The Impact of Origin-Based Rating / Routing (OBR) on the Wholesale Voice Industry Opportunities and Challenges
Introduction
The wholesale voice industry, a crucial backbone of global telecommunications, has witnessed significant shifts in recent years. One of the pivotal changes is the introduction and implementation of Origin Based Rating/Routing (OBR). OBR, a method where the routing and the rating of international voice calls are determined based on the call's origin, has reshaped the operational dynamics of this industry. The shift to OBR brings with it a plethora of challenges and opportunities, influencing operational strategies, revenue models, and the overall market dynamics. This article delves into the impacts of OBR on the wholesale voice industry and explores the ongoing challenges it presents.
The Concept of OBR
Traditionally, the routing and rating of voice calls in the wholesale market were primarily destination-based. With OBR, the origin of the call also becomes a critical factor. At its core, OBR is a new model that considers both the origination and termination of calls for billing and routing purposes. The model introduces additional surcharges based on the call's origin, often influenced by specific mobile network operators alongside the originating country.
OBR's Inception and Growth
This approach has been increasingly adopted in European markets and is spreading globally. The inception of OBR, particularly in the European Union, was partly a response to declining revenues following the harmonization of roaming rates. The rationale behind OBR is to allow more accurate rating and routing practices that reflect the actual costs incurred by operators in different countries. Operators began applying surcharges to calls originating from outside the EU, leading to varied and operator-specific pricing structures. This variability, while creating new revenue streams, also opened doors to potential fraud and disparities in operator incomes.
Positive Impacts on the Wholesale Voice Industry
1. Fairer Pricing Models: OBR facilitates a pricing structure that better represents the cost structures of different regions. This leads to more equitable compensation for carriers, especially in regions where the cost of delivering services is higher.
2. Enhanced Quality of Service: By taking the origin of calls into account, carriers can optimize routing paths, potentially leading to improved call quality and reliability.
3. Increased Transparency: OBR can lead to greater transparency in the industry, as it necessitates more detailed tracking and reporting of call origins and destinations.
Challenges and Ongoing Issues
However, the adoption of OBR is not without its challenges.
1. Complexity in Billing and Routing: Implementing OBR requires significant changes to billing and routing systems. Carriers must now account for a larger set of variables, making the process more complex and potentially error-prone.
2. New investment in the BSS solutions: The new complexity emerged following the introduction of the OBR concept enforce the carriers and CSPs to invest in developing or replacing the existing Wholesale/Interconnect BSS solutions to mitigate the risk and challenges accompanying the OBR business needs.
3. Regulatory Hurdles: OBR practices can sometimes conflict with existing regulations in certain countries, creating legal and operational challenges.
4. Fraud and Bypass Risks: The differential pricing based on origin can lead to an increase in fraudulent activities, such as call origin (CLI) masking or SIM box fraud, as actors in the industry attempt to evade higher charges.
5. Market Fragmentation: OBR can lead to market fragmentation, as different regions adopt varied approaches to call routing and pricing. This fragmentation can complicate international partnerships and agreements.
Future Outlook
The future of OBR in the wholesale voice industry is a subject of ongoing debate. While it presents opportunities for fairer pricing and improved service quality, the challenges it brings cannot be overlooked. Industry stakeholders must collaborate to address these challenges, perhaps through the development of standardized practices or advanced technological solutions that can manage the complexities of OBR.
Conclusion
OBR has undoubtedly left a permanent mark on the wholesale voice industry, with its complexities and transformative potential,and requires a concerted effort from all stakeholders in the telecom industry. Its impact ranges from changing pricing structures to introducing operational complexities. As the industry continues to evolve, the balance between leveraging the benefits of OBR and mitigating its challenges will be critical in shaping the future landscape of global telecommunications. The need for adaptive strategies, regulatory alignment, and technological innovation remains paramount in navigating the OBR era.
Read more about our Wholesale Management
Combat Fraud