Choosing Quality over Least Cost Routing provides Better long term value

Why Least Cost Routing is too expensive
AurorA has operated in the International Telecommunications market since 1994. Since that time the telecom landscape has evolved and transformed and the pace of change has accelerated. The liberalization and deregulation of telecoms since the 1990’s, the move to native Internet Protocol (VoIP) and the deployment of fiber optic networks spanning the globe have driven voice termination prices steadily downwards. Per Telegeography, the annual CAGR for International Telephony between 1983 and 2007 was 15%; if we now include Skype and other OTT apps international voice traffic is still growing over 15% per year. People still want to talk with friends, family and business associates overseas.


Choosing Quality over Least Cost Routing is is the central philosophy at AurorA. In our view the concept of Least Cost Routing (LCR) for international voice traffic is outdated, ultimately more expensive and leads to substandard business outcomes. Choosing the highest quality termination, i.e. a direct route that passes true Calling Line ID (CLID), actually leads to better value and over a longer period of time, higher revenue and lower overall total costs.


The factors behind this philosophy are a) Total revenue and cost versus a simple rate per minute b) the importance of a superior Dial Plan c) Mitigating fraud exposure d) working with like-minded carriers in the industry to reduce fraud


Total Revenue and Long Term Costs versus Simple Cost per Minute
Direct costs are lower if you choose premium quality over a cheaper but lower quality route. The LCR way will lead to call failures and trouble tickets. Customers will complain. The cost of chasing trouble tickets can be substantial as well as the re-routing necessary until the faulty route is fixed. Customer service staff to take the calls and service technician costs will increase. These costs can quickly eat up the lower rate per minute of the cheap route.


Secondly, only a small percentage of customers that experience poor quality or call failures will actually complain and take the time to put in trouble tickets. The silent majority will simply stop using your service and use an alternative. They will, however, complain internally to their management team about the poor experience which degrades your brand.


Top-line revenue will then also decline over time, initially from customers not using your sub-quality voice service, but further once your organization develops a reputation for poor quality. The maxim “How you do one thing is how you do everything” describes that phenomenon. Customers will not renew, or would look more favourably on competitors offerings. One poor niche allows a competitor an advantage and an avenue to exploit.


This is especially true if your customers are enterprise or business customers. Commercial customers demand excellent quality from your entire service offering. International voice termination may be only a small fraction of your portfolio but if they cannot rely on the calls completing each time, every time with superb “pin drop” audio quality than it would reflect poorly on the rest of your service offering.


Insist upon the highest quality, premium international voice termination. The penny pinching of using an LCR is not worth it, and over the long run higher revenues and lower costs accrue from providing superior quality service to your customers.


A Superior Dial Plan is essential
Route guides for terminating traffic used to be simple; there was a rate per country to terminate a call to a landline telephone and maybe, maybe a second rate to terminate a call to the new cellphones. There were less than 300 lines on the spreadsheet.


Now, there are carriers whose A-to-Z rate sheet can offer thousands of pricing codes; still the landline rate with perhaps some other routes to major cities and a breakout now for each mobile carrier in the country but there are also an increased amount of expensive premium rates that are a potential risk for fraud.


In Canada and the U.S. in the 1990’s there was an explosion in the use of 900 or 976 numbers to offer premium services at a high per minute call rate that would be charged to the caller on their phone bill. Examples included weather reports, psychic hot lines and especially adult (phone sex) chat lines. The high per minute rates could lead to large phone bills very quickly and scammers would use all kinds of tactics to get people to call these numbers as they would get a split of the revenue from the phone company for each call. Consumers and businesses smartened up and blocked 900/976 number and eventually the Internet came and killed that particular market.


Overseas countries still have premium numbers and they live on through various names; Special Services, Non-Geographic Numbers, Universal Numbers, Telematic Services. etc. These numbers are premium in that usually they are at least ten times the rate of normal termination. They can have some legitimate applications; for example non-geographic numbers refers to a remote number, not tied to a physical destination such as if I wanted a Cyprus number to ring to my cellphone when I was elsewhere so my Cyprus customers could reach me.


They can be used for darker purposes though, through a scam called International Revenue Sharing Fraud (IRSF). In IRSF, the carrier in the far end country that owns the number ranges, leverage blocks of numbers they own by applying higher rates and assigning them to resellers outside of the country. Then hackers obtain these numbers, attack PBX’s and IP PBX’s and then machine generate calls. They then share the burst of revenue generated with the carrier in the country that owned these numbers providing a quick source of cash.


So how can you protect yourself ? It comes down to your own dial plan. You want to make sure that you don’t allow access to any premium numbers with such creative names like those listed above. When choosing what international carrier to use to terminate your traffic with, beware of those whose dial plans are riddled with such premium ranges, even if they seem to have low rates otherwise. It may be an arbitrage ambush. If they have many more premium pricing breakouts that do not exist on other carriers rate sheets you should avoid them like the plague. It doesn’t take many calls to the premium numbers to swamp any anticipated savings from using their “low” per-minute rates.


This is where an LCR that routes only based on a cheap per minute rate can get fooled by hidden premium ranges in suspect dial plans.


Mitigating Fraud Exposure
International Telecommunications has become a high volume, low margin industry. That is why we believe that you should trust your traffic to a partner who provides value beyond simply completing calls at “the lowest rate” via LCR. That approach can actually cost you big time ! You want a partner who provides high quality service and is motivated in protecting you and your customers from fraud, because even a single money-losing event is one too many and can wipe away any per-minute savings in an hour.


There are numerous sophisticated telecom fraud schemes in the world. Some have been around for decades, others are new and improved. The estimated global telecom toll fraud is US$38 billion in losses per year. The CFCA, Communications Fraud Control Association, cites telecom fraud as the #1 fraud committed outpacing identity theft, IRS fraud and credit card theft.


What can we do to mitigate and minimize the losses to the criminal gangs and hackers ?

  • Identify suspicious traffic
  • Provide alerts
  • Block the suspicious traffic (while ensuring customer doesn’t reroute call to next route on LCR)
  • Maintain a database and continue to block previous identified fraudulent destinations
  • Ensure a meticulous, accurate worldwide dial plan


Dial Plan ? How does my A to Z route guide help mitigate fraud exposure? Well let me go through the list and explain.


The global network carries hundreds of billions of voice minutes on an annual basis by wholesale carriers such as Tata, Orange, T-Systems etc. Using Big Data and AI, these carriers can detect suspicious call patterns and trends. Even with the size and complexity involved, this takes place in near real-time. Once detected, an alert is promptly sent to the affected customer.


At AurorA we go a step beyond that by pro-actively blocking the suspicious traffic stream immediately upon the alert (for all of our customers). Blocking, however, is only part of the solution. To keep your route guide from automatically going to the next choice, the proper non-routable ISUP/SIP release code is sent to indicate fraud blocked numbers so that it doesn’t just propagate through the route guide.


By maintaining a database of fraud events, we can also pro-actively block specific numbers/ranges where fraud has been detected before. Traffic is then monitored for any call attempts made to known fraudulent numbers as well as to any unallocated number ranges.


Calls to unallocated numbers may be fraud as well. A reseller may make a deal with the number range owner, usually in a low volume, high cost destination for exclusive rights to certain of these number ranges. Often they are called premium or “special” . A regular report of call attempts made to blocked numbers can be a warning sign of criminals testing your network, to see if calls complete to their chosen fraudulent numbers.


The key is to ensure that your dial plan is constantly up-to-date with current worldwide numbering (updated weekly) and that you avoid using carriers that have a plethora of such premium or special number ranges on their dial plans. Further safety can come by pro-actively blocking high-rate destinations where you know that your end customer base has no call volume to.


AurorA is a member of the i3Forum
In 2007, eight of the world’s leading carriers set up the i3Forum. It was initially meant to expedite the international telecommunication’s industry to IP but has since broadened its mission. The i3Forum’s approach is open, simple and pragmatic and it aims to;

  • Represent : the views of the International Carrier Ecosystem
  • Bring together : focus on topics that require joint work and collaboration across the Ecosystem
  • Transform : enable and facilitate the role of carriers in the timely emergence of new ecosystems, and new technical, operational and commercial models
  • Guide : publish recommendations for industry Stakeholders
  • Share : foster cooperation and sharing of best practices between industry stakeholders
  • Educate : contribute to the industry learning on these topics
  • Inform : provide market research, case studies, position papers…


The i3Forum now has 29 members including such major carriers as AT&T, iBasis, Telefonica, Orange, Tata, T-systems, Vodafone and others.


The i3Forum has a roadmap and focuses on a few key topics that require industry collaboration . The one that is near and dear to AurorA’s heart is the Fight against Fraud.


Fraud in international telecommunications is a huge and growing issue. Hackers and criminal gangs now make more money from Telecom Fraud than they do selling illegal drugs. It is an issue that cannot be resolved by any one single carrier; we need to work together as an industry to combat this scourge.


I am honoured and humbled to say that AurorA International Telecommunications Inc. has been accepted into the i3Forum as a member, specifically as a “Friend of i3Forum” . AurorA believes and supports what the i3Forum is trying to accomplish, especially in the Fight against Fraud. I hope to be able to get information, updates and best practices and also be able to contribute where I can. On social media and on its blog, AurorA promotes the i3forum and its objectives.


At AurorA we insist upon serving you with the highest quality, premium international voice termination. The Six Sigma philosophy highlights that the penny pinching of using a LCR is not worth it, and over the long run higher revenues and lower costs accrue from providing superior quality service to your customers


Choose to use a quality, reputable carrier who you trust with your overseas calls.


If you have any further questions, please feel free to contact us. This post is an aggregation of some of the material on our blog that you can find here

Also, a thank you to Robert Benlolo of Tata whose expertise in this field has provided me with guidance.

This article first appeared as a LinkedIn article here

2019 Canadian ISP Summit – Day 4

Day 4 ? But the conference only ran from Nov 4 to 6 ? How could there be a Day 4 ?

Well when you are self-employed like I am it takes a full day AFTER the conference just to try to get caught up. There is the large backlog in the email inbox, phone calls to return, meetings to attend.

There is the followup from all the social media posts. I made the commitment to blog each day of the Summit, and really appreciate that you readers took the time to follow along on my website and left great comments on my Facebook, LinkedIn and Twitter feeds.

Finally, there is the followup from the pile of business cards that I came home with. I will connect with you all on LinkedIn and Twitter, and send you some details on AurorA and Amitel to remind you that when you need something “International”, contact me, “Your Friend in Telecom”.

Looking forward to next year’s Canadian ISP Summit, Nov 2 to 4, 2020, the 10th anniversary edition.

Election Day

Today is finally the day of the 43rd Canadian Federal General Election. I am sure we are all exhausted from the campaign to date. This post is not about “who to vote for” nor an exhortation to go out and do your civic duty. Rather it is a short summary of some topics specifically related to telecom and technology in general in Canada that are really important to our future prosperity that I don’t think were discussed much in the platforms and debates.

Innovation
Canada’s future prosperity depends on innovation. The Council of Canadian Innovators say Canada’s “productivity is lagging and our future economic prosperity is at risk”. Entrepreneurs that create start-ups and grow scale-ups need an environment that encourages them to grow and scale here in Canada and allow them to compete globally. They need skilled talent (engineers, and also designers, marketers, sales professionals and executives), growth capital and access to markets and customers.

Canada produces a lot of world class talent in our universities and colleges and we need better incentives to keep them here as opposed to going to the USA for higher wages and more attractive opportunities. We need a mindset shift towards the entrepreneurs that are shouldering great risk to build innovative companies in Canada with tax measures supporting innovation, venture funding, employee stock options etc. Plus we need a Federal government that can attract attention to our innovative companies here, even to the extent of procuring products and services from them .

5G and Huawei
The next generation network is being built right now, globally and here in Canada. 5G is transformative, not just a faster network, but also providing lower latency and opening up a host of new use cases especially to power the Internet of Things (IoT). Autonomous connected cars are just one example. We are going to see all sorts of devices connected to our networks, direct machine to machine communications, that will demand security levels beyond what we currently have.

There is an ongoing debate worldwide, prompted by our Five Eyes national security partners Australia, the United States, the United Kingdom and New Zealand over whether equipment from Huawei, a technology vendor from Communist China, should be allowed access to our networks. The Huawei debate is also part of a larger debate about Canada’s relationship with China, a country that does not have the same norms and values as Canada. This was not addressed at all during the election campaign, yet it is vital to our future.

Connectivity (Rural , Remote and Financial)
Access to the Internet is not a luxury, it is a necessity in the modern economy. We need to ensure that all citizens have reliable access to high speed broadband Internet. There is an urban/rural divide for sure, but this issue extends well beyond that. We need connectivity for rural areas; as an example, much of modern agriculture relies on internet technology now. We need connectivity in our remote areas such as the Arctic as well as Northern Ontario , Northern Quebec, Labrador. Of course so that people living there can participate in the modern economy but also as an extension of our sovereignty. With the changes in sea ice happening in the Northwest Passage we should also be looking into laying undersea fiber cables through the passage to provide another route connecting Europe to Asia. Finally, connectivity also means affordability . There are people in urban areas who are not online because they cant afford it. This digital gap also needs to be further addressed, especially for school age children who need the Internet for their school work.

I will be staying up late tonight watching the election returns as I am a political junky. Even though these issues were not front and centre in the run-up to todays election, I hope they will be addressed in our next Parliament as our future really does depend upon it.

Global Internet Phenomena

Sandvine produces the Global Internet Phenomena Report

It seems that each year that I went to the Canadian Telecom Summit, one of the highlights was Dave Caputo, the former CEO of Sandvine, giving a presentation with pearls of wisdom from their Global Internet Phenomena Report. That annual report was also then quoted in many other presentations as the authoritative source for what was happening on broadband networks around the world.

For example, back in 2012, Sandvine focussed on Social Networking and reported that Facebook was one of the top 4 applications on the Web and that over 50% of mobile devices communicated with Facebook each hour !

The 2019 Global Internet Phenomena Report was just released by Sandvine on Sept 10. Sandvine, a Waterloo company (forgive me some local cheerleading) has unparalleled visibility into the Internet industry with an installed base of over 2.5 billion subscribers worldwide across over 160 Tier 1 and Tier 2 fixed, mobile, WiFi and satellite operators. (note that China and India are not included in this data set)

So what is changing in how the world uses the Internet ? A lot !

Video is obviously king, but in ways that keep changing and evolving. Netflix led the way with streaming but now we are seeing more and more competitive streaming services; Amazon Prime, Hulu, YouTube and new ones coming from Disney, Apple, CBS and others. The big traditional cable and telco companies have been fighting back, trying to stop cord cutting with their own streaming offerings and video on demand.

How many different services will a consumer buy to replace their cable ? What do they do if the content they want is not on the services they are buying ? Well, the answer may be in this report as Sandvine is seeing a resurgence in BitTorrent traffic. The release of the final season of Game of Thrones on HBO , or the blockbuster movie Avengers:Endgame could be seen in the increase in BitTorrent traffic.

The big players in Web 2.0, the ones whose shares currently dominate the global stock markets are the FAANG ; Facebook, Apple, Amazon, Netflix and Google. Would it really be a surprise to find out that they also dominate the traffic on the Internet ?

Some other highlights from this edition of the report include:

  • Video is over 60% of the total downstream volume of traffic on the internet.
  • Netflix is 12.60% of the total downstream volume of traffic across the entire internet
  • Google is 12% of overall internet traffic, driven by YouTube, search, and the Android ecosystem.
  • Gaming traffic and gaming-related bandwidth consumption is increasing as gaming downloads, Twitch streaming, and eSports go mainstream.
  • BitTorrent is over 27% of total upstream volume of traffic
  • Facebook applications make up over 15% of the total internet traffic in APAC.

The report includes spotlights on the traffic share leaders for video, social networking, messaging, audio streaming, and gaming.

If you are interested, you can get a download of the report here

Eat your own Dogfood

What is the best way to know your customer’s needs ?

Over the years I have developed very close ties with my customers. I like to say that at AurorA and Amitel I do business with “Friends and Family”. The best way I have found to really know my customers needs is to actually become a customer of theirs.

It is a variation on the concept of “Eating your own Dogfood” where employees are expected to use their own products and services as a way to understand its real world experience. By using my customers services, I have some skin-in-the game and really get to know my customers intimately.

Over the years I have bought SIP Trunks, DID’s, Internet Services, Voice Termination, PRI’s, T-1’s, and more from a wide variety of my customers. I have also been happy to refer prospects to them, looking for the same types of services that I’ve been buying myself. I feel confident in recommending a service if I actually use it myself and can honestly vouch for it.

The best part is that all of these companies are part of the competitive telecom and internet landscape, competing against the oligopoly. We are all in the fight against Big Telecom together.

So the next time you need a telecom service, look to your customers first. If it is something that they don’t provide, contact me ! If it is not something that AurorA and Amitel provide directly, I would be happy to recommend one of MY customers to you as I am probably using their service already myself.

Why do you hate your service provider ?

Unhappy woman with Thumbs down

Here is a fun experiment; Google industries or companies with the worst customer service. Any guesses at what industry comes out on top ?

Outside of government, telecommunications leads by an overwhelming margin with an Ipsos survey in 2018 having 38% of the US population saying this sector has the worst customer service in the country. (Healthcare was next with 18%… quite the drop)

Leading the top 5 industries most hated by customers according the the American Customer Satisfaction Index ? Cable Providers, Internet Providers and Wireless Phone Service Providers.

“Hated industries. You know the ones—the industries that customers avoid dealing with as much as possible. The places customers go out of their way to avoid talking to or interacting with. These are the companies that have bad reputations of dishonesty and not treating their customers fairly. The sad part is that most of these industries are nearly unavoidable, which means at some point, customers have to take the plunge and interact with them.”

Do you think this only applies to the USA ? Nope, it seems to be just as prevalent in Canada according to the Huffington Post, where telecom had the worst reputation among all industries in Canada. Even worse than oil companies !

So why do people love to hate their telecom service providers ? Could it be a combination of
– High Prices
– Unreliable Service
– Poor Customer Service
– Slow or unreliable products/services
– Time and effort to resolve issues via contact centres
– Unhelpful agents
– Surprise Extra fees, charges, overages
– (add your 2 cents here)

This is not new. I have spent my entire adult life in this industry , I’ve been in telecom for over 36 years since graduating from Engineering at UWaterloo with almost all of it spent on the competitive side. The side challenging the oligopoly , the handful of companies that control over 90% of almost every telecom service market in Canada; TV, Internet, Phone etc In those 36 years it has been a constant refrain I heard from consumers, friends and family.

Since Canadians love to hate their service providers, why don’t they demand better ? Why not support the competitive players that are challenging the oligopoly that are providing better service, at better prices with innovative products ? Why not demand more ?

Or is it just more fun to complain ? What do you think ?