Operators have been forced to push profitability to the top of their agendas in the face of falling ARPUs, increasing debt levels and the general crisis of confidence that is affecting all aspects of the telecoms market.

However, through fraud and poor internal processes, a typical telco can lose up to 15% of its total revenues! An effective revenue assurance system therefore offers an important and achievable way of increasing profitability and should be seen as a profit centre, rather than as a business overhead. Often not all the factors that contribute to revenue leakage are being taken into account so many telcos considerably underestimate the amount of revenues they are losing.

Containing revenue leakage

To stem the revenue leakage, telcos need to set up a total, end-to-end revenue assurance strategy. This requires the operator to commit to three things:

§ Setting up a multi-disciplinary team, which will need to identify all sources of potential revenue leakage and establish priorities of the revenue assurance policy
§ Enabling direct reporting to a board-level executive
§ Encouraging a revenue assurance culture throughout the company.

The hardest of these three is to change the company culture but it is vital to ensure the concept of revenue assurance is embedded in the whole culture of the organisation. Staff need to take potential revenue leakage into account in their daily work. This involves them:

§ Taking personal responsibility for their work
§ Thinking like the owners
§ Thinking about the customer
§ Communicating
§ Knowing what is important and doing the right things at the right time.

The biggest challenge

Operators face particularly serious challenges when consolidating systems, processes and people, inherited through acquisitions or mergers. A good example is the UK cable industry, where some 70 licensees have now been amalgamated into two major players, Telewest and NTL.

NTL tackled the problems it faced by outsourcing its BSS systems. Telewest however, decided to address the issues by forming a multi-disciplinary team to tackle the problem. It inherited 63 switches and 15 billing systems when it acquired or absorbed other licensees!

Telewest’s revenue assurance initiative resulted in:

§ A reduced revenue leakage
§ Additional revenue of approximately £2 million per annum
§ Faster provisioning
§ Reduced costs through improved network utilisation
§ Improved customer service

This shows the range of benefits that can be achieved through an end-to-end revenue assurance initiative.

What you need to know about revenue assurance

The term ‘revenue assurance’ is on everybody’s lips today, but there is wide variation in what is meant by the term.

In some organisations, the term ‘revenue assurance’ is used primarily to mean the process of measuring achieved revenue against forecasts, and accounting for any discrepancy. Thus it is a process driven by the marketing and accounting departments, although information derived from most parts of the organisation will be evaluated.

In other companies, revenue assurance is regarded as the verification of the amount being billed. Many companies exist that will offer to examine a company’s billing records and crosscheck these against the amount billed on/or against the flow of traffic through the network.

More generally, revenue assurance means everything involved in ensuring that the maximum amount of revenue comes into the organisation, and that all leakage in the system is rectified.

The revenue assurance team

Source: Chorleywood Publications