Alekstra Provides Switched Access Pricing Solution for Your Mobile Carrier

By Amanda Ciccatelli TMCnet Web Editor

High roaming charges make little sense in today's connected world, especially as VOIP services perform the exact same task for free or cheaper, sometimes even over the exact same network.

In 1998, Toni Toikka got his start as salesman at Elisa (News - Alert), a Finnish telecommunications company, where he discovered no one had any idea what they paid for when they purchased mobile services, according to Arcticstartup.com. He envisioned a global transparent switched access pricing system updated for the modern era.

Toikka is now the founder and CEO of Helsinki-based Alekstra, founded in 2006, which offers a suite of services designed to lower the mobile phone bills of large organizations with efficiency and the reduction of billing errors. The services optimize a company’s rate plans so they aren't buying features they don't need. Alesktra even offers features like Ratemizer, an automated phone bill analyzer that lowers costs due to billing mistakes. 

The Aberdeen (News - Alert) Group estimates billing errors represent 12 percent of the total invoice price. Going back through past bills for one of its customers enabled Alekstra to reclaim €700 000 in billing errors made over a five year period.

By building intelligent billing systems, Alekstra is setting themselves up to become the world's first Global Virtual Network Operator, allowing customer to take their cell phones from Finland to Singapore to the U.S. and pay a low fee and no roaming charges under the same network.

"The first step was how to get users onto the network," said Toikka. "Business users are the highest value to operators because they travel a lot."

Alekstra now has 12 large customers onboard, such as McDonalds, G4S, the state of Connecticut, and others. But the second step was to figure out how to efficiently bill incumbent networks across the world to provide the mobile and data services.

As long as the area has internet, Alekstra can plug in their billing API to the system and run everything remotely. They can expand around the world easily because in most countries wireless phone service is running through two different companies in order to prevent anti-competitive practices. The first is the incumbent network, who runs the pipes and must legally provide network access to any carrier. The second is the service provider who purchases services from the incumbent network and sends you the bill.

Apple (News - Alert) and Google both have announced intentions to become global operators, but despite the easy technical challenges, Toikka said it takes years to build the efficient billing relationships with incumbent networks all around the globe; the billing systems are just that fragmented, complicated, and just not designed for easy plug-and-play.

Alekstra has positioned themselves to get acquired in the next 24 months, but unafraid to take on the world by themselves. On the acquisition side, Toikka mentioned Apple many times, and pointed out that iPhones actually make up 74 percent of all business phones, their key market. Without an acquisition Alekstra plans on running an IPO and becoming a stand-alone operator by the first half of 2014, offering services to both business customers and consumers.

A huge shift in the market is going to take place whenever Alekstra goes live. Compared to the giants like TeliaSonera (News - Alert) and AT&T, Alekstra is lightweight. AT&T for example has 3500 employees per one million customers, while Alekstra needs only around 0.7 for the same amount. As long as internet is available, they can establish an API to the operator's billing system and run everything remotely. The potential for this type of network is huge as the mobile industry has aggregate revenues of 1.5 trillion.

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