Charge volume minimization in liberalized telecommunication markets

The liberalization of telecommunication markets allows the choice of call provider for each single connection. This leads to the question of which provider has to be chosen to minimize the charge volume for all the calls over an accounting period. In contrast to the simple derivation of routing policies found in existing least cost routing (LCR) tables, the incremental and global quantity discounts granted by providers are taken into account in the optimization approach developed in this paper. The dynamic, non-convex, non-linear optimization problem arising from the minimization of the charge volume is solved using the evolutionary optimization method of genetic algorithms. The mathematical formulation of the problem, the genetic algorithm used, the limitation of the search space, and the quantity discount regulation developed are presented. The optimization results obtained by applying the concept to the call data of the University of Hanover are analysed and discussed. The paper concludes with an outlook for the implementation of LCR policies.