Connectiv Solutions Releases Traffic Pumping Study

Practice Estimated to Cost Wireless Carriers in Excess of $190 Million Annually

BETHESDA, Md.--(BUSINESS WIRE)-- Today, Connectiv Solutions, the network efficiency experts, released the results of a half-year study of traffic pumping on the wireless industry in the United States. The Impact of Traffic Pumping, Industry Study, highlights the costs and trends associated with the recent exponential growth of traffic pumpers in more rural locations across the country. The results of the study follow a detailed analysis of more than 14 billion call detail records, covering approximately 50% of the long distance traffic originating on wireless networks in the US. Over the past seven years, Connectiv Solutions has helped a majority of the nation’s leading wireless carriers achieve significant cost savings across their network operations and is well-positioned to understand the impact of traffic pumping on service providers.

The study is available publicly for free at: www.connectiv-solutions.com.

Traffic pumping, also known as access stimulation, refers to a telephone carrier, for example a competitive local exchange carrier (CLEC), partnering with third-party companies offering free service lines (conference bridges, chat lines or international calling numbers). A rural CLEC can charge inflated access fees to terminate a call, sharing the revenue with a partner. With unlimited domestic long distance becoming standard on calling plans, traffic volumes and access revenues terminating to telephone numbers in more rural markets have increased significantly over the past few years. The net result has been an arbitrage opportunity for free conference and chat lines.

Connectiv Solutions designed a methodology for determining which carriers demonstrated characteristics of traffic pumping. Factors included: call duration, financial impact of terminating the call and validation of the terminating phone numbers. From this sample data set, calculations were made to determine the financial impact on the telecommunications industry. Based upon an analysis of 50% of long distance calls originating on wireless networks, calls terminating to carriers meeting a traffic pumping profile were estimated to cost $95 million annually, representing 11% of all long distance costs in the study. Extending to all wireless service providers, the cost is estimated to be more than $190 million annually. This figure could substantially increase if wireline service providers are included.

David Knutson, executive vice president of corporate strategy and development for Connectiv Solutions, said, “Our analysis revealed a number of interesting points. Among these, over the course of six months, the cost of traffic pumping increased by nearly 50%. Considering the high cost and the rapid pace of growth, service providers looking to reduce operating expenses can no longer ignore the impact of traffic pumping.”

Brian Silvestri, president of Connectiv Solutions, added, “The purpose of this study is not to assign legitimacy or find fault with any of the parties connected to traffic pumping. Rather, we’re attempting to quantify the financial impact on the telecommunications industry and offer tools to those impacted to assess their cost exposure.”

About Connectiv Solutions

Connectiv Solutions, the network efficiency experts, delivers unparalleled visibility and management of telecommunications network usage expenses. Telecom carriers representing more than 120 million customers rely on Connectiv Solutions to reduce operational costs and maintain a competitive advantage. For more information, visit: www.connectiv-solutions.com.

CONTACT:

Connectiv Solutions
Tim O’Regan
Mobile: 202-607-3535
teoregan@connectiv-solutions.com

KEYWORDS:   United States  North America  Maryland

INDUSTRY KEYWORDS:   Technology  Data Management  Internet  Networks  Software  Telecommunications  Mobile/Wireless  VoIP

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