Arbinet-thexchange’s CreditWatchsm Management System Provides Bankruptcy Insulation for Members
New York, April 17, 2002 – The Telecom sector has lost more than 75% of its value this year resulting in the shedding of 500,000 jobs, and many carriers remain exposed to hundreds of millions in bad debt and uncollected revenues. In response, Arbinet-thexchange has been shielding its 160 Members behind a “bad credit firewall” called the CreditWatchsm management system-an integrated credit risk management and billing system that limits Members’ bad debt exposure while providing a streamlined, secure and efficient marketplace for wholesale voice minutes transactions.
“Our Members tell us they are having a difficult time doing new business with other carriers, and through CreditWatchsm now routinely refer smaller prospects to thexchange,” explains Bill Haner, senior vice president worldwide sales for Arbinet-thexchange. “Members outsource this business because they know that our systems allow us to better manage the credit risk, billing and collections work that oftentimes is created when dealing with smaller prospects.”
Thexchange’s CreditWatchsm management system automatically suspends traffic if a buyer exceeds its pre-set line of credit.
“The reality today is as underlying minute volumes continue to grow, so does supply volatility,” states Curt Hockemeier, president and CEO of Arbinet-thexchange. “Telecom carriers are having to spend more time evaluating buyer credit, and are eliminating some supply sources over concerns about stability.”
The four key components of the CreditWatchsm program are:
Thexchange’s Member agreement contract and systems architecture allow the netting of purchase and sales balances in real-time.
Thexchange clears Member trading balances twice-a-month, further reducing the size of any account balances.
Buyer balances are underwritten either by GE Capital Commercial Services or are secured by deposit.
The CreditWatchsm system automatically warns and then shuts down a Member’s ability to buy as it approaches and then reaches this secured credit limit.
The CreditWatchsm system monitors a Member’s net trading balance in real-time and sends e-mail alerts as the Member crosses the 50%, 75% and 90% thresholds of its available credit limit.
Two processes central to all telecom companies are selling access to their networks and routing off-net traffic to destinations worldwide. Arbinet-thexchange has created the spot market and designed and built the world’s most advanced system to automate anonymous minutes trading between telecom companies. The world’s leading telecom carriers use this system to perform dynamic least cost routing via the spot market to reduce their cost of service and expand revenues by reaching new markets without extensive network build out.
Thexchange’s 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. Currently more than 160 Members are using thexchange to process calls at a four billion minute per year run rate. Arbinet-thexchange also develops and distributes AXCESSCODESM international calling code breakouts, the standard market reference tool. For more information, visit Arbinet-thexchange at www.thexchange.com.
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phone: 732-509-9100, fax: 732-509-9101, website: www.arbinet.com