Accurate billing is a necessity in the telecommunication industry, where each call, message, and data session has an associated cost. Origin based rating is one of the key components in this process. Origin based rating concept has been introduced in order to not lose all profits where generally calls from outside Europe into Europe will be more expensive than calls within Europe. Telecom operators utilise the origin-based routing method to calculate the cost of a call, message, or data session. In this blog, we will examine the origin based rating operation and importance in telecom billing.
What is an origin based rating?
Origin based rating is a method used by telecom operators to calculate charges based on the origin of a call or data session. Instead of applying a flat rate for all calls or sessions, origin based rating takes into account the geographical location from which the communication originates. This means that two calls of the same duration and destination may incur different charges if they originate from different locations.
How does origin based rating work?
- Identification of origin
When a call or data session is initiated, the telecom network identifies the geographical location (country, region, etc.) from which the communication originates. This identification is typically done based on the network signaling information and the location of the network node through which the communication enters the operator’s network.
- Mapping to tariff plans
Once the origin of the communication is identified, it is mapped to specific tariff plans or rate tables maintained by the telecom operator. These tariff plans may vary based on factors such as the country of origin, the type of communication (voice call, SMS, data), and any special agreements or partnerships the operator has with other operators.
- Application of rates
Based on the tariff plan associated with the origin, applicable rates for the call or data session are determined. These rates may vary depending on various factors, including the time of day, the destination of the communication, and any promotional offers or discounts applicable to the origin.
- Calculation of charges
Charges are calculated based on factors such as the duration of the call, the volume of data transmitted, and the rates applicable for the origin. Once the charges are calculated, they are typically added to the customer’s bill or deducted from their prepaid balance, depending on their billing arrangement with the operator.
Significance of origin based rating
- Fairness
Origin based rating ensures that customers are charged fairly based on the actual cost of providing services from their location. This helps prevent situations where customers from high-cost regions subsidise customers from low-cost regions.
- Cost optimisation
By tailoring rates to different origins, telecom operators can optimise their revenue and profitability. This allows operators to reflect the varying costs associated with providing services in different regions and adjust their pricing strategies accordingly.
- Compliance
In international communications, origin based rating helps telecom operators comply with regulatory requirements and agreements governing interconnection charges between operators in different countries. By accurately applying origin-based rates, operators can ensure compliance with international tariffs and avoid disputes with other operators.
- Customer experience
Transparent billing practices, enabled by origin based rating, contribute to a positive customer experience. Customers appreciate knowing that they are being charged based on the actual costs associated with their location, leading to increased trust and satisfaction with the operator’s services.
Challenges and considerations
- Complexity
Managing and updating tariff plans for different origins can be complex, especially in the case of international communications involving numerous countries. Telecom operators must invest in robust billing systems and processes to ensure accurate and timely application of origin-based rates.
- Regulatory compliance
Telecom operators must ensure that their origin based rating practices comply with relevant regulations and agreements governing international telecommunications. This includes staying up-to-date with changes in tariffs, regulatory requirements, and international agreements that may affect origin-based billing practices.
- Accuracy
Accurately identifying the origin of a call or data session is crucial for applying the correct rates and avoiding billing errors. Factors such as network routing, signaling protocols, and network topology can impact the accuracy of origin identification, requiring operators to implement sophisticated algorithms and mechanisms for location detection.
To sum up
Origin based rating is a fundamental aspect of telecom billing, particularly in scenarios involving international communications or roaming. By considering the geographical origin of a call or data session, telecom operators can apply rates that reflect the actual costs of providing services in different regions. Despite its complexities and challenges, origin based rating plays a vital role in ensuring fairness, optimising costs, and enhancing the overall customer experience in telecommunication industry. With proper systems, processes, and regulatory compliance measures in place, telecom operators can effectively leverage origin-based rating to drive revenue growth and maintain customer satisfaction.
