Archive for the News Category
Posted by: Eric in News, Opinion
When I saw Stratecast’s 22 predictions for the comms industry in 2015, my first thought was: it is easy to make fun of them. On the one hand, they predict that broadband regulation will be a big deal in the USA. Err… I think anybody – and I mean literally anybody, not just telco employees – who follows US news would have noticed US President Obama making a YouTube video asking for lots more broadband regulation. So this Stratecast prediction falls into the ‘sun will rise tomorrow’ category. On the other hand, another big story that closed the year was the so-called cyberwarfare between North Korea and the USA. Obama was involved in this story too, talking big about Sony’s handling of the malicious hacking of their systems, which was quite likely conducted by operatives working for the North Korean government. This culminated with lots of fuss about freedom of speech, as the entertainment company withdrew their comedy film about North Korea’s leadership from cinemas, and premiered it via the internet. But amongst their ‘secure networking’ predictions, Stratecast made no mention of increased government interaction with the private sector in order to prevent malicious hacking sponsored by enemy nations. So the report includes at least one blindingly obvious prediction, whilst failing to include another blindingly obvious prediction!
But then I had to think again. I was drawn to read the report because of this prediction:
Margin Assurance becomes a management discipline as purpose-built analytics help address core business needs.
I was going to lampoon this prediction for lots of reasons:
- Does this mean margin assurance was not a ‘management discipline’ in 2014, or the year before, or the year before that? When I joined Cable & Wireless in 2007, colleague Guy Howie was building superb tools to assure margins. And in 2010, when the TMF RA team started talking about extending the definition of RA to include margin assurance, I chided them because the original definition had been consciously written to include activities like margin assurance within the scope of RA. In short, margin assurance has long been a management discipline. Different telcos progress at different rates, but there is no need to insult everyone who has been doing margin assurance for many years by suggesting that people will only start doing it properly in 2015.
- What does the phrase ‘purpose-built analytics’ mean, and how does it reflect actual trends? Has there long been proprietary analytic software that could be used for margin assurance if the right data was supplied? Yes. Have RA vendors long supplied analytics suites incorporating functionality to perform ‘margin assurance’? Yes. Have real telcos been actively using such third-party software to assure their margins? Yes. Is it the trend in software to build analytic solutions designed to satisfy specific narrow purposes? No. On the contrary, the trend is towards general-purpose analytical capability being made more widely and easily available for flexible use all around the telco.
- The need for margin assurance is apparently prompted by tightening margins. But what is new about that? Margins did not suddenly narrow in 2014. Margins have been eroding for many years, depending on the maturity of the market in which the telco operates. The rationale for this 2015 ‘prediction’ has been valid for a decade, so why make the prediction now, and not before?
But then, I had a change of heart, and decided not to make fun of Stratecast. I read the full text of their prediction closely, and realized Stratecast are not guilty of making bad predictions. They are guilty of much worse: of making vapid predictions that rely on weasel words. You might think they are predicting something, but they are predicting nothing at all, because it is so hard to imagine an outcome that would clearly contradict it. Here is everything they had to say about margin assurance in 2015:
Rising from the roots of revenue assurance and fraud management, Margin Assurance is a business discipline focused on maximizing profits.
So far, they have predicted nothing, and said nothing interesting. But they did demonstrate inconsistency in how they capitalize words.
CSPs globally continue to see rising costs as data volumes increase from the roll-out of new network technologies, and through engagement in changing business models, including a sharp increase in partnerships.
Still no prediction. And nothing interesting.
CSPs are also seeing flat revenues or at least revenues that are not rising as quickly as their costs.
***Yawn*** Please tell us something we do not know already.
The result is tightening margins.
***Really big yawn***
Using the right analytical tools associated with the right types of data,
As opposed to the wrong tools, with the wrong data? How stupid do they think we are?
the Margin Assurance discipline in 2015 will
At long last, a prediction is coming!!!
become engrained in all major Operations and Monetization processes.
And that was it. That was all they said on the matter. But what does ‘become engrained’ mean? It means nothing. If you have been doing margin assurance for the last 10 years, Stratecast could argue it was not sufficiently ‘engrained’. And whatever margin assurance you conduct by the end of 2015, that could argue it is now ‘engrained’. In ‘major’ stuff. Though not necessarily in the ‘minor’ stuff. You will do it for major stuff like your processes, as opposed to all those non-processes telcos have for operating things and making money. The more you look at the words spouted by Stratecast, the less there is to see, until you realize you have analysed pages of documentation that told you nothing at all.
I closed the talkRA review of 2014 by saying the increasing complexity and interplay of several key trends in assurance made it impossible for me to predict what will happen in 2015. An honest analyst admits the limits of their knowledge, and when they can no longer make reasonable extrapolations from the data they possess. Sadly, Stratecast lack that integrity, and feel obliged to make predictions even when they have no idea what will happen, and no data to support their hunches. What happens in 2015 will be determined by what you do, not by what they say. So go ahead and do something of substance, without wasting time on empty predictions.
Posted by: Eric in News, Opinion
Would you invest in a business that loses money? Probably not. Or, at least, you are more likely to invest in a business that makes money. That is why investors read the numbers reported in the press, and rely on auditors to check financial statements. What if you already own the business, and were considering investment in some new machinery? Again, you might buy the machinery if you thought it would generate profits, but not if the cost outweighs the returns. That is why accountants go to a lot of trouble to map costs to assets, and hence determine which assets are driving profits, and which are not worth keeping. So would you make a major investment decision, knowing you will be ignorant of the returns generated by the investment? That is exactly how most telcos are run, according to a new report from the TM Forum. Net global capex network investment is estimated to have cost USD354bn in 2014. In response, the TMF’s Network Asset Management team conducted a survey into how telcos track and manage their network assets and the returns they generate. The findings make for grim reading, including the fact that 57% of surveyed telcos had no data on whether existing assets were generating a positive return or not.
I found the survey results to be confusing in some respects. For example, 29% of telcos stated they do not bother to measure any returns generated by assets, after they have been deployed. But what are the other 71% measuring, if more than half of telcos have no data to determine if an asset is underperforming? Perhaps they are measuring returns across a class or category of assets, which may be some help but still fails to provide sufficient detail to improve future investment decisions.
The conclusions about data integrity were equally grim. On average, respondents believed their network inventory records and fixed asset registers were only 74% accurate. Their expectations were also low, believing that accuracy levels below 90% would still be ‘acceptable’.
Reading between the lines, I draw my own conclusions from the messages about poor data quality and scrappy methods for measuring returns. Determining the profitability of a network asset would involve a lot of hard work, so mostly we do not bother. This is understandable from the perspective of the poor schmo who is asked by his unreasonable boss to generate numbers without receiving the data, tools, and thanks that such a task demands. But from a collective, corporate perspective, this blind spot in decision-making is nothing less than insanity. How many of you have worked in a telco where the stationery cupboard was locked to prevent people using too many staples, or where your phone calls were scrutinized to determine they were all made for genuine business reasons? These things are controlled because they are easy to control, but the values involved are trivial. In contrast, the amounts spent on network capex are enormous, but hardly anyone can say where the money was best spent, or where the telco failed to generate the results it hoped for. If we do not gather the knowledge, we cannot learn from the past. In the case of network asset expenditure, that means we are doomed to repeat our most expensive mistakes.
It is funny how governments get really keen to protect their people, when this coincides with threats to the amount of tax they collect. Ghana’s Communications Minister, Dr. Edward Boamah, has promised a crackdown on simbox fraud; you can read the story at GhanaWeb. Boamah said he was keen to screw more tax money out of people making phone calls… ahem, I mean he promised to keep the cost of international calls artificially high because it is a great way to make money… ahem, I mean he was deeply concerned that…
People are losing businesses because when you receive a call it appears [with a] Ghana number… sometimes you think it is somebody calling you to ask for [a] favour so you don’t even pick, so you miss an important call.
Yeah, right. Who would doubt that missed calls caused by inaccurate CLIs is a top priority for Ghana’s government?
Are some mobile operators pushing their luck, when they ask victims to pay huge bills after criminals steal their phone? That is the conclusion of Richard Colbey, a British lawyer who recently took up the case of Osian Rhys Edwards, a schoolteacher who fell victim to the criminal gangs that target tourists in Barcelona. You can read the full story in The Guardian.
Vodafone barred the stolen handset after GBP15k (USD23k) of premium rate calls were racked up, within just hours of the theft. Rhys Edwards claimed he informed Vodafone of the crime but the operator said it had no record of his call. Instead, Vodafone pursued payment in full, and then offered to reduce the bill to GBP10,500 (USD16,440) whilst allowing Rhys Edwards to pay it off over many years. Vodafone also threatened to damage his credit rating. But given that Barcelona is known to be afflicted by this criminal scam, does it seem reasonable to allow such heavy premium rate use, before the telco intervenes?
Vodafone’s behaviour so outraged Colbey that he agreed to represent Rhys Edwards for free. His comments on Vodafone’s legal position are worth reviewing.
Vodafone’s position looked legally flawed for several reasons…
What I thought particularly outrageous was that Vodafone was threatening to report Osian to a credit reference agency without first getting a court judgment. The power large organisations have to do this gives them an unfair advantage in any dispute with consumers…
I set out Osian’s case in a forcefully expressed letter to Vodafone’s “General Counsel” (a US term for chief lawyer), demanding, somewhat unrealistically, a complete capitulation and compensation for the stress within 24 hours… We huffed and puffed in emails as litigation lawyers do, and within a few days had reached agreement that Osian would pay nothing for calls after his phone was stolen, but wouldn’t actually get any compensation. I expect a judge would have reached the same conclusion…
To its credit, and slightly to my surprise, Vodafone did not insist the settlement was subject to a confidentiality agreement. I hope that this will encourage others faced with similar claims by phone companies to stand their ground.
The issue has trundled on for a decade and no company has yet wanted to test its position in court. This is almost certainly because the companies are getting legal advice largely in line with my own view that they could not win, and they would have no choice but to change their policies once a precedent was established.
The UK Revenue Assurance Group is holding their Winter meeting tomorrow, and the theme will be Big Data, with a packed schedule featuring speakers from the UK, USA, and even Australia! Everyone who has an interest in revenue assurance is welcome to join us in London – if you have not received an invite, then there is still time to contact the organizers and get yourself added to the guest list.
Tomorrow’s keynote speaker is Julian Hebden, Head of Big Data at Telstra. He will be joining us by videoconference to answer this question: is assurance the killer app for Big Data? There will also be talks by British Gas about the implications of smart metering, from Cartesian about new opportunities for data analytics, and from Elutions about asset and power management. The day closes with two speakers from the USA. Peter Mueller, CTO of ATS, will give his views on what Big Data will teach telcos, and how telcos might be surprised by what they learn about their customers, and about themselves. Finally, Dan Baker of TRI and Black Swan will give his overview of the range of Big Data solutions now being marketed. Phew! For a ‘small’ meeting of revenue assurance practitioners who do not like to publicize themselves, the RAG always delivers a great agenda! Factor in the splendid lunch, lively debate, networking, coffee and doughnuts, ultra-modern real-time surveys, old school gossiping, and an after-hours trip to the pub, and it is no wonder that RAG is the must-attend event for every RA pro within range of London :)