Home News GVG in The Press CONTROL OF Telecoms, International traffic
CONTROL OF Telecoms, International traffic

CONTROL OF TELEPHONIC TRAFFIC :  A BOOST FOR DEVELOPMENT

Lack of visibility on international telephonic traffic is a matter for concern
The International Telecommunications Union (ITU), the United Nations organisation specialising in the ICT (Information and Communication Technology) sector, is more and more involved in creating a favourable environment thanks to the updating and coordination of policies and regulations, according to a number of priorities it has set as follows : to improve cyber security and urgent communications, to facilitate networks moving to the next generation and to reinforce capacity, especially in less developed countries and particularly those in Africa.  

The ITU is thus at the forefront of ICT as it defines and adopts the technical standards that have been set internationally and thanks to which companies in the sector can ensure the harmonious interconnection of users and equipment all over the world.         
Controlling the flow of international traffic is thus of major importance to the institution, as this control will result in the relevance of standards which govern the interconnection between countries and continents.  As remarked by Tim Kelly and Mark Woodhall of the ITU in their analysis of telephonic traffic indicators, traffic is the single most important factor of the Telecoms sector and the direction in which traffic flows enlightens us as to the social interaction and trade relations between countries.  Nevertheless, they draw our attention to the fact that an ever-increasing share of  traffic escapes ITU control and this, for several reasons :

-    Voice and fax traffic go through networks which are not managed by ordinary telephonic networks ; they go via internet, specialised lines or via frame-relay networks

-    An ever-increasing market share is held by carriers which are getting smaller and smaller and which are not obliged to disclose their traffic volumes to the Regulators

-    An increasing volume of traffic no longer goes through traditional billing but rather through other billing systems.  With the gradual replacement of traditional billing systems by systems founded on cross-border interconnections, traffic statistics are set to become more and more difficult to obtain as well as less and less reliable.  

This lack of visibility of traffic volume is of great concern on the African continent which reflects one of the world’s highest growth rates in the number of users – between 2005 and 2009, this figure  increased by more than 300% with the estimated number of users at close on 500 million.

As the continent is also one of the main points of departure for immigrants to Europe and the USA it is easy to discern a higher flow of traffic going in the direction of Africa, impacting on the telephonic budget balance linking them to the rest of the world.  In fact the flow of telephonic traffic towards Africa correlates directly to that of money transfers which, according to the World Bank, tripled between 1995 and 2003 and which continue to increase steadily.  The proportional increase in telephonic flow is also due to the fact that each money transfer is accompanied by a telephone call or an SMS whereas the converse is not true.  

Therefore, whilst Africa’s incoming telephonic traffic is rising significantly, its visibility is decreasing in substantial and alarming proportions!  It is therefore – more than ever – a matter of urgency for  African Governments and the ITU to be equipped with the technical and institutional structures that will enable them to improve traffic visibility and management.

Setting up an intelligent interconnection management system in order to secure greater visibility of international traffic

In order to remedy this situation and ensure that role-players in their respective countries benefit fully from the telephonic boom that Africa has witnessed over the past ten years, certain of the continent’s Governments have decided to equip their countries, through the intervention of their Regulatory Authorities, with a system to manage and supervise international incoming traffic.  This system, supplied by the technical operator Global Voice Group and called the IMS™ (Interconnection Management System) enables Regulators to manage domestic traffic, to conduct audits on international traffic and to trace all international incoming traffic immediately, thus contributing, at the micro level, a technical solution to the important macro issue of the ITU.

Better still, this state of the art system for the intelligent management and supervision of international incoming traffic is extremely effective in the fight against fraud, which is totally out of hand in Africa and which benefits only certain factions to the detriment of Governments and legal operators.       
The success of this system obviously necessitates : an upgrade of existing infrastructure ; updating the Regulators on the new technology (NGN, or Next Generation Network) ; the setting up of a regular benchmark mechanism in order to stay at the forefront of technological developments ;  and the efficient operating of infrastructures in countries where basic infrastructure (electricity, internet etc) is only very limited.   

 

 
In spite of these factors it is necessary to maintain a profitable ARPU (Average Revenue Per  User) for operators without increasing the costs to local consumers, to attract and protect investment in Telecommunications by guaranteeing a positive ROI (Return on Investment) against capital risk and to reach a consensus with local operators in a win-win partnership which aims to generate a positive Telecommunications budget balance.      
With this in mind, certain countries such as Algeria, Morocco and Tunisia have re-evaluated their markets by curtailing entry charges to 19 and 20 Euro Cents, while Cuba is still at 55.10 Euro Cents.
Certain countries of Sub-Saharan Africa also undertook to maintain a positive telephonic budget balance with the rest of the world by re-evaluating their entry charges : this is the case for example in Gabon where 20 Euro Cents has been set and Ghana where a charge threshold of 19 USD Cents came into effect on 1 March 2010 ; 32% being accredited to the NCA (National Communication Authority).
In clearer terms, this means that charges authorised on entry can no longer be higher than these new thresholds (but can go higher according to the wishes of local operators) which have the advantage of keeping the telephonic budget balance positive and of stabilising prices on the wholesale market which was previously subjected to dumping practices on the part of certain role-players.  


This price differential arising from the difference between old tariffs (unstable) and the new tariff (charge threshold) is not only not a tax but furthermore does not in any way imply heavier charges be these for the operator terminating the call or for the user who is making the call ; it’s about an optimal redistribution of profit margins between the speculative players in the Wholesale market of call terminating, the Government and the operators which terminate  their calls.  This  differential  is also added to the revenues of the operator terminating the call in that he now has a minimum guaranteed revenue (Revenue Assurance) contrary to a situation where prices and the market were at the mercy of uncontrolled dumping.


This new approach is all the more beneficial as it complies in essence and literally with the Melbourne Conference which is a document of reference giving the freedom to all sovereign nations to adopt the Regulatory framework which suits them and is in accordance with their vision, as stated in its preface : Melbourne Conference, International Telecommunications Regulations (ITR): « While the sovereign right of each country to regulate its telecommunications is fully recognized, the provisions of the present Regulations supplement the International Telecommunication Convention, with a view to attaining the purposes of the International Telecommunication Union in promoting the development of telecommunication services and their most efficient operation while harmonizing the development of facilities for world-wide telecommunications”.


Installation of the automatic system to detect and fight against fraud
The re-evaluation of the entry tariff threshold may  instigate certain fraudulent players already engaged in this illegal practice, to take part in a fraudulent ‘feeding frenzy’ to the detriment of those Governments who have already installed the IMS™ system.  Fortunately, Global Voice Group’s intelligent interconnection management system is in fact an integral solution comprising an element which detects and automatically interrupts fraudulent activity.  In this regard, it is worth noting that the fight against fraud is one of the great success stories of the system.  In order to illustrate this point the case of the Republic of Guinea will suffice, where in the four months since it has come into effect, the system managed to detect and disconnect more than 16,000 fraudulent lines, to cite but one example.  In Gabon, more than 100,000 anti-fraud calls will be effected every month and indications are that 90% of fraud will be eradicated on the grey routes in this country following the first trimester of its effective application.


Additional revenue for Governments and telecoms operators
All these achievements in the fight against fraud have added to redistribution (which remains, it must be acknowledged, unbalanced in favour of the Wholesale market players) along the value chain of the wholesale market indicating positive perspectives for Governments but also and especially for the operators who stand to benefit the most from these achievements.  Because in effect, are the legal operators not the first who would suffer from grey routes ?  Would it not, once again, be the operators who would endure the negative effects of abnormal price fluctuations on the Wholesale market if nothing was done by the Regulatory Authorities to stabilise market prices?  

 
Given this  drive to streamline and with the objective of putting the Government of Ghana on the path of modernization thus allowing the country to record a positive telephonic  trade budget, the Minister of Communications Mr Haruna Iddrisu announced, according the Ghana Press Agency (GNA), that the Government of Ghana intended to establish this year a centre for the verification of international incoming calls.  According to GNA, the Minister believes that «if this is done correctly, the Government will generate an additional 50 Million US dollars per annum on international incoming calls”.
This additional revenue, it should be noted, would derive mainly from fixing a threshold tariff on wholesale prices for termination of calls made to Ghana which as from 1 March 2010 will go from 0.08/0.09 USD per minute to 0.19 per minute with the difference being split between the Government and Ghana’s operators.  This revenue will be generated by the substantial eradication of fraud on international calls, thus allowing operators and the State to maximise – quite rightly – their respective billing systems.     

By the same token, the Minister of Posts and Telecommunications in charge of New Technologies in the Republic of Congo, Mr Thierry Moungalla stated during the inauguration ceremony of the Centre for the Control and Supervision of International Traffic that since its two months in service, the centre has generated 1,8 billion FCFA – approximately 4 Million USD.
All of which, by reducing their dependence on international aid, serves to assist Governments in facing up to their sovereign duties.

Jean Pierre Regis, Telecoms Specialist


 

 

Optimize your Governance

 

World Leader in Telecom Governance Technologies