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08 February 2024

India (re)introduces 60:60 billing. Can you adapt to sudden changes in wholesale voice prices quickly and easily?

Operators in India have decided to adopt 60:60 billing for call termination in that country – at a stroke, introducing costs for consumers, but creating opportunities for carriers. Is this an isolated move? As it turns out, no.

In this post, we’ll explore recent market moves, give a quick refresher on 60:60 – and incremental billing in general.

India has jumped – and this move has already led to a reaction. In at least one country, a Tier 1 has revealed that they plan to introduce 60:60 charging for calls originating in India. Will others follow? Will we see a flurry of such activity?

It’s hard to tell – but it’s clear that such moves do not go unchallenged. So, it’s worth revisiting the whole concept of incremental billing and considering the agility you need to stay ahead of such moves.

Incremental billing – a refresher

Incremental billing has been around for many years. You’ll probably also know this as the ‘X:X’ billing model—most typically, 60:60. The first number is the ‘minimum’ amount of voice time you charge me for, and the second part is the ‘increment,’ so what you plan to charge me for the time over the minimum (here, 1 minute or 60 seconds).

For destinations that adopt this approach, calls of 10 seconds, 39 seconds, 59 seconds, don’t make any difference — they are charged at the agreed tariff for all 60 seconds, not per second.

Similarly, with 60:60, a call of 61 seconds—so 1 second over into the next increment—is charged for two full minutes of time, so 2 x 60 seconds. These days, you can decide what your basic increment and next one is very easily—say, 12:6 (minimum 12 seconds, going up by the next chargeable increment every 6 seconds after), and so on.

It goes without saying that there are all kinds of variations to incremental billing, and 60:60’s just a very common one. (This is part of telecom’s rich legacy, as we used to be all about the pulses that were either generated per minute, 60, or another specified interval). As a result, you may have well come across (or be working with) weird and wonderful 60:60 variations like 6/6, 10/10, 18/6. The list goes on.

It would be silly to say incremental billing is ‘back;’ it actually never went away. But its time has definitely come for markets where it hasn’t been a factor for a while—and that has implications for your billing system strategy that need to be made now. The network to which you route the call may be using 60:60 charging (or another variant), which means you must align your charges accordingly, ensuring a profitable chain in the wholesale path.

Incremental equals higher revenue

Not that long ago, the idea of carriers charging in slices higher than a single second was the default. In some geographies, it always has been; multiple national carriers have long committed to 60:60 wholesale pricing as the norm (e.g., Mexico, Gambia, a lot of Oceania – while India carriers have just announced they are adopting the same policy).

The reason so many like incremental billing is that they can charge more for connecting voice users. This matters to anyone operating in the international voice market; at the absolute minimum, you need to be able to work with any country that has adopted incremental billing, and your system must be able to flex to accommodate what that geography demands – aligning pricing for your partners up- and downstream.

Why: because you have to accurately calculate and flag up the possible cost, as well as be able to figure out how to route the calls most cost-effectively as an operator. You also must cope with a lot of variation, like if country x only charges incremental billing for services like data usage, international calls, and other value-added services, and country y has a different structure entirely.

Therefore, having a sound way of dealing with billing increments--both for incoming (billable) and outgoing (payable) traffic--is an absolute necessity. If it isn’t, you just couldn’t be a successful partner on the international scene. But you may also have to be thinking about if it’s time for you to move to this model for other markets, too—maybe all of them.

Clearly, incremental means increased margins are available for calls delivered to territories in which these models are applicable. You need to be able to account for this and to capture the additional revenue this affords.

Give yourself as many X:X options as could work

Another factor at play here is flash call verification, which (driven by security concerns) is on the rise (Juniper says it could reach 130 billion by 2026, up from just 60 million in 2021). Operators need to find a way to monetise this, and quickly, as it could soon eat significantly into your voice traffic income; could incremental be useful in giving you a response?

Something to think about for sure, but the overall verdict is that 60:60 billing is:

  • ‘back’ (though it never really ‘went away’!)
  • here to stay
  • more countries might adopt it
  • it is absolutely an opportunity--but you need to be sure you can adjust when it is introduced so you can maximise your returns and margins when routing to 60:60 destinations.

To do all this, you just have to be able to adjust your billing rules to accommodate that, and with the least amount of friction.

The market responds!

So, as we have seen, market moves generate responses – a clear case of tit for tat? Yes, but indicative of the absolute need to stay on top of the situation – and to be able to respond to any such changes.

This is clearly a fast-moving environment – but what do you think? How does the introduction of new 60:60 billing requirements impact your business? We’ve already seen a reaction to the recent news from India – which markets might be next?

Join the discussion and share your views!

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