Arbinet Rolls Out Select Routing

Posted: 10/2003

Arbinet Rolls Out Select Routing
By Khali Henderson

Arbinet Inc., operator of thexchange (www.thexchange.com) minutes trading floor, planned to roll out new routing services with higher quality routes.

Two new services, Select Routing and Select Plus Routing, were to be available mid-September and are the result of feedback from Arbinets members during a spring customer meeting. The members told Arbinet they were seeking to price against the supply  something that required access to more predictably priced routes.

In answer, the Select Routing products will feature only routes that have been tested by the exchange to meet certain quality standards for the previous seven consecutive days. There are two flavors. One is rematched as significant changes occur and the other sellers commit to a rate lock, explains Chris Reid, director of marketing for thexchange.

Unlike Prime Routing, Arbinets core service that is rematched every four hours based on the buyers stated price and quality preferences, Select Routing will be monitored and rematched only if the route chosen falls outside of a set tolerance range (i.e., a 2 percent change in the answer seizure ratio). Select Plus will lock them in for seven dates.

Reid says the benefit is more stable matching for buyers and sellers. Arbinet the exchange largely grew up in the wholesale carrier space offering routes that carriers were buying to sell to another carrier potentially. Thats a highly cost-competitive market. Fractions of a cent per minute are enough to want to change supply in that environment.

The new product is based on a desire to use the system to help them with a different type of traffic, their retail traffic. So, this is still off-net termination that a carrier is buying, but its for its own customer phone calls. Typically the margins are much larger so the priority for the carriers is typically call-completion rates rather than a fraction of a cent per minute because there is such a large margin, you just want to complete every call you can.

Arbinet planned to launch the new service in mid- September having spent the previous three weeks qualifying routes, communicating the program to its more than 250 carrier members and turning up the new trading site with the new routes.

Arbinet President and CEO Curt Hockemeier couldnt say exactly how many routes initially would be qualified. Reid adds the carriers are likely to load two routes for each destination into thexchange  one lowcost route in Prime Routing tables and one higher-quality route in Select Routing tables By the same token, Reid says buyers often source multiple carriers for the same route. They may have low-cost supply from smaller, competitive sellers and more stable higher-cost supply from a bilateral direct interconnect route and that might offer or do things like pass caller ID, he says.

While the new solution is designed to serve Arbinets existing members, Reid says it also may appeal to more retail-oriented carriers, such as mobile carriers.

Arbinet in July reported second quarter was its 12th consecutive quarter of growth. Trading was up 24 percent quarter over quarter at 2.05 billion minutes.