GSM Association

Official Document: BA.04

Settlement Methods
4.2
24 October 2008

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GSM Association
Official Document: BA.04

Table of Contents
SETTLEMENT METHODS.................................................................................................3
1. GENERAL SETTLEMENT METHODS........................................................................3
2. SETTLEMENT OF DISPUTED AMOUNTS..................................................................3
3. SETTLEMENT OF THE INVOICE AMOUNTS...............................................................4
4. BANK CHARGES...................................................................................................6
DOCUMENT MANAGEMENT.............................................................................................8

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GSM Association
Official Document: BA.04

1. SETTLEMENT METHODS

GSM Operators whose Customers roam internationally or use other services of networks
other than their own HPMN will be billed in respect of the services used. It is important
therefore that the invoicing party should have confidence that their bills will be paid in a
timely fashion.

1. GENERAL SETTLEMENT METHODS

1.1 Settlement of invoice amounts shall be effected as agreed according to the

Agreement.

1.2 The GSM Association recommended settlement methods are the following:

- (1) Direct Full Payment without Currency conversion Direct Payment in

the Local Currency of the invoicing PMN Operator as indicated on the invoice
and/or credit note.

- (2) Direct Full Payment with Currency conversion - Direct Payment in the
Local or Payment Currency of the invoicing PMN Operator as calculated from
the SDR amount indicated on the invoice and/or credit note.

- (3) Net Settlement - Net Payment in the creditor's Local or Payment

Currency, calculated from the net SDR balance obtained by offsetting the
invoice amounts for the two directions against each other.

The payment method is described in AA.13 Annex C3.2.

1.3 PMNs may bilaterally agree on other settlement methods (e.g. by use of any other
financial clearing house).

2. SETTLEMENT OF DISPUTED AMOUNTS

2.1 Unless otherwise agreed and in order not to delay the settlement process, payment
for undisputed amounts shall be made by the agreed due date (as stated in the
Agreement). Dispute resolution shall follow the process described in BA.01 If the
debtor is ultimately found liable for the disputed charges, the interest rate as stated
in the Agreement shall be applied to the disputed charges beginning from the
agreed due date of the invoice from which the dispute arose .

However if the disputed amount is less than 7.5% of the total invoice or ten
thousand (10,000) SDR, whichever is the lesser amount, then payment by the
debtor will be made in full. If the debtor is ultimately found not liable for the disputed
charges, it can then submit a request for a Credit Note to the creditor according to
the process described in BA01.

2.2 Non settlement should only result from e.g. bankruptcy or other financial problems
and not from a dispute as to the amount payable.

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2.3 The general rules concerning the right to claim for disputed amounts and the
resolution of these claims when no agreement has been reached are detailed in
BA.01.

3. SETTLEMENT OF THE INVOICE AMOUNTS

3.1 Interest Charges

Due date of the monthly invoices has been agreed between operators, the due date
is stated in AA.13 C3.2 duly signed by the operators.
If the payment is not received by the creditor by the due date, creditor has a right to
charge an interest amount on the overdue amount (unless there is a dispute).
Interest rates have also been agreed and stated in AA.13 C3.2.

3.2 Settlement Currency

Operators may change the currency, which they agreed for settlement of roaming
and interworking charges. In case, an operator would like to change the currency,
the AA.13 C3.2 or the relevant interworking agreement must be re-negotiated and
the date from when the change take effect agreed and a new AA.13 C3.2 signed by
the operators.

3.3 Payment Notifications

Debtor should send a payment notification by e-mail to the creditor which contains a
detailed payment information of the payments made. This will help creditor to match
the payment amounts with the related invoices accurately. Payment notifications
must be made available within 5 days of the payments made.

3.4 Changes to Bank Account

Operators might change bank account that they declared for the settlement. The
amended information must be indicated in AA.14. Operator should notify his
Partners via email to access his latest AA.14 via the InfoCentre.
Operators should only consider the bank account information in AA.14. Any given
information regarding bank accounts on monthly invoices or other sources must be
ignored.

3.5 Settlement of Small Amounts

It shall be common practice for roaming partners to settle charges for roaming traffic
on a monthly basis.

However, the due amounts associated to the settlement of roaming traffic of many
roaming relationships are often quite small, sometimes less than the bank fees
associated to the execution of a payment.

This can happen when a particular roaming relationship does not generate a high
volume of roaming traffic or when the inbound roaming traffic outbalances the
outbound roaming traffic by a small amount, when using the Netting Procedure.

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Official Document: BA.04

When this is the case, the two parties may agree in implementing a specific
settlement procedure for small amounts (annually, quarterly, etc.).

3.5.1 Optional Use of Debt Threshold

When roaming charges are quite small, the two parties may agree on the definition of a
debt threshold of usage that will trigger a payment. The VPMN will produce an invoice
each month, but the HPMN will pay the VPMN either on an annual basis, or when the debt
threshold has been reached.

One criterion to set such debt threshold could be to calculate bank charges for one year
and compare it to the actual revenue associated with that partners roaming traffic.

In case different settlement currencies are requested by the two parties, equivalent debt
thresholds have to be defined for both currencies.

Having agreed the applicable debt thresholds, each party will act as follows:

For each invoice period and for each new due amount resulting from the agreed settlement
method, the resulting debtor will add this due debt amount to the total of previously due
debt amounts not yet settled.

In case the new total of due debt amounts will exceed the applicable debt threshold, the
debtor will execute a single payment transaction to settle the total of due debt amounts, that
will then be reset to zero accordingly;
Otherwise, the total of due debt amounts will be carried forward to the next invoice period.

However, each party agree to settle the total of due debt amounts once per year during one
specific invoice period, to be agreed by the parties, and independently from the previous
rule. This will ensure that any outstanding due amount will be settle at least once per year.

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GSM Association
Official Document: BA.04

Example Scenario:
Roaming Relationship between PMN A and PMN B
Agreed Settlement Method: Direct Payment
Debt Threshold for PMN A: 800 USD (PMN Bs settlement currency)
Debt Threshold for PMN B: 500 EUR (PMN As settlement currency)
Agreed invoice period for yearly settlement: April

PMN A (Received Invoices)

Invoice New Due Current Total Debt Executed
Period Debt of Due Debt Threshold Payment
Amount Amounts Transaction
2008-05 125 USD 325 USD 800 USD -
2008-06 225 USD 550 USD 800 USD -
2008-07 230 USD 780 USD 800 USD -
2008-08 150 USD 930 USD 800 USD 930 USD
2008-09 200 USD 200 USD 800 USD -
2008-10 250 USD 450 USD 800 USD -
2008-11 220 USD 670 USD 800 USD -
2008-12 180 USD 850 USD 800 USD 850 USD
2009-01 215 USD 215 USD 800 USD -
2009-03 190 USD 405 USD 800 USD -
2009-04 170 USD 575 USD 800 USD 575 USD

PMN B (Received Invoices)

Invoice New Due Current Total Debt Executed
Period Debt of Due Debt Threshold Payment
Amount Amounts Transaction
2008-05 35 EUR 60 EUR 500 EUR -
2008-06 25 EUR 85 EUR 500 EUR -
2008-07 15 EUR 100 EUR 500 EUR -
2008-08 70 EUR 170 EUR 500 EUR -
2008-09 35 EUR 205 EUR 500 EUR -
2008-10 30 EUR 235 EUR 500 EUR -
2008-11 45 EUR 280 EUR 500 EUR -
2008-12 20 EUR 300 EUR 500 EUR -
2009-01 25 EUR 325 EUR 500 EUR -
2009-03 10 EUR 335 EUR 500 EUR -
2009-04 20 EUR 355 EUR 500 EUR 355 EUR

4. BANK CHARGES
Where bank fees occur, any such expenses imposed by the debtors bank(s)
including intermediate and correspondent banks used by the debtor to make the
payment, shall be borne by the debtor.

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Expenses imposed by the creditors bank(s), including payment expenses imposed

by intermediate and correspondent banks used for receipt of the payment by the
creditor, shall be borne by the creditor.

In the case where the debtor pays in a different currency than agreed in the
applicable annex or pays the wrong bank account, the creditor has the right to
request a credit from the debtor for the extra cost

Figure 1 - Bank Charges: Responsibility Overview

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GSM Association
Official Document: BA.04

DOCUMENT MANAGEMENT

Document History

Brief Description of Approval Editor /

Version Date
Change Authority Company
3.0.3 August Document Classification Update BARG #nn
1998 EMC #nn
3.1.0 October Approved at MoU Plenary 40
BARG #nn
1998
3.2.0 eVote
EMC #nn
3.2.1 April 2000 BARG Doc 183/99 noted as a
non-strategic change request at Plenary #43
Plenary 43.
3.2.2 November BARG Doc 238/01 approved as a
2001 non-strategic change request at BARG #65
BARG#55
3.3.0 August BARG Doc 144/03Rev1 approved
2003 as a strategic change request at BARG #61
BARG#61
3.3.1 March m-CR 011 to BA.04 BARG Doc
2005 65_043 approved at BARG#65 To
BARG #65
improve quality and purpose of
document
4.1 September m-CR 012 to BA.04 BARG Doc
2006 68_012Rev1 Removal of
BARG #68
reference to Settlement
Procedures no longer in AA.13
4.2 October m-CR 013 to BA.04 an update to
2008 support HPMN Liability for
Roaming Hubbing Scenario
(BARG Doc 72_019)
m-CR 014 to BA.04 Settlement of
Small Amounts (BARG Doc
72_039)
m-CR 015 to BA.04 Removal of
Credit Vetting Process (BARG
Doc 72_040)
m-CR 016 to BA.04 New section
Marcel Stevens
settlement of Invoice Amounts BARG #72
(BASE)
(BARG Doc 72_041)
m-CR 017 to BA.04 Settlements
methods in line with AA.13 (BARG
Doc 72_042Rev1)
m-CR 018 to BA.04 Details on
who is liable to pay applicable
(BARG Doc 72_043)bank charges
(when they occur)
m-CR 019 to BA.04 to change
Subscriber to Customer (BARG
Doc 72_062)

Other Information

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GSM Association
Official Document: BA.04

Type Description
Document Owner BARG - FCSIG
Editor / Company Marcel Stevens (BASE)

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