RAPPORTEURs REPORT

1
RAPPORTEURs REPORT APT STUDY GROUP QUESTION
1.2 Network Optimisation for Interconnection
in Multi-Operator Scenario And Inter-Carrier
Issues
2
Report Contents

• The Report of the APT Study Group Question 1.2
  is being submitted for kind approval of the
  Study Group members. The Report is having 4
  Chapters.
• Chapter 1 deals with a set of Questionnaire that
  were Circulated to all APT countries so that all
  relevant full the Technical Inputs could be
  captured.
• Chapter 2 covers various Responses to the Issues
  that were covered in Questions. Incidentally
• , I am also functioning as Chairman of ITU-Ds
  Project Group on Interconnection for ITU-D
• Study Group 1, 3rd Study Period (2002-2006)
  Question 6-1/1 on Interconnection. I have been
• able to get REPORT ON INTERCONNECTION finalized
  by ITU-D and also subsequently approved by TDAG
  in January 2004 and has now been published by
  ITU. The Report provides recommendations and
  reference materials on the Regulatory, Economic
  and Technical aspects of interconnection. It
  includes the issues that are relevant to APT
  Study Group Question 1.2. The Report on
  Interconnection has been forwarded by ITU to all
  Administrations on 18th June 2004 and is
  available on http//www.itu.int/ITU-D/study-groups
  /free-publications-1.html
• Table of contents are included in Chapter 3 as
  Other Supporting Inputs from ITU for SQ 1.2
• Chapter 4 is based on my Supporting Paper dated
  26th March 2004 on an Interconnection
  Optimisation International Case Study that has
  been posted on ITUs G-REX Web Site also. The
  Case Study actually brings out an Optimised
  Interconnection Architecture that can have
  minimum Point of Interconnections but can give a
  number of advantages with respect to
  Inter-Carrier Billing, Carrier Selection, Number
  Portability and best entry conditions for new
  operators in Multi-Operator Multi-service
  Scenario.

3
Key Technical Issues

• a) Interconnection Architecture and Routing of
  traffic
•  
• b)   Location of POIs
•  
• c)   Interconnect Gateway Switches
•  
• d) Technical Interface Specifications
•  
• e) Signalling Architecture
•  
• f) Interconnect Billing System for Multi-Operator
  Scenario
•  
• g) Quality of Interconnection
•  
• h)   Traffic measurements and planning of
  Interconnections
•  
• i) Carrier Selection across Inter-connecting
  networks
•  
• j) Number Portability across Inter-connecting
  networks

4
Report on Question 6-1/1Table of Contents

• SECTION I - Legislative and Regulatory Framework
  and Interconnection Agreements and Reference
  Interconnection Offers (RIOs)
• Legislative and regulatory framework needed to
  implement interconnection agreements, unbundling
  and collocation
• Content of Interconnection Agreements
  
  
• 3 Reference Interconnect Offers
  
  
• 4 Annexes

5
Economic Issues in Interconnection

• SECTION II Economic Issues in Interconnection
  
  
• Overview of the key interconnection economic
  issues, including cost study approaches
• What are the costs of interconnection?
• Categories of Costs
• Costs Engendered by Interconnection
• Costs for different types of Interconnection
• How Can Interconnection Costs Be Measured
• Theoretical Framework
• Major Categories of Costs

6
Economic Issues in Interconnection

• Cost Study Approaches
  
  
• The Bottom up Approach
• The Top Down Approach
• The Outside-In Approach
• How should costs be recovered?
• Network Development and Universal Service
• COSITU ITUs model for calculation of Telephone
  service costs,
• tariffs and Interconnection charges
• Introduction
• Classification and Definition of Services for
  which COSITU calculates costs
• Definition of Services
• Theoretical Aspects of COSITU
• Other Cost Models (Handbook on Costing
  Methodologies based on ITU-T Study Group 3)

7
Section III

• Technical Issues Related to Interconnection

8
ANNEXES

• Annex I Contents of a typical interconnection
  agreement
• Annex II Reference Interconnect Offer RIO
  Indian Model
• Annex III Planning and Operations of an
  Interconnection (Belgium Model)
• Annex IV Regulations on Technical Issues
  (Finland Model)
• Annex V Other Interconnection Options

9
ANNEXES

• Annex VI Possible solution for Interconnection
  in Multi-Operator Multi-Service Scenario through
  an Interconnect Gateway Exchange and added
  functionality of interconnection clearing house.
• Annex VII Functional Requirements of an
  Interconnection Billing System as an illustration
• Annex VIII Interconnect Billing in British
  Telecom

10
ANNEXES

• Annex IX Functional Specification of Carrier
  Selection Indian Example
• Annex X Methodology for recovery of costs
  incurred by Service Providers in setting up
  Carrier Pre-selection Complilation of
  International Practice
• Annex XI Polling and Subscriber Education as
  applicable for Carrier Pre-selection
• Annex XII Interconnection Usage charges (IUC)
  for use of Unbundled Network Elements (UNEs)
  involved in carriage of carious types of calls
  Indian Model

11
ANNEXES

• Annex XIII Interconnect Usage Charges Derived
  Indian Model
• Annex XIV Inputs on Liaison including Handbook
  on Costing Methodologies
• Annex XV Cost Model for Interconnect Charges
• Annex XVI  Compilation covering Technical Issues
  as reported by all member countries
• Annex XVII Reference Tables on Web Site
  Addresses covering RIOs, Interconnection
  Agreements, Regulations, Rulings and other
  specific issues as raised in Administrative
  Circular CA/16
• Annex XVIII Setting Up Interconnection Regimes
  Reference for Regulators

12
Section IV

• CASE STUDY PAPER on
• NEW INTERCONNECTION OPTION
• INTERCONNECT EXCHANGE cum
• INTER-CARRIER BILLING CLEARING HOUSE
• Supported by a ITU G-REX
• CASE STUDY On
• POINT OF INTERCONNECTIONS In
• Multi-Operator Multi-Service Scenario

13
Interconnect Exchange

• Interconnection is one of the most serious
  problems that is emerging with the increase in
  number of operators with open market conditions.
  With the increase of number of operators in
  different services, the number of interconnect
  links between operators will increase in
  multiples and will be very soon unmanageable. The
  concept of INTERCONNECT EXCHANGE cum
  INTER-CARRIER BILLING CLEARING HOUSE is a further
  step towards creation of a modern and efficient
  telecommunications infrastructure.

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Interconnect Exchange

• This Paper on INTERCONNECT EXCHANGE cum
  INTER-CARRIER BILLING CLEARING HOUSE for
  Multi-Operator Multi-Service Scenario addresses
  key issues related to Interconnection
  Architecture. The paper suggests a totally new
  approach which possibly may provide a solution to
  facilitate further competition and could be a
  catalyst as well as launching pad for the
  tele-density growth in the multi-operator
  multi-service scenario in developing countries.
  It could also provide a solution to a number of
  issues that are coming in the way of getting best
  results from the investments being made in the
  telecom sector. It could further lead to many new
  value additions for the consumers at competitive
  tariffs.

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Interconnection Scenario
16
Figure II New Scenario of Interconnection (With
Interconnect Exchange cum Inter-carrier Billing
Clearing House)
17
Features of an Interconnect Exchange

• 3.1 Interconnect Exchange could be connected to
  each operator at POIs preferably through a
  duplicated interconnect link.
• 3.2 As all the operators would be connected to
  only one interconnect operator, uniform terms of
  interconnect could be applicable
• 3.3 Interconnect Exchange could be versatile
  enough to accommodate all type of interconnect
  links as per licensing/ regulatory requirements
• 3.4 Interconnect Exchange operator could work as
  a mediator and the Clearing House for the bills
  between service providers. In the first instance,
  incumbent operator could offer these services. In
  case he declines, one of the new operators could
  provide such interconnect exchange for all type
  of interconnections at designated POIs
• 3.5 In the scenario with 16 operators in a
  typical POI Area, with the introduction of an
  Interconnect Exchange the number of Interconnect
  links could be reduced to as little as 16 from
  staggering number of 240 links needed based on
  the present recommended interconnection
  architecture.

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Problems being encountered

• Inter carrier billing
• Complexity in settlement of interconnect usage
  charges
• Sharing of Intelligent Network Platform
• Implementation of Number Portability.
• Implementation of carrier selection.

19
Problems being encountered

• Higher range of interconnection cost and Port
  Charges.
• Longer waiting period for provision of
  interconnection capacities.
• Higher cost of service
• Inefficient handling of call
• Sub-optimal utilisation of network
• Serious increase of CAPEX and OPEX making
  operation unavailable

20
Role of Interconnect Exchange in resolving the
above problems

• Inter-Carrier Billing
• Presently Inter-Carrier Billing is generally a
  major issue of dispute between various Service
  Providers and is likely to escalate unless
  corrective steps are in place at this stage
  itself. If Interconnect Exchange is having the
  Role of Inter-Carrier Billing Clearing House as
  well, a solution of a major problem area could be
  available.

21
Role of Interconnect Exchange in resolving the
above problems

• Intelligent Network Services
• Intelligent Network Services in a multi-operator
  multi-service scenario could be provided through
  the combination of Interconnect Exchange cum
  Inter-Carrier Billing Clearing House.
• Number Portability
• Number Portability issue could also be addressed
  for a multi-operator multi-service scenario
  through the centralised Database available with
  Interconnect Exchange cum Inter-Carrier Billing
  Clearing House.

22
Role of Interconnect Exchange in resolving the
above problems

• Carrier Selection
• Carrier-Selection implementation could also be
  implemented with reduced incremental costs
  Interconnect Exchanges supporting infrastructure
  is deployed. Option of Long Distance Calling
  Cards could also be facilitated.
• Simplification in Network Architecture, Reduction
  in POI, Simplification in settlement of
  Interconnect Usage Charges, Abolition/ Steep
  reduction of Port Charges, Reduction in waiting
  period for Interconnection capacities

23
Advantages

• Optimisation of number of Interconnect links
• Simplicity in Digit analysis/ Route selection
• Simplicity of Operation
• Simplification of Carrier selection function
• Simple, Cost effective and reliable POIs
• Network Simplification
• Efficient handling of New and Traditional
  Interconnects
• Equality in Terms of Interconnect

24
Operation Issues

• Source of Revenue for Interconnect Exchange
• Cost of Interconnection with Interconnect
  Exchange
• Options available are
• Operated by regulator
• Operated by carrier
• Operated by consortium
• Operated by neutral third party contractor

25
Summary of Case Study Results
26
RECOMMENDATION

• Taking note of the
• detailed work done for the Study Group Question
  on Network Optimisation for Interconnection in
  Multi-Operator Scenario and Inter-Carrier Issues
  
• along with supporting details available in the
  form of Report on Interconnection finalised by
  ITU-D, Study Group 1 during 3rd Study Period for
  Question 6-1/1 and
• Paper dated 26th March 2004 from Mr. Rakesh Kumar
  Bhatnagar posted on ITUs G-REX that has a
  detailed Case Study for a typical country in
  Multi-Operator Multi-Service scenario and
  establishing that an Interconnect Exchange could
  result in savings in Interconnection capacity
  requirements ranging from 18 to 80 for the study
  data and at the same time provide a technical
  interconnection infrastructure that can
  accelerate growth in multi-operator scenario with
  minimum requirements for upgrade or additional
  costs in the existing switching networks of the
  operators

27
Recommendation

• Study Group recommends that
• The countries in the Region after having carried
  out Interconnection Optimisation Case Studies for
  multi-operator multi-service scenario, should
  explore the option of providing Optimised
  Interconnection Architecture that can have
  minimum Point of Interconnections and added
  advantages with respect to Inter-Carrier Billing,
  Carrier Selection, Number Portability, Quality of
  Service and best entry Interconnection
  infrastructure for all operators in
  Multi-Operator Multi-Service Scenario. One
  Interconnect Exchange in one service area along
  with Inter-Carrier Billing support and
  centralised data base could be interconnection
  solution.