Company Adds London Exchange Delivery Point and Quality First-Routing, Introduces AXCESSCODESM; Minutes Exceed 750M for 4th Qtr.
NEW YORK – February 26, 2002 –
– Arbinet-thexchange, the full-service trading solution for buyers and sellers of voice minutes, enabled its members to trade 1.78 billion minutes in 2001. The Company said minutes grew a minimum of 42% sequentially each quarter in 2001 and the 4th Qtr., at 768 million minutes, was 61% greater than the 3rd Qtr. At the end of the year members were trading an annualized run rate of 3.4B minutes, powered by thexchange’s first 50M minute growth month in October and 284M minutes transacted in December. Membership grew to 150 at year end.
New Exchange Delivery Points Give Expanded Access to Members
In January, 2001 the Company inaugurated service on a Nortel Global Service Platform (GSP) in London. This replaced the virtual point of presence Arbinet-thexchange had established in October, 2000, which the Company had used initially to backhaul U.K. and European telecommunications traffic to its first Exchange Delivery Point (EDP) in New York. In December of 2001, members exchanged 34M minutes through the London EDP or almost 12% of all spot market minutes. The London EDP is connected to the TANET ring.
The Company also announced the purchase of a third switch, at 611 West 6th St. in Los Angeles, with first EDP service scheduled for 1st Qtr., 2002. The EDP will have connectivity with the 1 Wilshire “meet-me-room” to allow fast access to thexchange services.
Inter-EDP Interconnection Creates Single, Worldwide Exchange
Central to the advantages Arbinet-thexchange offers the world’s telecommunications carriers is the proposition that connection at any EDP provides access to all other members of thexchange, regardless of where those members themselves are connected. This network, as an example, allows Asian members to connect in Los Angeles and sell to London or New York-connected members without establishing their own expensive Asia to Europe or Asia to North America interconnections.
As the Los Angeles EDP comes on line the Company said it will give members a choice of trading in the worldwide spot market (inter-EDP) or restrict their trading to their home EDP.
The Company also said that in the 4th Qtr. it purchased redundant, diverse capacity for its inter-machine trunks (IMTs) between London and New York and that New York to L.A. IMTs would be similarly protected. This type of redundancy and diversity is common in telecom networks but is a first in a telecom voice minutes exchange environment.
Introduction of Quality-First Routing, MarginMaxSM Designed to Improve Margins
Beginning with the introduction of the Company’s on-line trading platform in August, 2000, all Arbinet-thexchange trading was routed first on price, then on quality. Responding to member requests, thexchange developed quality-first routing where answer seizure ratio (ASR) is the primary matching criterion for buy orders and price is the second determinant. This enhancement was introduced in August and gives members a choice of matching method by route. Attesting to the success of the new optional routing method, today a majority of traffic on thexchange is specified quality-first matching.
MarginMaxSM was introduced in September as a desktop utility to give members the ability to use quality, as well as price, to maximize their margins on wholesale voice traffic. MarginMaxSM compares prices and completion ratios of two different suppliers and points the buyer and MarginMaxSM user to the supply that produces the greatest margin.
AXCESSCODESM Becomes Standard for International Calling Codes
Arbinet-thexchange has an on-going dialogue with regulators, PTTs, regulatory bodies and thexchange members – more than 1000 sources – who provide the input for thexchange international calling codes. All members trade using these standard codes. Now, as a service to members and non-members, the Company offers the AXCESSCODESM international calling codes database and bi-weekly updates. Updates are available to subscribers on-line in PDF and CSV file format. Importantly, the revised AXCESSCODESM database is time stamped to eliminate confusion about the timing of rate or code changes. AXCESSCODESM now contains 8,237 codes for 238 countries and 1,520 termination destinations. A unique feature of this database is its “Unique Market Identifier” (UMI), which assigns an alpha destination to each destination for easy identification. As an example, the UMI for cellular traffic in the United Kingdom is UKM. Similarly, all proper destinations are codes with an “X”, UKX for UK proper traffic, for instance.
AXCESSCODESM subscribers avoid the labor-intensive, manual data collection that is characteristic of the maintenance of an international calling codes database. This is an ongoing requirement and thexchange averages 175 changes every two weeks in its updates.
Management Commentary
“The industry problems thexchange solves only became more acute in 2001”, according to Curt Hockemeier, President and CEO of Arbinet-thexchange. “In this environment we shielded our members from a sea of bad debt and reduced their working capital requirements by paying 15 net 15 – not the 74 days the industry has traditionally experienced. Arbinet-thexchange made it possible for sellers to monetize unused capacity and for buyers to purchase the lowest cost terminations through the spot market”, Hockemeier said.
Bob Barbiere, Senior Vice President of Trading at thexchange, said, “Our members are routinely packing their switch ports and local access facilities with an average of 250K to 300K minutes per T-1 a month. Some are achieving 700K minutes per T-1 a month. This means they need to spend less capital for TDM switching and members are achieving operating efficiencies which contrast sharply with legacy one on one interconnection economics.”
About Arbinet-thexchange
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.
120 Albany St. Tower II, Suite 450, New Brunswick, NJ
08901
phone: 732-509-9100, fax: 732-509-9101, website: www.arbinet.com
