Category: (4) eTOM Process Type
Process Identifier: 1.6.12.1.3
Original Process Identifier:
Maturity Level: 3
The settlement process is the accounting practice that is responsible for the determination of balance from the aggregated remuneration, charge, service direction, and intermediate parties the prime outcome of the settlement part of the overall process.
The settlement process is the accounting practice that is responsible for the determination of balance from the aggregated remuneration, charge, service direction, and intermediate parties the prime outcome of the settlement part of the overall process. Historically, the settlement process for an international telecommunications service provider was described as international telecommunication accounting practices that distinguished between remuneration of the corresponding carrier in the country of destination or transit for the delivery of its traffic and the charge in national currency collected by an operator from its customers for the international facilities and services provided. In some countries, "settlement" colloquially also describes the overall end-2-end process, but as can be seen from ITU and CCITT definitions, this is not totally accurate or encompassing all process elements needed to fulfil the outcome. Hence, this document will refer to settlements in its relative context (aligned with ITU). Since the last two decades other types of services between carriers have also been included that for all kinds of traffic (i.e. differentiating also services like messages) and settlements were practiced with other business parties. According to CCITT Recommendations D.150 and D.155, which concern tariff and accounting practices in the international telephone service, the carrier in the destination country can be remunerated on the basis of a flat-rate price per circuit, on the basis of the traffic units carried, or through a procedure whereby accounting revenue is shared between terminal operators. Under the flat-rate price and traffic unit price procedures the carrier at the destination establishes its prices broadly based on the cost of the international circuit section it provides, the use of its international exchange (gateway) and the national extension. Under the accounting revenue division procedure the value of traffic in each direction between two corresponding international carriers is multiplied by a mutually agreed tariff or "accounting rate" to give an accounting revenue which is "in principle, shared equally between the (carriers) of the terminal countries in respect of each traffic direction". In theory, international carriers can agree on other than equal shares when their costs or the extent of the facilities that each provides vary significantly; however, often, in practice accounting rates are shared 50/50.
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