🇺🇸United States

Poor quality from cheapest wholesale routes causing re‑routing and credits

2 verified sources

Definition

When rate deck management focuses solely on lowest cost without embedding quality metrics, carriers send traffic over unstable or low‑quality wholesale routes. This frequently triggers customer complaints, re‑routing, and service credits or refunds, which represent a recurring cost of poor quality.

Key Findings

  • Financial Impact: Industry discussions of LCR and wholesale optimization note that chasing the absolute lowest rate can erode profitability once credit issuance, re‑work, and churn are factored in; operators report quality‑related compensation and churn impacts in the low‑single‑digit percentage of wholesale revenue.[1][7]
  • Frequency: Weekly
  • Root Cause: LCR engines are configured using price‑only criteria and not continuously updated with performance and complaint data. Rate decks lack standardized quality attributes, and there is no closed loop between NOC feedback, customer complaints and routing/pricing decisions.[1][7]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Telecommunications Carriers.

Affected Stakeholders

Wholesale product manager, Customer operations / service assurance, Routing engineer, Account management, Revenue assurance

Deep Analysis (Premium)

Financial Impact

$40K-$180K per year in refunds for cable voice customers. • $50K-$200K annually in credits and re-routing costs (low single-digit % of wholesale revenue) • $60K-$250K annual losses from VoIP service credits.

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Current Workarounds

Manual coordination of re-routing via spreadsheets and calls. • Manual tracking of complaints and route adjustments in spreadsheets. • Paper logs and Excel for complaint tracking and credit calculations.

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Rate deck errors causing calls routed at a loss or not billed

Industry analyses of wholesale and interconnection margins indicate that routing and rate mis‑alignment can erode 3–7% of interconnect revenue; for a carrier with $100M wholesale voice revenue, this is roughly $3–7M per year.[1][7]

Disconnect between cost inventory and billed services leaking revenue

Telecom Q2C and inventory audits commonly recover low‑single‑digit percentages of revenue due to under‑billing; for a $50M wholesale book this equates to ~$1–2M per year in previously unbilled services.[2]

Overpaying suppliers due to misaligned wholesale rates and routing

Benchmarking of wholesale/interconnection cost management shows that optimized routing and contract enforcement can reduce external carrier spend by 5–15%; the delta represents prior recurring cost overrun. For a carrier buying $80M of wholesale capacity, this equals ~$4–12M per year.[1][4]

Paying erroneous carrier invoices due to weak validation against rate decks

A managed optimization program across four telecom clients recovered over $5M in a single month by identifying erroneous carrier charges and contract violations, implying similar ongoing cost exposure before remediation.[4]

Manual rate deck implementation delaying billing for new wholesale services

Telecom Q2C analyses highlight that lack of automation in billing order entry leads directly to delayed billing and revenue leakage; for high‑value wholesale contracts, even a 1–2 month lag can defer millions in cash inflow.[2][9]

Inefficient routing and idle capacity from poor wholesale rate visibility

Wholesale and interconnection cost studies show that better routing and contract optimization can materially increase utilization of already‑contracted capacity and improve profitability; the implicit waste can amount to several percentage points of wholesale margin annually.[1][8]

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