Leakage of Revenue In Telcos

Loss of Revenue in Telcos

All business systems suffer from a certain amount of inaccuracy, and accumulate irrelevant data. The key of the revenue assurance program is not to strive to completely eliminate all system inaccuracy, but to identify those issues that fall outside the normal tolerance levels.

Apart from typical leakage issues, there are other key areas where loss of revenue can be significant. This includes:

Product Portfolio Management
Under-utilised assets
Interconnect Revenue Loss
Network Routing Revenue Loss
Sales and Marketing based Revenue Loss

Using an opportunity map helps to identify which areas of loss will contribute the most to the business, should they be resolved. Through rational cost:benefit analysis, opportunities can be rationalised in terms of RA project ROI.

Telco Leakage Scenarios

To adequately address revenue assurance problems, the Telco must fully understand the different leakage scenarios:

Product Development Leakage

Failure to include cost of billing into cost of product introduction
Failure to build transaction collection capability into start up phase of product rollout
Failure to plan for rate plan updates to billing

Mediation Leakage

Failure to correctly filter records
Failure to balance batches
Failure to clear suspense files
Incorrect application of customer ID’s
Incorrect application of policies
Dropped CDR’s
Incorrectly formatted CDR’s
Duplicate CDR’s

Billing Leakage

Lack of clarity of billing segregation between systems
Usage permitted beyond billing stop point
Incorrect call plan set up
Incorrect entry of pricing tables or pricing plans
Over discounting – lack of clarity around profitability
Billing errors
Poor suspension management
Incorrect billing set up
Incorrect currency applied
Late billing
Incorrect billing measure applied – data volume rather than call time

Fraud Related Leakage

Internal Fraud
Theft of minutes or data packets
Theft of customer revenues
External Fraud
Indentity fraud
Usage fraud
Billing fraud

Collections and Debt Recovery Related Leakage

Failure to track old accounts
Misapplication of credits
Inefficient debt recovery policies
Ineffective debt recovery processes
Poor process feedback – to Sales, Marketing, Product Development
Credit Policy management
Errors in transferring from Billing to Accounts Receivable and General Ledger

Provisioning and Customer Service Leakage

Over provisioning
Over budget provisioning
Provisioning without notification to start billing
Improper update of customer status
Improper update of systems based on change in customer status
Physical circuits not ceased when account terminated

The objective of Revenue Assurance is to identify all of these activities as a revenue management chain, and ensure that revenue leakage risk is identified and systems put in place to ensure this is minimised and/or prevented. For this purpose, there are a number of standard procedures and methodologies employed under the banner of revenue assurance.

NEXT: Types of Revenue Assurance