Marcus Webb — Director, Carrier Relations Practice
Interconnect Margin Erosion
"Your interconnect agreements are priced against a traffic profile that no longer exists."
Most regional carriers signed their primary interconnect agreements between 2017 and 2021, when their traffic mix looked fundamentally different. SMS revenue was still material. International termination volumes were predictable. The big incumbents were negotiating from a position of relative parity.
Today you're running 40% more data traffic, 60% less voice, and your agreements still have minimum commitment clauses written for a world that doesn't exist. Every month you pay for capacity you can't use while over-purchasing on routes where you're actually constrained.
The fix is not renegotiation — it's restructuring. We remodel your actual traffic matrix against your current agreement terms and identify the specific clauses generating negative yield. In one recent engagement with a 340,000-subscriber regional carrier, we found $890K annually in minimum commitment penalties on three routes that could be restructured in a single amendment cycle.
"The agreement was written for a company that no longer exists. We just had to prove it with their own traffic data."
— Marcus Webb, on a 2024 MVNO interconnect restructuring
| Metric | Before | After | Delta |
|---|---|---|---|
| Excess MRC on unused minimums | $124K/mo | $31K/mo | −75% |
| Blended interconnect CPM | $0.0041 | $0.0029 | −29% |
| Route optimization savings | — | $890K/yr | recovered |
| Amendment cycle duration | — | 34 days | avg. |
Case metrics anonymized. Regional carrier, Southeast US, Q3 2024.