Interconnection Billing in OSS/BSS

We now know and understand after the previous article how mobile network operators operates billing and charging systems within its own network. But what if we need to connect to another mobile network operator? What also if that mobile network operator is not in our network but in another network. How does billing and charging work then when we use the network of our rivals? This is Interconnection and it is essential to have an Interconnect firstly at the hardware - network level. Here, though we will be focusing on how OSS/BSS Billing and Charging systems work for Interconnection.

Telecom Mobile Network Operators send and receive calls/SMS from one Mobile Network Operator to another. This activity of sending/receiving data in the form of calls/SMS from one Mobile Network Operator to another is called as Interconnection. The Mobile Network Operators involved in the interconnection need to track the amount of data that gets interchanged between their networks and to that end they need some sort of Billing mechanism working at the OSS/BSS level.

How does Interconnection Help?

  • Interconnection enables communications between different Mobile Network Operators and this enables customers to get in touch with people on other networks.
  • Interconnection helps enable competitive entry in the communications market for all and this in turn leads to telecommunications access/universal service.
Any new entrant in the Mobile Market place will face a lot of opposition from incumbents and to ensure that the playing field is leveled for all players, the WTO has created some regulations to which all telecom operators need to adhere to. WTO regulations ensure that:
Interconnection needs to be provided with all suppliers under non discriminatory terms, rates and quality no less favorable than those provided for its own services. The procedure applicable for Interconnection (RIO) should be made publicly available.

How  Does Interconnection Work?

The first level of Interconnection happens at the network level where switching of networks happens at the MSC - Mobile Switching Center level. These points are also called as the POIs : Points of Interconnect. Next, it enters the Interconnection layer and here the Interconnection Rates are applied as per the Interconnection agreement between the two Mobile Network Operators involved. Finally the processes of Billing and Reconciliation occurs and the accounts are settled. 

How Interconnection Rates are calculated?

Interconnection Rates are the rates that the operators need to pay to access network of other operators and these are usually under the purview of the market regulator. The main methods of rating for Interconnections are: 
  • Percentage of retail rates
This method ensures that the new entrants are provided a level playing field and are assured that they will be able to compete with the incumbents for the market share. But this method hinders the lowering of price and ensures preserves the inefficiencies of the incumbent.
  • Fully Allocated Costs
In this method, the total cost of providing service is divided by the volume of the service provided by the operator who is to be charged. This method ensures that the incumbent controls the service and in a way, it also controls the pricing.
  • LRIC : Long Run Incremental Costs
The best method amongst these is the LRIC. LRIC calculates the cost of providing an additional unit of service over the long run. Since the analysis is a forward looking analysis, it is the most accurate one and avoids the pitfalls faced by the other two. Newer variants of this approach are being researched and debated upon.
  • Bundled and Unbundled Charging
The prices of Interconnection can also be charged bundled or unbundled. Bundled means that irrespective of the use, the operators which avail the facilities from the incumbent will be charged for all the facilities that the incumbent provides. Unbundled means that the new entrant pays only for the services and charges that it uses and nothing but that.

Billing and Reconciliation

At the end of the Billing Period, the Invoices and the Payments that are generated are sent to the respective parties. If for some Mobile Network Operator, its partners need to generate both: Invoice as well as payments before the adjusted amount is generated. Next, the CDRs that are generated at both the Terminating and Originating partner ends are compared. This process is called as Reconciliation.

RIO : Reference Interconnection Offer Compliance

A Reference Interconnection Offer compliance is a document that is present with all the Mobile Network Operators you have an Interconnection with. This document lists all the different charging policies, taxes, revenue etc. that are levied on the various calls. You need to be sure that the Interconnection Billing System that you are buying fulfills all the various requirements listed in the document.

How to choose the right Interconnection Billing solution?

An Interconnection billing solution should in essence replicate all the functions and options that the operators' billing solutions provides to it. This will help it charge and also work best with different Mobile Network Operators. Some of the most important factors that you require in an Interconnection Billing Solution are:
Compliance with charging policies of operators you work
  • Peak - Off Peak Rates
  • Rate per minute, Rate per second
  • Rounding Policies
  • Holidays/ Special Days in different regions
  • Multiple Currency
  • Interface to import data generated to accounting system
  • Ability to generate different types of reports
  • Method to identify calls should be known and compared in both systems
  • Web based view to help create transparency between all stake holders
  • Option to allow the partners to download CDRs and compare them
  • CDRs and system information needs to be very secure
  • Options for correcting the mistakes while rating should be provided


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