By Simon Woodhead
The annual revision to carrier interconnect rates is upon us, effective April 1st 2023. As warned last year, and indeed as raised with the Minister, in addition to the grotesque CPI+3.9% shenanigans, CPI feeds through into Regulated rates and so they’re going up markedly.
These are the rates networks pay each other assuming they meet at a point where that rate is available, and thus avoid transit; this is easier said than done in some cases. Historically these have fallen, and thus our input costs and our sell rates have adjusted with them, but this time they’re increasing broadly 10.6% and 12.5% respectively. You can see/track them on the Ofcom website.
There’s two things to let you know from this:
- For ranges belonging to or the very many hosted by Simwood, we make the interconnect rates available to all customers. These are the rates you’ll see that look like ‘UK – Mobile – Simwood’ and ‘UK – Fixed – Simwood’. We don’t play the – in our opinion – dirty game of charging you transit to reach them (does your other carrier?) partly because we want traffic to ranges we host travelling as directly as possible rather than hair-pinning round various networks. You’ll see those rates adjust in the April 1st update.
- Whilst our transit rates for reaching other networks ebb and flow and the rate update is your notification of it, it has become customary for us to point out changes to major destinations which don’t change frequently – UK Fixed and UK Mobile tick this box. Our intention is to track the cost increase directly but to be clear this won’t be a percentage increase but rather the direct increment in monetary terms (+0.049ppm for mobile and +0.0033ppm for fixed ) which will be a much smaller percentage increase given the other elements therein which are not increasing. Customers on IPX-torpedo tariffs will generally have this described formulaically in contracts already but otherwise it’ll be reflected in your April 1st rate update.
We’re trying to minimise the impact of this for you and your customers but regretfully our solo efforts to have the formula revisited were unsuccessful. We’re pleased Ofcom did have the great idea to investigate CPI+3.9% shenanigans however after we wrote to the Minister and drew attention on this blog. All unrelated of course.