Intelligent Solutions

Are we first in route?

Simon Woodhead

Simon Woodhead

9th August 2019

By Simon Woodhead

Our humungous new rate update is live today (9th August 2019) and it marks the beginning of a great experiment – to apply initial market-rate matching, then machine learning and aspects of artificial intelligence to our rate updates. In short, we want to know whether if we drop termination rates to beat relevant competitors, will you send us more traffic, and can we continue to replace that minute margin with other services. The long version is in “Humungous, monster rate update!” but the headline about pricing is actually at the bottom (after the ‘why’), so I’ll paste it below.

At the Start-Up level, UK fixed has been reduced by almost 32% to £0.00189 or equivalent. UK Mobile at the Startup level has been reduced over 27% to £0.00589 or equivalent. There are less-frequently dialled destinations reduced by as much as 99% through the combination of changes we’ve mentioned though!

Remember: these are our entry-level Start-Up tier rates – better rates are available.

We know many customers use LCRs and we’re seeing the benefit of that, just as we do when others have outages, but we also know many of you have hardcoded priorities, sometimes based on a one-time historic look at rates. This post is a bit of a prod that you ought to look again to benefit from the changes we’re making, and send us more traffic! By doing so you’re sending us signals that price-cuts win volume; by not doing so you’re sending us signals that we’ll get the traffic anyway when the other operator fails, regardless of price. Of course, for the many of you where we’re already first in route and the only route – these changes are a thank you gift.

To be clear, there isn’t one operator who is consistently better-priced, in fact there’s some really odd and obviously manual price-setting out there. In the UK on our Start-Up tier for example, one was cheaper on fixed but far more expensive on mobile; another was cheaper on mobile but more expensive on fixed; others were more expensive on all. Therefore, at a per breakout level, we’re pitching just below the one who is cheapest to seed this experiment.

Please compare rates safely too as we’ve harped on about in the past. This exercise has shown two other very reputable operators charging upwards of 11p for what we’d consider UK O2 Mobile calls, despite them having a very competitive headline rate. You’d miss this comparing rows in a spreadsheet. You can only compare the cost of calls by re-processing CDRs for actual calls, something we’re very happy to do for you. Also remember, should this situation be reversed, we give you per-call controls to limit the cost of any individual call and avoid surprises. If you don’t use them, you at least know about any unexpected cost as we uniquely give you real-time calls in progress, CDRs and let you analyse traffic in the portal! Continue thinking you’re saving whilst blindly paying 11p for UK Mobile calls if you prefer! By the way, that is one example of many!

With termination, margin can often be in the long-tail and other wholesalers frequently pitch for your ‘top 10’, knowing they’ll make a killing on the other few thousand destinations outside that top 10 once in route, and then sneak the custom rates you think you have upwards later. We’ve never bought or sold based on top-10. We buy A-Zs quality first and let the system work out value. Sell-side we’ve applied the same algorithm across the entire A-Z. Our new algorithm (tweaked behaviourally going forwards) now compares other prices we know about for all destinations and shoots for the cheapest. This gives you best value, but hopefully brings some honesty and transparency to the market too. We’ve done the top 175 destinations in this update, so watch out for more over coming weeks.

If we’ve missed someone and comparable quality is available in the market on better terms, we’d love to know. Otherwise, to read more about what we’re doing, why and how we’re doing it see “Humungous, monster rate update!” – the termination rate talk starts about half way down.

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