Archive for September, 2009

They are spoken of less often these days, but we still keep hearing about those pesky ‘estimates’ of ‘average’ leakage. RA software vendors, obsessed with the profit (or loss) they will be reporting to investors each quarter, like to exaggerate the prevalence of leaks to help secure a sale, much like a burgular alarm salesman is going to exaggerate the number of robberies if it helps him increase his commission. Exaggeration can generate a sale in the short run, though in the longer run, RA vendors inevitably get undermined by the observation that industry estimates never go down. ‘Estimates’ of leakage remain steady or go higher every year, no matter how many hundreds of millions of dollars is spent on RA software in the meantime. That rather implies that the net benefit of RA is negative: every year the telco industry spends more on RA, yet every year the estimates of leakage get worse!

We all know the reasons why the numbers are not reliable in the way presented, but my favourite bugbear is the idea that there is an “average leakage” for intercarrier traffic. Think about it. Take every telco in the world. Estimate the net error when they pay each other for intercarrier services. What is the mean average leakage? Zero. We know that as a fact. We know it without estimates or data or guesswork or case studies or anything. If the purpose of the estimate was to get an average across all telcos, and we are only talking about intercarrier, then we know that one telco’s loss is equal to another telco’s gain. In short, errors in intercarrier billing and settlement are a zero sum game. If one telco is being charged too much, another is earning too much revenue. If one telco receives less than it should, another is paying for less than it used. Whatever gibberish you spout, there is no way to identify an average ‘leakage’ without also admitting to an average ‘gain’ that is equal and opposite. Yet vendors are so addicted to marketing spiel, they cannot stop themselves. Bang goes their credibility as they try to tell us a mathematical impossibility has been proven thanks to their very unscientific (and very convenient) observation. I just found this gem, courtesy of a cVidya-Stratecast report:

In the wholesale market, inter-carrier revenue leakage represents approximately 3 to 5 per cent of service provider’s total costs for traditional voice products, and in the range of 7 to 11 per cent for broadband products.

Perhaps cVidya are trying to say that service providers are always on the losing end of intercarrier errors. I bet they do not say that to their customers who sell traffic on a wholesale basis! To be fair to cVidya, they are not alone in falling into this trap. I once blogged about similar interconnect leakage hyperbole from Subex, though I am heartened to say I have never caught them repeating that mistake. And I know that cVidya’s people regularly read talkRA (IP works both ways – allowing us to tell where the readers are). So hello to everyone at cVidya, and please stop pretending that intercarrier error is all losers and no winners…

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Here is a tiny news snippet that caught the eye. Ericsson have reportedly offered to provide business consulting services to help India’s largest operator, BSNL, with customer segmentation and marketing of 3G. It sounds like no small deal. A BSNL official reportedly said

“Ericsson has offered a proposal where it will manage the entire marketing of BSNL’s 3G services including fixing tariffs, promotional campaigns and consumer feedback. We are considering it but no final decision has been made…”

What does this have to do with RA? In the source article for the story, the explanation for why Ericsson are qualified to offer help goes as follows:

“Ericsson has done similar projects in network consulting, revenue assurance etc with operators such as Telephonica (sic) and AT&T.”

This is a new development in the perceived status of RA. The implication is that executing a major revenue assurance project might now be considered relevant experience for managing the marketing of services. This should please my pal David Leshem, who often cites how RA should be repositioned as validating the marketing proposition, and not just plugging the holes in operations. The real question is whether this is just a superficial association of two big projects that Ericsson does not really think have that much in common, or whether this is an indication of a more fundamental shift in how RA is pitched relative to other business objectives.

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What should two revenue assurance vendors do when one is popular in the North American market but struggles to get out, and the other is popular elsewhere but struggles to get into North America? They should do a deal. That is what ATS and WeDo have just done. You can read the (slightly rearranged) press releases from WeDo here and from ATS here.

Without knowing the details, the deal should be a straightforward win-win which gives both vendors many opportunities to introduce their respective offerings to new customers. The match of WeDo and ATS product offerings is good although not perfect. ATS is a niche provider nearing saturation of the US market, whilst WeDo tries to offer a full RA product suite. SimCall, used to automatically validate switch logic, is the most popular product from ATS and should complement WeDo’s product offerings. On the other hand, ATS also sells Amadeus, a CDR analysis tool, which appears to compete with WeDo’s portfolio. SimCall is an undersold tool in global terms, partly because the market for it has not been grown through effective competition, meaning not many telcos have identified the benefit to be gained by an automated audit of switch translation. The deal should also help ATS to adapt SimCall to the different switch implementations found outside of the North America. WeDo, in contrast, is one of several full-suite vendors fighting to make headway in North America, which has historically been a difficult market for RA software. Headquartered in Portugal, WeDo used to underperform in English-speaking markets. WeDo’s 2007 purchases of Irish vendor Cape, and of British consultancy Praesidium was partly intended to address this, although there are more barriers to the North American market than simply speaking English. Some of WeDo’s rivals are currently paying a premium to establish their North American presence. It makes good sense to form a partnership with ATS, a business which has grown organically since it was founded in 1995 and has built a solid reputation in its domestic market.

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Subex has officially launched their ‘asset assurance’ solution. This uses network asset discovery to recover stranded assets and reconcile inventory to costs and revenues. Linking asset management to data integrity enables Subex to hybridize the capabilities in both halves of their business: the OSS/service activation wing formerly known as Syndesis, and Subex’s longer-established revenue management division.

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If I worked for cVidya, I am not sure how I would react to the news that they came tenth whilst competing for their latest award. They made it into the top ten, but would they be keen to have customers think of them as a ‘start-up’? The story was announced in Globes, sponsor of the Journey 2009 conference. Coming tenth is not bad, but cVidya is getting a little old to be described as tenth in a list of promising start-ups. The company was established in September of 2000, meaning they can enjoy a double celebration this month: 10th most promising start-up, and their 9th birthday ;)

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