinet-thexchange President and CEO. “Developing the world’s best international calling
code intelligence is core to what we do. It allows us to protect sellers through price
and code differentiation and at the same time deliver the lowest prices to buyers by
automatically routing to city breakouts where they exist.”
Arbinet-thexchange has produced a detailed white paper that examines the
complexities and risks associated with managing calling codes in today’s deregulated
global telecom marketplace. For a free copy please e-mail a request including your
name, organization and title to Jan-Joost Rueb, thexchange’s Manager of Information
and Trading Products at [email protected].
Arbinet-thexchange is the full-service, online exchange for on-demand transactions, automated
physical delivery and settlement of trades of telephony bandwidth. Thexchange is neutral,
favoring neither buyers nor sellers, and allows participants to trade anonymously. Automated
delivery is accomplished by employing advanced trading software and a set of patented
processes to link the web-based trading platform with carrier-grade telecommunications
switching equipment. Arbinet-thexchange handles all invoicing, collection and payment for
trades effected on its exchange and provides continuous monitoring and online rating of the
service quality of each seller’ s network.
Arbinet-thexchange estimates the total global market for telephony bandwidth measured in
minutes at $706 Billion in 2000. This market is characterized by both falling prices and a high
level of SG&A; expense, which at 25% of revenues is 9% higher than the U.S. corporate average.
Use of Arbinet-thexchange’s full-service, automated trading solution helps members cut costs
and maintain profitability by providing the opportunity to generate incremental revenues, as well
as lowering the cost, risk and transaction time required to complete transactions for telephony
bandwidth. For more information, visit Arbinet-thexchange at www.thexchange.com.
120 Albany St. Tower II, Suite 450, New Brunswick, NJ
phone: 732-509-9100, fax: 732-509-9101, website: www.arbinet.com