Creating an A-Z Tariff for Clients

4 min read

The fastest way to start serving customers is to provide them with the so-called A-Z tariff price list, which tells them that you are prepared to serve all the destinations available. It is easy to do because there are many vendors that offer this. You need to send your clients‘ calls to the vendors and take some small percentage of profit out of it.

In order to do this, you need to give your tariff (your prices) to your customers.

If you only have one vendor, you can use an Excel spreadsheet or Google Sheet to calculate your prices by just adding a percentage to the vendor‘s prices. But what if you have several vendors (which is advisable, to provide you backup)? These vendors are likely to have different price lists, with different prefix lists, different formats, and other variations.

For this task, it is necessary to use Tariff Generator, which is the default tool in the Voice Traffic business system or Softswitch.

 

First Steps

To generate a new tariff you usually have to select a few options first.

You will need to choose a new name for the new tariff and tariff‘s currency.

If the selected currency differs from the source tariff currency, currency conversion will take place. The current exchange rate will be applied. Take this into account.

 

Source Tariff(s)

Select from which tariff or group of tariffs the new tariff will be generated. Rates from the source tariffs will be used to generate the final tariff.

All selected tariffs will be merged into one new tariff. All rates will be converted to the selected currency.

Prefix normalization takes place here also. When one tariff does not have a rate for some longer prefix but has a rate for a shorter prefix, the rate for this shorter prefix will be used for new rate generation. It is important to understand this process when we talk about prefixes and how their rates are applied to the dialed numbers. (Check the example below, with rate 0.05 for prefix 3705.)

 

Profit Margin

Once we have source rates, we need some rules for converting basic (buy) rates to the final (sale) rates. Clearly, we have to increase the initial rates. Only in very rare cases, source rates are less than or equal to destination rates. Make sure you know what you are doing if you go this route.

The source rates can be increased by a percentage or nominally – by an actual value.

The percentage increase is straightforward: add some percentage to the source rate.

Nominal increase: add some nominal value, let’s say 1 cent (0.01 € or $), to each source rate.

Whichever approach you choose, this additional charge is called the profit margin.

We can be more creative by adding profit margin (percentage or nominal) not on the cheapest rate we have, but on the second cheapest rate and so on. This guarantees us some breathing space because if we put a profit margin on the cheapest rate, our destination rate could be less than the second cheapest source rate. In that case, we will have only one vendor (the cheapest one) in our routing table. And if this vendor should go blank, calls will not pass over to this destination. So it‘s better to be safe and generate rates that at least take into account the second cheapest rate.

Also, it is possible to combine profit margins, by selecting different profit margins from the bottom (cheapest rate) and from the second cheapest rate (or third, and so on).

If two or more tariffs have rates for the same destination, then the n-th cheapest rate (valued by system currency) for that destination will be chosen. If the profit margin on the selected cheapest n-th rate is lower than the profit margin on the cheapest rate (for the same prefix in all selected tariffs), then the cheapest rate with profit margin will be used instead of the n-th cheapest rate. This will provide backup in the routing table and guarantee some profit margin percentage.

 

Example

Current Rates of Selected Tariffs:

Destination (Prefix) Tariff A Tariff B
370 0.1 0.05
3705 0.1
3706 0.2 0.3
888 0.8

 

If in selected tariffs there will be destinations without rates, rates from destinations with a shorter prefix will be taken. If there is no destination with a shorter prefix, it will stay without the rate.

Destination (Prefix) Tariff A Tariff B
370 0.1 0.05
3705 0.1 0.05
3706 0.2 0.3
888 0.8

 

NOTE: Rate 0.05 will be treated as the rate of prefix 3705 in tariff B because prefix 370 has this rate. Prefix 888 in tariff A will be treated as having no rate because there are no prefixes in that tariff that start with 8.

If Profit Margin is 10% on 1st cheapest Rate new Tariff will have Rates as Tariff C:

Destination (Prefix) Tariff A Tariff B Tariff C
370 0.1 0.05 0.055
3705 0.1 0.05 0.055
3706 0.2 0.3 0.22
888 0.8 0.88

If two or more rates have different minimal time, increment, or connection fee value, the max value will be chosen for newly created rates.

 

Limiting Max Rate

It’s a good practice to limit your rates to some degree. For example, some vendors put a rate of €10.00 on some destinations. This is their way of telling their clients, “we do not wish you to call here.” In a way, these destinations are blocked without actually being blocked. If a client calls this destination, their account is busted, which is not very nice from the vendor’s perspective. It‘s better to block these destinations. Maybe by not blocking these destinations vendors are free to claim that they provide A-Z traffic. Whatever their reasons, we recommend that you specify some limit, and do not add 10 percent on top of these destinations. Make them 10.11 or some other fixed number, because otherwise, your clients can infer your profit margin from these rates.

 

Destination Prefixes

It is important to maintain a consistent and full number plan or deck – that is, the prefix array from which your tariff will be composed. One way to generate your tariff to have this list of prefixes is to select another tariff with this prefix list.

 

Create a New Tariff from the Highest Rate, Not the Lowest

If you have three tariffs from which you want to create a new tariff, then select the third-cheapest tariff to add something to, which would be the same as adding something to the highest rate.

Example:

You have three tariffs: A with price 3, B with price 5, and C with price 1.

Let’s add 100 percent to the third “CHEAPEST” rate, which would be tariff B with price 5 (ordered in increasing order: 1 3 5)

The result would be 5 + 100 percent of 5 = 10.

This is the same as creating a new tariff from the highest rate.

 

Conclusion

Here we described one quick and easy way to get a new A-Z tariff or update an existing one.

The same approach could be used to generate new rates for an already existing tariff. In this process, an existing tariff is selected instead of a new one, so the destination prefixes are already in place.

Be careful about choosing the effective dates for your rates, and use the rate notification feature to inform your clients about any rate changes.

 

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