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June 1, 2005
By Khali Henderson
This spring, two groups came forward to provide separate forums for mobile network operators to find each other to directly exchange traffic. The premise behind both is to provide a single interconnect for more efficient and higher-quality terminating voice traffic - and eventually content and messaging services.
In early February, Global Crossing Ltd. formally launched its Wireless Services Exchange (WiSE), a concept it floated among mobile operators since last spring. The carrier has appointed Simon Clayton-Mitchell, a 23-year industry veteran, as vice president heading up the effort.
Initially, WiSE will deliver international mobile-to-mobile routing with caller line identity (CLI) and point-to-point video with differentiated billing. The second release, to come later in 2005, will include global roaming exchange services (GRX), short messaging services (SMS) and multimedia messaging services (MMS).
“It looks very much like international services to these carriers today,” says Mike Leary, Global Crossing’s director of product management, wireless, noting that operators connect via TDM to WiSE where Global Crossing translates the traffic and takes it into its VoIP network. “Within VoIP, we can create a uniform routing cloud among all the different countries that we are serving, so the routing and service are the same in each country. There’s really no distinction between countries.”
The reason this is important - particularly for the European market where WiSE is first being launched - is that subscribers are demanding service transparency when they roam from country to country. “They are going to have services that are as similar as possible to what they use at home,” says Leary, explaining when they receive a call, for example, they will see the CLI, the phone number of the calling party, displayed on their phone, which they have come to expect in their home markets. In another example, he says they also will have rapid access to their voice mail boxes rather than having to execute an elaborate login process.
Leary says WiSE is intended to provide the capability for mobile operators to send all types of traffic over the same interconnect. In many cases, the wireless carriers in Europe do not have the ability to distinguish between calls that are being routed to a mobile operator and calls being routed to a fixed-line destination,” he says. “So, they just have to send all traffic for a particular country though this interconnect, so we will be supporting [wireline] termination as well.”
Leary says the carrier also is considering support for SMS, but has found the market crowded and has not decided whether to move forward with such plans. MMS is another decision entirely; it’s not a question of ‘if’ but ‘when,’ he says. “We think MMS is going to be an important aspect of international data service for mobile operators. We are focusing on when that will be and when the international transport capabilities will be required,” he says.
WiSE is just beginning to sign members. At press time in early May, none had been named, but Leary claimed to have two interconnects being configured, a third being installed and another dozen in negotiations. Of course, liquidity is key to the success of any exchange. “The whole concept is only as valuable as the number of carriers you can reach through it. …We think critical mass is on the order of 25 operations [in Europe],” he says.
Global Crossing’s pan-European network links 13 countries and potentially up to 44 mobile operators. Global Crossing’s international network delivers IP services to more than 500 major cities in 50 countries and supports a global VoIP infrastructure that currently handles up to 2.5 billion minutes a month.
While WiSE initial focus will be on recruiting European operators as members, Leary says the international carrier is not disinterested in the opportunity in the United States. He says for the near term, U.S. mobile operators are less concerned about creating service transparency for their subscribers traveling in Europe. “They haven’t evolved quite to the point of European operators when it comes to dealing with issues such as CLI delivery and service transparency across markets,” he says, noting that roaming within the United States is much simpler because the patchwork of carriers have adopted similar technical architectures and standards.
“We think there is perhaps more opportunity in the near term for European mobile network operators who have customers roaming in the U.S. because they do have that concern about CLI delivery,” he says. “The challenge of creating this ubiquitous CLI delivery capability for the U.S. is quite significant because of the fact that the U.S. mobile networks are many knitted together rather than a monolithic network.”
Global Crossing is rolling out such support in steps. First, it will offer termination to the States without CLI. Meanwhile, it is engaging U.S.-based GSM operators in discussions about working to support such capabilities.
Also in February, Arbinet Inc., operator of thexchange trading floor, launched mobile-on-thexchange, which, like WiSE, provides a single interconnection for direct routing between network operators for mobile-to-mobile, mobile-to-fixed and fixed-tomobile calls.
“We have looked at the mobile industry and gone to them with the same concept of traffic management and using an exchange to increase your profitability,” says Melissa Deep-Schmid, Arbinet’s managing director, mobile solutions. “What we found was the anonymous exchange model that we have had in the past wasn’t necessarily giving the mobile operator the type of quality assurance they require.”
So, she says, Arbinet came to the table with a service called Direct Access that enables mobile operators to send traffic directly to other mobile operators and fixed line carriers who are members of thexchange. “Creating an exclusive membership of network owners only will enable these mobile operators to exchange their minutes in a visible environment where they are assured of the type of quality they would expect to receive from another mobile operator.”
Arbinet operates a carrier-neutral voice transaction and settlement service, processing nearly 1 billion minutes of offnetwork fixed and mobile traffic for 340 carriers each month. Charter mobile-on-thexchange members include Telecom Italia, with 10 international subsidiaries in Europe and Latin America; Western Wireless, with eight international subsidiaries in North and South America, Europe and Africa; and Globacom, the mobile operator in Nigeria. Chris Reid, Arbinet’s vice president of marketing, told PHONE+ mobileon- thexchange has 19 mobile operators on board and several more agreements pending as of late April.
Deep-Schmid says in addition to quality assurance, members of mobile-on-thexchange can expect to raise ARPU, a common performance measure. “When a mobile operator sells their network access directly to the originating carrier, factors such as answer seizure ratio and average call duration consistently are increased, thus delivering more actual conversational minutes from the same amount of call attempts,” she says. “It delivers additional incremental revenue to a mobile operator without them having to roll out new services.”
Arbinet analyzed calls sent directly to mobile operators on thexchange versus calls sent to the same operators via a refile intermediary from July to November 2004. Direct routing increased calling minutes by 123 percent, according to the company.
Another by-product of joining an exchange is price transparency, which is key for regulators, particularly in European countries, says Deep-Schmid. “Using an exchange where you can sell your services to 360 operators enables them to show regulators that they are providing equal access to every operator at the same rate. What that will do is relieve the pressure the mobile operators receive [to reduce prices] because they keep reducing their prices but it has no effect on the market [because refilers are not under the same pressure].”
As with WiSE, there are no U.S. operators as members of mobile-on-thexchange. That likely will change as U.S. operators begin sending more traffic to Europe. For now, fixed line operators may be the most interested in connecting directly with mobile operators, says Deep-Schmid, pointing to the lopsided fixedmobile traffic balance between the United States and other countries. “We’ve had conversations with a number of the big U.S. fixed carriers that have told us that trying to get direct access into European mobiles is a priority for them,” says Reid.
As part of mobile-on-thexchange, Arbinet has formed a users group that is expected to meet in September to provide input on further product developments made possible by virtue of the interconnect to the exchange. On the table are supports for roaming, content, number portability, video telephony and SMS.
“What we are planning to build is something that supports any digital transaction required amongst carriers,” says Deep- Schmid. “When we do have extreme liquidity with mobile operators, it seems to me there is a very simple way to rework the way roaming is handled today.” That, she explains, would simplify what today is a manual process involving not only the operator but also a data clearinghouse, a financial clearinghouse and a third-party provider. “If you have everyone on a common platform, it seems logical to me - and the customers we have spoken to - that there is a way to rework that transaction so that it goes through an exchange and reduces the amount of manual processing and parties involved in settling the transaction.”
Similarly, she says, content providers could connect to thexchange and be able to provide operators with content in real time much like transactions in the Arbinet minutes market. “At the end of the day, I don’t think any mobile operator wants to have 300 relationships with mobile content providers if they could go to one aggregation source to gain access to those content providers,” says Deep-Schmid.
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