Look at the centre bottom of Subex’s home page and you will see a curious thing: a link that is not a link. It reads “Operator Attitudes to Revenue Management Survey“, and if you read the HTML source, it is obvious there used to be a link to another webpage, but it has been stripped out. Going back and checking facts, the most famous survey in the RA industry was last performed in 2007. That was the fifth year running that Subex had engaged research firm Analysys to survey estimates of leakage from around the world. This survey with its seemingly always-growing X% percent estimate of leakage, was guilty of spawning opening paragraphs of a few hundred thousand consultant’s reports, all of which began the same way:

“Average revenue loss in telecoms operators is [scary number]%, which equates to a loss of US$[scary number] every year. Because of that alone, this report has been proven to be worth the US$[scary number] you paid for it, even though all we did is copy an estimate quoted in somebody else’s survey* and offer no real facts to support the claims made in the first sentence.

*or maybe we just copied the opening paragraph of somebody else’s report and never even read the survey”

Of course, I joke. Nobody wrote the second sentence, though if the reports had been written by lawyers I expect there would have been many more caveats about the mental leaps that got people from ill-defined estimates to absolute conviction of revenue loss in every business to justification for any and every activity designed to reduce leakage, whether suited to the needs of the telco or not.

I take the disappearance of the survey to be a positive sign. The survey is no good unless it scares people, and there was always going to be a problem scaring people every year. To begin with, the temptation is to always make the results scarier each year, just like nobody advertises a horror movie by promising fewer chills and frights than in previous films. But that just leaves everybody at risk of explaining why things keep getting worse, despite all the extra money and jobs for revenue assurance. After a while, the CFO’s and CEO’s were going to get fatigued with stories about how much is lost, and start asking questions why their business was not noticeably richer by the promised billions of dollars, and noticeably more successful than its competitors as a result. The disappearance of the Subex-Analysys survey is a positive sign that the revenue assurance industry is maturing, or as I prefer to put it, growing up.

I must say that I read the China Telecom case study with a great deal of interest.

Within that brief 5 page pdf that Hongtuan has provided is some fascinating insight and some of the things that most stood out to me were:

• Stating that the initiative had an ROI of 6 months based on the leakage identified, but that the vendors probably invested more effort than they were compensated for.
• Knowing that there may be 93 RA opportunities in China means that any effort to integrate these systems to reduce cost must also be an opportunity and, potentially, represent a far more complex and significant RA challenge to ensure they are correct.
• The greatest challenge was the people in the operational areas. I am sure there were technical issues around data acquisition, business rule extraction, processing and exception analysis and iteration, and even how to fix the identified leakages but the fact that these issues were not as significant as the people issues is probably not unfamiliar to many of us.
• The source of biggest leakage was around data synchronisation. For me this is one of the big 3 most likely leakages (alongside event record processing and bill calculation accuracy - all of which were assessed). I suspect that this may be one of the most difficult issues to address as customer contact may be needed for each individual case identified.
• Lastly, the lack of findings in price plan accuracy, despite many rates and some complexity there though I note the comment that it was difficult to verify the accuracy of these. This perhaps infers that there may still be leakage out there, it just hasn’t yet been found.

My thanks to Hongtuan and China Telecom for providing this. Next piece of reading: Lee’s C&W presentation.

We have a fascinating new case study to share with you all, exclusively available from talkRA. Hongtuan He, RA/FMS Principal Consultant at HP, tells us about the recent RA trials performed by Subex, cVidya and IBM in China Telecom. This study confirms that Chinese operators have adopted the revenue assurance mission.

The case study is also available to download from our new downloads & links page. We will keep adding more case studies and links to other useful sites in future.

I found this article and wanted to briefly share it with you. It hardly mentions revenue assurance in telecoms, but I think it gives a useful insight for any practitioner who wants to think beyond telecoms and would like to understand how there are analogous problems and techniques to solve them in other industries. The article gives a succinct but sweeping overview of how BI is used across a wide range of business models to improve the bottom line.

TEOCO, the revenue management software vendors, and Netezza, makers of data warehouse appliances, have partnered to deliver a new network cost management tool. It promises to analyse months of detailed CDR data, giving a more complete picture than is possible using sample or summary data. The tool combines TEOCO’s software with Netezza’s platform to give an all-in-one appliance. You can read the press release here.

Only time will tell if the product is a success, but this partnership suggests that the gap between the niche of revenue management and that of general-purpose business analytics keeps getting smaller.

With banking being the hot topic at the moment, I thought it would be a good idea to look at the next generation of Telecoms services - the mobile credit card(mobile wallet). For years the Telco industry watched the banking sector with envy, they’ve seen them making up to 7% on every credit card tansaction and how - by having a fixed line telecoms network into all retail outlets and (supposedly) oodles of cash to lend to the consumers. 

The mobile industry spotted the synergies between the banks and themselves and decided that they could offer the same services(all be it by sitting on the back of the existing architecture),  the operators have acquired banking licenses and now a few years on, the service would appear to be ready for launch - the idea being that you’ll swipe your phone instead of your credit card

So the question/discussion I wanted to have is: What does this all mean for Revenue Assurance?

There are a few topics that need to be considered:

Regulatory - currently operators only have to deal with Ofcom, however by offering credit card services things like the consumer credit act come into play as well as bodies like the FSA

Technically - To offer credit card services, the operators are going to have to add new systems - a seperate billing system  for credit card transactions(I would hope), seperate accounting, third party revenue share systems, maybe seperate CRM.

Fraud - Obviously the scope for fraud grows 10-fold by introducing consumer credit. Credit card companies charge high interest to cover the cost of fraud, so what are the implcations for the operators?

Revenue Assurance - where do we start? There will be the need for transactional monitoring systems ie all events pass from A to B successfully, rating assurance -  interest charges are applied correctly, billing verification, third party revenue share assurance etc etc. 

 For anyone thinking this doesn’t sound too complex consider the following scenario : I pay for my mobile phone bill via direct debit to my mobile credit card, upon receipt of my phone bill I notice that I have been charged 2 line rentals. I contact the operator and tell them of the mistake and they promise to reverse the mistake on the next bill. I do not pay off my credit card this month and as a result pay interest against the balance - including the extra line rental. Who owes me the interest?

The Mobile Credit Card is probably going to be the single biggest change to Revenue Assurance that we will ever see. Whether the operators push forward with it in the current economic climate is still to be seen, however if they do - what do we need to do to be ready?