Traffic trading in the competitive international voice market

This article highlights the trends that are reshaping the international long distance voice market. Our analysis focuses on voice exchanges, namely, electronic marketplaces where huge volumes of ILD voice traffic are traded and routed. Various existing models of voice exchanges are compared: Arbinet, which started in 1996, providing TDM circuit-switched interconnection; and newer exchanges, based natively on VoIP, namely, voice peering fabric by stealth, infiniroute, Xconnect, and Arena by interoute. The evolution of interconnection mechanisms and the consequent impact on the role of exchanges are discussed. The calling party's network pays and the Bill & Keep interconnection commercial models are presented, and we discuss issues for their applicability. Per-volume and flatfee charging models for interconnection between operators are compared. Finally, the impact of these models on future business scenarios of voice exchanges is analyzed. The way in which call termination models will change in the future is uncertain. Regulatory aspects, service-specific requirements, country-specific issues, and market dynamics must all be taken into consideration prior to establishing the interconnection regime that will be widely adopted in the future.