revenue assurance in different sectors in telecom
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ACKNOWLEDGEMENT
We are extremely grateful to Dr. Tripti Dhote, Faculty, Management, Symbiosis
Institute of Telecom Management, Pune for her guidance. The continuous
superision ! "een interest #ere a constant source of guidance during our pro$ect.
We ta"e this opportunity to express our sincere gratitude to the institute for giing us
an opportunity to #or" on a year long research program #hich helped us explore a
different field of technology related to telecom. We #ould also li"e to extend our
than"s to our director sir, Prof. Sunil Patil and all our Faculty Members for theirinaluable guidance, constant encouragement made this pro$ect see the light of the
day.
ANIRUDH TALWARBONEY MATHAI
MANISHA P. TOPPOMEGHA SHARMA
PARAMVEER KHOSASAURABH THAKRAL
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ABSTRACT
The art of reenue assurance is no# undergoing a fundamental shift as
net#or"s conerge and metrics become more complex. . The scope of
reenue assurance strategies is #idening to include more and more touch
points as telecom understand that reenue%assurance isn&t as easy as it used
to be.
Our Main Areas o Con!ern in!"u#e$
Will '( enable the Telecom companies to cope up #ith the challenges
of gro#th and innoation)
'ole of '( in today*s +ypercompetitie mar"et.
olution of '( in accordance to the dynamic business challenges.
Significance of '( in Deeloped and Deeloping conomies.
Significance of '( #ith reference to ne# product launches, -- and
/ serices.
'ole of '( in turning ris" and opportunities into results.
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Con%en%s
&. Ti%"e o %'e (ro)e!%*. E+e!u%i,e Su--ar/. In%ro#u!%ion o Re,enue Assuran!e
Re"e,an!e an# 0us%ii!a%ion
Nee# o Re,enue Assuran!e
Benei%s o Re,enue Assuran!e
C'a""en1es a!e# in Re,enue Assuran!e
2. Resear!' Me%'o#o"o13. Ana"sis o ,arious re,enue s%rea-s
Pre(ai#
Pos%(ai#
Roa-in1
Va"ue A##e# Ser,i!es
In%er!onne!%
4. Pos% /G S!enario5. Con!"usion6. Reeren!es
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C'a(%er &
Ti%"e o %'e Pro)e!%
Ana"sis o re,enue assuran!e (ra!%i!es a!ross #ieren% re,enue s%rea-s o a
ser,i!e (ro,i#er
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C'a(%er *
E+e!u%i,e Su--ar
+istorically, 0'eenue (ssurance1 2'(3 referred to systems, processes, and
personnel responsible for analysing the billions of daily usage transaction records
generated and processed by a 4ommunications Serice Proider*s 24SP*s3 net#or",
5usiness Support Systems 25SS3 and, to a lesser degree, its 6perations Support
Systems 26SS3. The mission, in an effort to retain eery billable amount of reenue,
#as to ensure that no transactions #ere lost as they traersed each net#or" node
and system.
In recent years, the scope for '( has expanded considerably. Today, a modern '(
solution is a robust platform designed to address such functions as data
management, analytics, fraud control, #or"flo#, and results isuali7ation. Through
the experiences of the past, '( departments are no# a natural launch point for
strategic functions8 especially margin management and a nascent function "no#n as
business optimi7ation. In so doing, '( integration #ith enterprise data #arehouses,
business intelligence, and analytics platforms is increasing.
So, in our research #e hae tried to understand the dynamics behind the term
0'eenue (ssurance1. We identified arious reenue lea"age modes being net#or"
related, billing related, mediation related and many such more for all the reenue
streams of an operator i.e Postpaid, Prepaid, 'oaming, Interconnect and 9(S. In the
process #e understood arious facets of the operations and trac"ing mechanisms for
billing, mediation and rating. This helped us to gain an insight on the
interdependence of these and their cumulatie effect on 'eenue (ssurance.
We, in our report hae addressed these issues #ith the analysis of arious
ob$ecties of carrying out reenue assurance for a Telco. This report #ill also help
the readers to understand the arious challenges faced and techni:ues to address
0;ea"age Management and Preention1 and 0'is" Management1 #hich forms the
core of '( operations.
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We hae also carried out a study as to #hat #ould be the effect of adent of /
serices on 'eenue (ssurance. With the mar"et being drien to#ards more of data
usage than oice centric, the ariables inoled in proiding both prepaid as #ell as
postpaid serices #ould deepen the need of carrying out chec"s and balances of
reenue modes.
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C'a(%er /
In%ro#u!%ion o Re,enue Assuran!e
Re"e,an!e an# 0us%ii!a%ion
Indian telecom operators lose crores of 'upees eery year due to reenue lea"s and
other ris" factors. This problem has #orsened #ith the rollout of / serices and the
conse:uent gro#th in consumption of alue added serices that #ill boost data
transfer and do#nloads to ne# heights.
6perators continue to struggle #ith a ariety of issues from expanding theirsubscriber base in saturated mar"ets to managing stupendous subscriber gro#th in
mar"ets that are still deeloping. More often than not, telecommunication operators
#atch helplessly as crores of 'upees of their reenue goes unaccounted. 'eenue
lea"age is a fact of life, gien the technical and business challenges in this
complicated enironment. 4ompanies #orld#ide ta"e a ? lea"age in reenue
as normal. -o#, due to competitie pressures, companies are beginning to focus on
internally tightening their processes to curb reenue losses.(ccording to a recent surey, deeloping mar"ets face higher reenue lea"age than
deeloped mar"ets due to rapid gro#th and technological change. 9arious reenue
assurance research reports say that the degree of exposure lies in the range of
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operational policies by systems as #ell as personnel and infrastructure constraints
namely band#idth, security and facilities.
With the adent of / serices, communication serice proiders are proiding a
#hole ne# range of serices including triple play, ideo on demand, ideo streaming,
m%commerce etc. This means that complex 6SS, flexible billing options and next
generation charging gate#ays are being deployed, #hich has resulted in greater
aenues for reenue lea"age. The integration challenges #ith respect to technology
remain #ith / and ;T as these next generation systems need to co%exist and
interoperate #ith legacy systems. -ext generation serices come #ith their o#n set
of lea"age issues related to content settlement, adertising reenue settlement,
policy enforcement and real time rating and charging.
There needs to be strong enforcement of business rules and transparency in the
alue chain to minimi7e reenue lea"age across all the players in the ecosystem.
Today, the greatest challenge for operators is to establish a frame#or" to cultiate
sustained profitable gro#th. The enironment is competitie and it demands rapid
response from operators to eer changing business and technology enironments
but offers little flexibility and this is #here the reenue management comes in.
'eenue (ssurance is becoming proactie rather than reactie. arlier, it #as a
reactie function. 'eenue #as lost and then operators #ould try to find and plug the
lea"age. -o#, operators #ant to identify the loopholes een before they build up and
try and plug them. (s a result these efforts are being closely tied to areas li"e 5I,
analytics etc. (lso, the IT and net#or" side of the organi7ation are being realigned to
plug these reenue gaps. Most operators hae reali7ed that they need executie
sponsorships to run this, as loopholes can exist across the organi7ation and they
need a high leel drie to plug this.
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Nee# o Re,enue Assuran!e in Te"e!o- Se!%or
'eenue assurance has emerged in recent years to become an increasingly critical
component in the transformation of telecommunications operations. 'eenue(ssurance is the actiity, #hich is performed to detect a reenue lea"age and
subse:uently to preent the lea"age. 'eenue (ssurance assesses and measures
the core 'eenue Management 4hain. It guarantees that the 'eenue Management
4hain is functioning as it is specified. 4atering to the telecom frauds can be
considered as an xtended 'eenue (ssurance.
There are seeral factors contributing to focus on reenue assurance by telecom
operators
Re1u"a%or Pressure
4ontinued scrutiny and pressure by regulators mean today*s Telcos executies must
be able to point specifically and definitiely to proof for the numbers they report to
sta"eholders and the public. Sarbanes%6xley 2S6C3 and a host of other regulatory
re:uirements are forcing carriers around the #orld to rethin" ho# they trac" their
net#or" and billing actiities. xecuties no# re:uire more comprehensie and
transparent forms of reenue assurance 2'(3 to access the numbers and maintain
the necessary integrity.
Proi% Pressure
For most Telcos, the highly profitable days of the past are gone, and suriing to%
day*s competitie mar"et re:uires them to 0tighten their belts1 and discoer any #ay
possible to increase earnings. 5y determining ho# reenues are being missed, '(
can generate an essential source of preiously unreali7ed income.
Mer1er Pressure
Telcos that participate in a merger find their o#n special brand of reenue manage%
ment pressure. When multiple mediation billing and other systems from disparate
companies are forced to #or" together, it is increasingly difficult to "eep errors out of
the reenue management process.
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Con,er1en!e Pro!ess
The dream of each telecom operations manager is a #orld #here both the net#or"
enironment and the billing enironment function in a completely conerged
frame#or". 5ut the gradual migration to#ards this scenario increases pressure on
existing systems and operations to #or" at maximum capability and flexibility, #hich
ultimately generates more errors and ris"s.
Inno,a%ion Pressure
For telecommunications companies, the last fie years hae generated more radical
renoation of net#or" infrastructures and business operating assumptions than all
the years before that combined. ach month, hundreds of ne# technologies, prod%
ucts, price plans, and mar"eting approaches force net#or" and systems managers
to continuously stretch and challenge their reenue management capabilities. (s the
rate of this innoation increases, the failure rate for '( systems #ill undoubtedly
gro# as #ell.
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The follo#ing picture sho#s the results of a surey by PM to find out the factors
most li"ely to transform the Telecommunications industry. This reflects the gro#th of
mobile ban"ing and payments, #hich is creating ne#, independent reenue streams#ith accompanying billing and security issues.
(n oer#helming proportion 2E
percent3 beliee the threat of
reenue lea"age and fraud #ill go
up, and half thin" this rise #ill be
significant.
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Benei%s o Re,enue Assuran!e
'eenue (ssurance solution can benefit any Telecom industry in the follo#ing #aysG Identify opportunities for cash, reenue generation, margins and profitability
Identify, measure and preent the ris" points for 'eenue lea"age
Identify process Improement and reenue recoery opportunities
Preent billing inconsistencies before they reach the customer bill and
increase billing accuracy
'educing operational costs
Focus on customer ac:uisitions and retention propositions
Diert the 'eenue for more profitable endeaors
Improe 4ustomer xperience
C'a""en1es a!e# in !on#u!%in1 Re,enue Assuran!e
(s Telcos moe deeper into next%generation serices and content%drien serice
enironments, 'eenue (ssurance becomes both, more complex and more critical
The ma$or challenges faced in carrying out 'eenue (ssurance are mentioned
belo#G
Co-("e+ (ro!esses an# (ra!%i!es$
(s Telcos operate under a stricter regulatory regime, ne# rules are forcing them
to increase their internal control and to ensure generating 'eenue at highest
leels of efficiency. (s a result8 expansion of product portfolios, net#or"s and
serices, operations, processes and reenue chains are becoming highly
complicated #hich ma"es '( difficult for implementation.
Te!'ni!a" !o-("e+i%$
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(ccelerated gro#th in data, IP and real%time serices due to dynamically eoling
technologies, continuous demand for ne# serices, complex processes and
business systems infrastructure adds complexity in system configuration thus
hindering exposure for '(.
Da%a a,ai"a7i"i%
'eenue data is difficult to obtain% #ith too many sources of data and too many
reports. xtracting the right data #ith no integrity and :uality issues is a big
challenge to start #ith. This leads to difficulty in :uantifying 'eenue losses.
Peo("e a!%or
-eed of competent '( analysts and Sub$ect matter experts #ith right s"ills and
ade:uate "no#ledge to not only identify suspicious data but also perform :uic"
inestigation and suggest :uic" #ins is an important but difficult tas".
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C'a(%er 2
Resear!' Me%'o#o"o1
This report has been prepared
(fter detailed study and learning aboutG%
4ompany, its products and its capabilities
lobal and Indian mar"et
Top tools, applications and companies in the mar"et
Perusal of numerous research reports, articles, blogs from M>M experts and
#hitepapers from the industry.
6n the basis of discussions held #ith mentors at 4onnectM Technologies
(naly7ing the results of surey and finding out the re:uirements in the
industry
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C'a(%er 3
Ana"sis o ,arious re,enue s%rea-s
PREPAID
O,er,ie8
( prepaid mobile phone, also commonly referred to as pay%as%you%go, pay%as%you%
tal", pay and go, prepaid #ireless, is a mobile phone for #hich credit is purchased in
adance of serice use. The purchased credit is used to pay for mobile phone
sericesat the point the serice is accessed or consumed. If there is no aailable
credit then access to the re:uested serice is denied by the mobile phone net#or".
Hsers are able to top up their credit at any time using a ariety of payment
mechanisms.
Hnli"e postpaid phones #here subscribers hae to terminate their contracts, it is not
easy for an operator to "no# #hen a prepaid subscriber has left the net#or". To free
up resources on the net#or" for ne# customers, an operator #ill periodically delete
prepaid SIM cards#hich hae not been used for some time, at #hich point their
serice 2and its associated phone number3 is discontinued. The rules for #hen this
deletion happens ary from operator to operator.
Pre(ai# Bi""in1 Pro!ess
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http://en.wikipedia.org/wiki/GSM_serviceshttp://en.wikipedia.org/wiki/GSM_serviceshttp://en.wikipedia.org/wiki/Intelligent_Networkhttp://en.wikipedia.org/wiki/Intelligent_Networkhttp://en.wikipedia.org/wiki/SIM_cardhttp://en.wikipedia.org/wiki/Intelligent_Networkhttp://en.wikipedia.org/wiki/SIM_cardhttp://en.wikipedia.org/wiki/GSM_serviceshttp://en.wikipedia.org/wiki/GSM_services -
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When customer ma"es a call, prepaid s#itching gate#ay captures the calling
number and sends the account information to the real time billing system.
'eal time billing systems using the aboe information, authenticates the
identity of the user, calculates the customer account&s remaining balance using the
rating tariff table and maximum allo#able duration of the call and sends thisinformation to the prepaid gate#ay.
The gate#ay establishes the call.
During the call, gate#ay monitors the call so that the user do not exceed the
maximum allo#able call duration.
When the call is oer, the gate#ay sends the actual call duration to theprepaid billing system, #hich then calculates the actual call cost and updates the
account balance, decreasing the remaining balance.
Areas o "ea9a1e
4onentional sources of reenue lea"age typically include system integration issues
resulting from the diersity of the technological landscape for proiding serices, the
complexity inoled in integrating aried 5SSB6SS, inade:uate enforcement of
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operational policies by systems as #ell as personnel and infrastructure constraints
namely band#idth, security and facilities.
+o#eer, the more serious causes of lea"age are related to the uni:ue dynamics of
the Indian telecom landscape. With ne#er serice proiders entering the mar"et,
existing operators face the challenge of sustaining mar"et share. ( couple of years
bac", India had only six ma$or operators. Today there are oer fifteen of them #ith
more operators #aiting to enter the mar"et. Moreoer, these proiders are using
near desperate measures for grabbing subscribers and this is leading to sharp
declines in ('PH and (MPH. This has resulted in the formation of a larger cloud
oer operators than #ould hae been the case #ith simply conentional forms of
reenue lea"age.
The main area of lea"age in Prepaid are G%
&. CDR Re"a%e# Lea9a1e The lea"age due to 4D's can occur basically at t#o
leels
&.&Ne%8or9 Le,e"
Ca"" re!or#s no% (asse# ro- s8i%!'es Due to errors in s#itches, the
4D' go unaccounted or are $ust absent. The serice hence is used but there
is no trac" of it.
Ca"" re!or#s no% (ro!esse# !orre!%" 7 Me#ia%ion The 4D' are
for#arded correctly by the physical systems but at the mediation leel they are
unprocessed and hence loss of reenue
Ca"" re!or#s no% (ro!esse# !orre!%" 7 7i""in1 ss%e- Just li"e at
mediation leel, the 4D' are processed correctly by preious systems but the
physical deices at billing are faulty and don*t bill for the serice used. The
problem can be in the rating or charging systems
&.*Me#ia%ion Le,e"
In!orre!% or-a%%in1 o CDR %o or8ar# (t the mediation, the 4D' are
filtered and refined in a format that it can be understood by 5illing systems. If
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the system is not synchronised #ith the billing system re:uirements, then the
4D' become #aste for billing and are unable to be billed
:ai"ure %o i"%er re!or#s !orre!%" The 4D' need to be filtered at the
granular leel for proper rating and charging at the billing systems. If not
filtered correctly, the billing systems are unable to identify and charge the call
resulting in loss of reenue.
*. IN Re"a%e# Lea9a1e Hnli"e post%paid, at prepaid the 4D' mediation chec" !
reconciliation process is done by the intelligent net#or".
The accounting operations are executed in real time by a system #ith little manualinterention possible. In addition to 4D' related ulnerabilities, there are fe#
other areas in I- susceptible to lea"age
*.& Pro1ra--in1 errors Due to increased competition, ne# and complex
serices and plans are released in the mar"et #ithout configuring the I-
database.6ne such problem occurs #hen the I- fails to accurately decrement
the oucher database and hence si7able reenue is lost.
*.*In%erna" rau# % mployees enter inalid ouchers, or programmatically alter
oucher balances bypassing the #hole oucher management system and so
tal"time is generated #ithout eer reali7ing it.
/. :rau# Re"a%e# Lea9a1e ; Fraud represents the deliberate intention to aoid
payment. There is many #ays for fraudsters to exploit prepaid serices.
4ertain frauds especially internal frauds occur #hen fraudsters are able to exploit
data integrity issues or process loopholes.
Fe# areas of fraud in prepaid scenario are
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/.&. P'si!a" Dis%ri7u%ion % This is historically a ery high fraud area. These
frauds are related to starter "it distribution, oucher generation and
distribution.
4an arise if secret PI- are not communicated to endor in secure manner
SIM cards in #arehouse are not "ept trac" of and actiated before sale
'49s printed and profile on 9MS don*t match
/.* Sa"es an# Pro,isionin1 :rau# Ma$orly caused by endors or internal
employees. Main #ays in #hich such frauds occur are %
Promotional schemes not deactiated on a timely basis.
Fa"e sales recorded to gain sales commission
(ccounts in alid state #ith account balance greater than default balance
/./ In%erna" Su7s!ri(%ion :rau# 4ause by internal employees, people #ho
hae access to systems and net#or". Subscriber attains a prepaid connectionand an accomplice #ithin the company remoes the prepaid flag from +;'.
Subscriber uses the serice and system assumes it to be a postpaid
connection. (t the end of billing cycle, the 4D' for#arded to postpaid billing
system are re$ected and hence reenue is lost.
P"u11in1 %'e Lea9s
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Despite the increased a#areness of the importance of reenue assurance,
telecom carriers #orld#ide are facing gro#ing reenue losses, as conergence,
increased complexity and the changing nature of serices are ma"ing it difficult
to tac"le lea"s.
There is a greater need for plugging reenue lea"age so as to reduce customer
churn, to maintain billing accuracy standards and to safeguard against loss of
reenue. en today, about one%fifth of operators #orld#ide do not hae a
formali7ed reenue assurance organi7ation structure. ither internal audit groups
or other functions perform reenue assurance actiities, usually in a limited and
reactie manner.
Most telcos in India hae a reenue assurance team or competency #ithin their
IT set%up today. This team conducts regular audits to identify loopholes or points
from #here lea"age is happening. The team then #or"s proactiely #ith the
larger IT team #ithin the telco to plug these holes. (t the same time, some telcos
outsource this audit to endors #ho speciali7e in reenue assurance and offer
solutions to capture the reenue #hich #ould other#ise be lost.
With the ongoing rush to launch ne# serices, offers and bundles, 4SP teams
continue to miss processes in their operational enironments, thereby resultingin improements in one domain and failures in others. ( strong system is the
most effectie #ay to tac"le critical challenges across the reenue chain. The
"ey components of an efficient system #ould include strong #or"flo#
management, effectie case management, proactie monitoring methods,
reconciliation and data integrity chec", po#erful and simple to use T; tools,
enhanced trending capability, integrated rating engine, Kout%of%the%box* reports,
dashboards, PIs and audits. These features collectiely help in identifyingunbilled subscribers and in detecting potential reenue loss issues een prior to
the launch of a ne# serice, proactie ris" reduction, reducing unnecessary
expenditure and managing inter%carrier and partner expenses.
Ma$or assurance actiities that can be underta"en to plug and reduce the
reenue lea"ages are %
&. Re!on!i"ia%ion o MSC an# IN
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The only #ay to ensure that all customer calls are accurately accounted for the
I- is by reconciliation of the 4D's created by the MS4 against the 4D's
generated by the I-.
This can be done by modifying the process to establish a mediation feed that #ill
identify, filter and prepare all of the prepaid 4D's coming from the MS4. -oteG
many net#or" managers disable the generation of 4D's at the s#itch in order to
minimi7e 4D' traffic. +ence, it #ill be re:uired to establish a limited number of
feeds, for a limited period of time to generate sufficient input for the re:uired
reconciliation.
stablish an I- 4D' feed for a limited time period
4reate parallel databases % one to store I- 4D's and another to store MS4
4D's
4reate a set of reconciliation reports to compare the t#o sources, and identify
any discrepancies
*. IN assuran!e ; Since billing is handled by I- for prepaid serices, any error at
this point can proe to be fatal. ;ea"age can arise due to system issues or due
to frauds. Fe# steps that can be ta"en to cater to these ulnerabilities are %
Perio#i! Vou!'er Ba"an!e Re(or%s % ( snapshot of starting balances for all
customers at a specified time Ldaily, #ee"ly, or monthly plus reports on all of
the additions oucher balances, "eeping trac" of all decrements made againstthese balances. This reduces both fraud and program error.
Cus%o-er Au#i% Re(or%s% same "ind of reporting as oucher balance reports
but on an indiidual customer basis.
Tes% Ca""s using selected accounts and specific phone calls to
predetermined phone numbers, of predetermined duration. The oucher
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management database is reie#ed to ensure the appropriate accounting
occurred #ithin the system
/. P'si!a" Dis%ri7u%ion Assuran!e% Proiding assurance on the distribution and
management of ouchers is a process that is best borro#ed from the retail
industry. 'etails hae been buying and distributing small items of high alue for
many years. Some of the techni:ues employed to assure this reenue stream
includeG
In,en%or an# Dis%ri7u%ion Mana1e-en% Ss%e-s% these systems are
created to trac" ouchers across their entire lifecycle, from creation,
purchase, distribution until their ultimate actiation by the customer. This type
of inentory management can proide an incredible increase in confidence
regarding oucher management, and has resulted in the identification of many
lea"age points for customers in the past
Vou!'er Tra!9in1 an# Au#i%% many times, organi7ations need the help of an
outsider, to simply reie# their oucher management operations, and
determine if there is a problem or not. In order to accomplish this, the auditor
needs to understand ho# the entire oucher management process #or"s, and
#here the #ea"nesses and ulnerabilities in that process might be
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POSTPAID
O,er,ie8
The postpaid mobile phone is amobile phonefor #hich serice is proided by a prior
arrangement #ith amobile net#or" operator. The user in this situation is billed after
the fact according to their use of mobile serices at the end of each month. Typically,
the customer&s contract specifies a limit or Nallo#anceN of minutes, text messages
etc., and the customer #ill be billed at a flat rate for any usage e:ual to or less than
that allo#ance. (ny usage aboe that limit incurs extra charges.
Postpaid serice mobile phone typically re:uires t#o essential components in order
to ma"e the &post%usage& model iableG
< 4redit historyB4ontractual commitmentG This is the basis on #hich the serice
proider is able to trust the customer #ith paying their bill #hen its due and to
hae legal resource in case of non%payment
> Serice tenureG Most postpaid proiders re:uire customers to sign long term
2
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Pos%(ai# Re,enue C!"e
The typical Postpaid 'eenue 4ycle can be diided into three categoriesG
Sales and Proisioning
4hargeable ent eneration and Processing
4ollections and 4redit 'is" Management
Ho8 Pos%(ai# 8or9s
-et#or" elements 2li"e s#itches, SMS43 produce ra# usage called Hsage Detail
'ecords 2HD's3 or 4all Detail 'ecords 24D's3, #hich contain information re:uired
by the billing systemG
4alling number 2( number3
4alled number 2the number receiing the call3 25 number3
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When the call started 2date and time3
4all duration
4all Type 2M64, MT4, etc., M64 stands for Mobile 6riginated 4all and MT4 stands
for Mobile Terminated 4all3
The aboe ra# 4D's from net#or" elements and also from other serice proiders
are receied by the billing system and the billing system conerts these into a format
understandable by the system. The aboe formattedBconerted 4D' is then guided
to find the customerBaccount to #hich the call should be charged and then rate the
eent accordingly.
The aboe rated 4D's are then stored in the billing data store, and on the billing
cycle date, the billing process pic"s up these rated 4D's and processes these and
renders billBinoice, ta"ing into account, the payments, taxes, discounts, etc. The
customer then pays the bill and the billing system is updated #ith the payment
details.
Areas o Lea9a1e
Ne%8or9>Re"a%e# Lea9a1e
Signaling errors on s#itches
4all records not passed from s#itches
4all records not processed correctly by Mediation
4all records not processed correctly by billing system
Incorrect metering
System errors
Data corruption System capacity mismatches 2for example, oerflo#s3
Misaligned processing or logic rules
Failure to actiate or proision the customer properly
Failure to trac" customer actiity properly
Discord bet#een operations and systems
Improper registration and management of net#or" inentory
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Me#ia%ion>Re"a%e# Lea9a1e
Failure to filter records correctly
Failure to balance batches 2in O out3
Failure to clear suspense fi les Incorrect application of customer identifiers
Incorrect application of policies
Incorrect formatting of call detail records 24D'3 to for#ard
Dropped records
Duplicated records
Bi""in1>Re"a%e# Lea9a1e
4onfusion oer #ho bills #hat Hsage beyond billing stop
Incorrect call plans
Incorrect pricing tables or pricing plans
6er%discounting
5illing errors
Poor suspense management
Incorrect billing setup
4orrect amounts, #rong currency
;ate billing
5illing the #rong elements 2for example, olume rather than duration3
:rau#>Re"a%e# Lea9a1e
Internal fraud
Theft of minutes
xternal fraud
Identity fraud
Hsage fraud
5illing fraud
Co""e!%ions> an# Dunnin1>Re"a%e# Lea9a1e
Failure to trac" old accounts
Misapplication of credits
Ineffectie dunning practices
Failure to feedbac" dunning lessons to Mar"eting, Sales, and Product
Planning
4redit policy management
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Pro,isionin1 an# Cus%o-er>Ser,i!e>Re"a%e# Lea9a1e
Physical circuits not ceased #hen account terminated
6er%proisioning
Proisioning #ithout notification of billing start 6er%budget proisioning
(buse of shortcut or fast%trac" processes
Improper update of customer status
Improper update of systems based on change in customer status
P"u11in1 %'e Lea9s
'eenue assurance of postpaid billing systems can be split into three areasG
4D' Pre%cycle Processing
4ycle Processing
Post 4ycle
CDR Pre>C!"e Pro!essin1
Pre%cycle includes 4D' generation, collection, mediation and routing to the billing
system. 4D's receied by the billing system, are in a pre%processed format.
4D' Preprocessing includesG
I#en%ii!a%ion an# or-a%%in1 o %'e CDRs% includes pre%rating Lassigning
an estimated alue onto each call in order to trac" the amount o#ed by the
customer at any time
De(osi%in1 %'e CDRs in%o %'e a((ro(ria%e !!"e i"e% holds all 4D's for
customers sharing a billing cycle, until the end of the cycle #hen their bills are
generated.
Sus(ension an# Error (ro!essin1 for 4D's not ready to be placed into
cycle files.
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http://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#precyclehttp://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#cyclehttp://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#postcyclehttp://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#precyclehttp://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#cyclehttp://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#postcycle -
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Pre C!"e Assuran!e
Pre%4ycle (ssurance duplicates assurance on the mediation systemG
9alidating the integrity of 4D's accepted
9alidating the integrity of the batches of 4D's sent from mediation or other sources
4hec"ing that the formatting, suspension and erroring of records is being done
correctly
Methods used includeG
< Sample audits of specific 4D's associated #ith different customers, eents or
conditions
> 4omprehensie balance audits of complete NbatchesN of 4D's
/ 4omprehensie cycle audits of all of the 4D's for a particular bill cycle
These audits re:uire the analyst to gain access to stores of 4D's at multiple points
along the pre%cycle trail, and reconciling 4D' integrity and type counts.
C!"e Pro!essin1 ?Bi"" Genera%ion@
(t the end of a pre%scheduled cycle, the billing system accepts and sorts all 4D's
held in a cycle, and processes them through formal rating and billing processes. This
includesG
< 'ating of 4D's x 4ustomer
> (pplication of monthly fees to each bill
/ (pplication of unpaid balances and ad$ustments from earlier cycles
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Bi""in1 C!"e In%e1ri% Assuran!e
The integrity of the billing cycle run typically inoles the tracing 4D's through the
entire cycle process. This re:uires the analyst to fully understand the billing system
operations, so that audits of all the different tables in different parts of the cycle can
be performed.
Pos% C!"e Re,enue Assuran!e
Post 4ycle 'eenue (ssurance is a series of chec"s and audits run against the
results of the billing cycle run. This ensures that the billing cycle ran processed data
correctly before the bills #ere published.
This may also include Nspot auditsN of indiidual customer bills, and Nbatch auditsN of
the totals generated by the cycle.
The steps in post%cycle assurance includeG
< xtraction of a sampling of customer inoices and the manual alidation of
their integrity
> 4omprehensie Nbatch totalN runs and comparisons against historical results
and against forecast
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/ 4omprehensie audits of reenue totals against net#or" actiity to assure that
the appropriate reenue reali7ation leels are being met
:rau#s
Fraud in the telecom industry refers to as an intentional or deliberate misuse of
serices by the subscriber in order to gain an unfair adantage or to aoid
payment for the used serices. Fraud is a problem impacting reenues and costs
for a telecom operator. ro#ing concerns oer fraud in the industry can be
attributed to the follo#ing reasonsG
In!reasin1 Vo"u-es$ Telecom operators are facing rapid gro#th rates in
subscriber base and usage patterns of subscribers. This poses scalability issues
as processes and systems may not be scalable in alignment #ith business
gro#th rates.
Co-("e+i% o Ss%e-s$ In order to combat competition and proide uni:ue
serice proposition to customers, telcos across the #orld are launching
innoatie products and serices. These serices are technically more complex
and system intensie, leading to speciali7ed "no#ledge for accurate configuration
and operation of such serices.
The aboe factors can lead to significant process and system ulnerabilities thatcan be exploited, resulting in fraud related reenue lea"age. The follo#ing picture
sho#s arious areas susceptible to Frauds
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Su7s!ri(%ion :rau#
Subscription fraud inoles setting up a false identity to gain access to net#or"
serices #ith no intention to pay for serices, either by creating a fictitious identity or
by fraudulently using the identity of another party to pay for those serices. ( single
fraudster can #rea" haoc by setting up multiple accounts and thereby rac"ing up
multiple bills, or by causing an unsuspecting subscriber to be billed for the serices
used. 5oth of these scenarios routinely result in large losses and increases to
uncollected reenues. The best #ay to preent subscription fraud is to perform
thorough customer erification chec"s, such as credit references and subscriber
serices usage analysis that profiles an indiidual*s calling patterns regardless of the
phone they may be using.
These steps help establish a true profile of behaior patterns, so that indiiduals can
be uni:uely identified regardless of the credentials they supply. Subscription fraud,
#hich occurs at the time of applying for a serice, can be th#arted by confirming that
none of the applicant*s details are present in any "no#n fraudster list. Further
measures include obtaining an initial deposit and limiting usage #ith controls such as
credit limits.
Pre-iu- Ra%e Ser,i!e
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In addition, P'S frauds are often used in con$unction #ith roaming and subscription
fraud. For example, a fraudster can create a premium rate serice by setting up a
serer in a country #ith a #ea" prosecution history. 6nce the serice has been
established, the fraudster #ill use identity theft andBor subscription fraud to establish
a large number of #ireless accounts. The fraudster #ill then ship the phones outside
the operator*s country and begin dialing the P'S number #ith the ne# phones. This
scam ta"es adantage of the delay in usage reporting bet#een SM operators to
allo# large calling olumes to go undetected. It is :uite feasible for the fraudster to
generate < million in hard%dollar losses for the operator oer the span of a
#ee"end.
To preent this type of fraud, monitor usage patterns to identify unusual, often high%
usage call patterns to P'S numbers. For example, if there is a sudden increase in
traffic for a particular P'S number, especially if the traffic originates from a small
number of calling line identities, it*s #orth the time and effort to loo" a bit closer.
Perform credit and other reference chec"s on the o#ners of P'S numbers #hen
they submit an application. In addition, ris" of this class of fraud can be limited by
profiling the traffic receied by P'S numbers and raising alerts #hen usage trends
are liable to see a significant change in their behaioural pattern.
6ne solution for P'SBroamingBsubscription fraud is to ealuate the location of the
initial phone registration to the net#or" andBor the first fe# phone calls made. If the
phone is first actiated outside the home net#or" or home country, the operator
should shut it do#n, or at least route calls to the fraud department.
Roa-in1 :rau#
(busing roaming facilities to ma"e free calls is also a costly problem. 'oaming
cloning fraudA#here subscriber identity numbers are used in another mar"etAhas
been the most #idespread type of this "ind of fraud. 'oaming fraud also can
increase the incidence of P'S fraud, as described aboe.
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For example, roaming records for an operator in -orthern urope #ere routinely
receied from the isited net#or" > hours after the calls too" place. Since the fraud
department did not #or" oer the #ee"end, handsets purchased on a Thursday #ere
:uic"ly shipped to another country #here the fraudsters #ere able to get three days
of fraudulent use from the phones before any problem #as detected.
To preent this type of fraud, monitor the usage patterns of both inbound and
outbound roamersAfor example, deelop regular high%usage reports that are based
on call attempts as #ell as call olume. 'oaming fraud often exploits the increased
delay bet#een serice usage in the isited net#or" and the subse:uent deliery of
billing information to the home net#or". 'is" of this exposure can be limited by
capturing and analy7ing the near real%time deliery of this information bet#een
net#or"s.
The exchange of roaming information bet#een operators has traditionally been
associated #ith delays. Within the SM sector, an operator has up to /@ days to
exchange this information. +o#eer, much more use of information generated by the
home net#or" 2ersus relying on the isited net#or"3 can and should be usedAin
particular, SSQ signaling information and the introduction of 4(M; serices. The
SM (ssociation itself is #or"ing to adance this process #ith the introduction of
-'T'DAnear real%time roaming data exchange.
In%erna" :rau#
Internal fraud has many faces, from applying serices directly onto the s#itch #ithout
amending the billing system and suspending the generation of usage information, to
the reactiation of used prepaid oucher numbers. 6ther examples include remoing
records from billing systems, creating fictitious accountsBcustomersBemployees,
remoing call detail records 24D's3 from the billing cycle, or $ust manipulating the
accounting and credit processes. (ll these factors can mean lost or incorrect billing
records, more non%payments and general customer dissatisfaction.
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When loo"ing at specific sources of internal fraud, one must consider that different
departments hae different opportunities to perpetrate it. gG people #ithin net#or"
operations can suppress the generation of usage information on certain routes and
trun" lines. Fol"s in billing operations can modify or preent billing for certain
numbers or groups of numbers. (nd customer serice reps can steal identity and
payment information, leading to credit card scams against customers and operator.
( clear%cut example occurred #hen someone #ithin the net#or" group of a Tier !arrier re!on!i"ia%ion
Similar to the standard interconnect techni:ue. This is the most lucratie area for
lea"age identification and cost saings #ith inter%carrier traffic. This inoles a simple
audit to chec" the accuracy of the amounts claimed by other carriers. Millions of
dollars per month hae been "no#n to be uncoered and corrected by reenue
assurance actiities in this area. The best method is toG
4reate a special file, database or data #arehouse capable of handling
extremely high olumes of data Lone or more months of history.
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enerate detailed Nie#sN of target carrier traffic.
4hec" the numbers proposed by the other carrier match those from the
data store.
If not, drill do#n into the detail, and bac"trac" into the integrity of the
4D' handling flo# to confirm your findings.
Hse this proof to mediate a resole and if desired, notify regulators.
Ho8 -o7i"e roa-in1 8or9s
Figure the sho#s commercial and technical details for international mobile
roaming. The diagram focuses on the international roaming #holesale and retail
arrangements, for simplicity.
The mobile user 2Mobile Hser (3 has an international roaming serice #ith their
home operator 2+ome 6perator3 and is automatically connected to a isited net#or"
29isited 6perator (3 #hile roaming. Mobile Hser ( is automatically granted access to
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9isited 6perator (*s net#or" #hen arriing in the isited country by an exchange of a
data bet#een +ome 6perator and 9isited 6perator (, #here 9isited 6perator (
confirms Mobile Hser ( is a roaming customer #ith +ome 6perator. (s such, the
#holesale roaming agreement bet#een 9isited 6perator ( and +ome 6perator
specifies ho# this data is to be proided to the isited operator. +ome 6perator
usually has #holesale roaming agreements #ith more than one operator in the same
isited country, #hich in this case is 9isited 6perator ( and a second net#or",
9isited 6perator 5.
(s a result, Mobile Hser ( can call home using either isited operator net#or"s, both
of #hich use international transit serices to carry the call bac" to Mobile Hser (*s
home country. Mobile Hser ( pays a retail price to +ome 6perator for the roaming
serice and does not pay 9isited 6perator (. Proided Mobile Hser 5 is not also
roaming, they #ill not incur any extra charges to receie a call from, or to ma"e calls
to Mobile Hser (. 9isited 6perator ( sends transferred account procedure 2T(P3 files
to a clearing house #hich for#ards them to the +ome 6perator. T(P files are used
for billing of calls #hile roaming. +ome 6perator can then pay 9isited 6perator ( the
#holesale charges as per call olumes in the T(P file and rates in the #holesale
roaming agreement. 9isited 6perator ( pays an international carrier 2International
4arrier3 for carrying the call and handing oer the call to +ome 6perator.
International 4arrier pays +ome 6perator a termination rate for terminating the call
in the home country.
/.3 Roa-in1 ris9s an# !on%ro"s
/.3.& Par%ner (ro,isionin1
4ertain roaming call scenarios not correctly proisioned by operators
Con%ro"
%Monitor the process of performing testing for all the roaming scenarios and
ensure that the stipulated serices and tariffs are implemented on the net#or"
elements
P;M- ID not configured in billing System for roaming partner leading to T(P%
6HT files not being generated
Con%ro"
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%Perform a periodic chec" to ensure that P;M- IDs for all roaming partners
are configured
%(naly7e error buc"ets for roaming 4D's being dropped due to missing
P;M- ID
Su7s!ri7er (ro,isionin1
'oaming serices are actiated on +;' but not on 5illing System resulting in
roaming subscribers not being billed
Con%ro"
%Perform reconciliation of roaming serices actiated for subscribers at s#itch
2+;'3 s. 5illing System
Ra%in1 an# 7i""in1
Processed T(P%6HT files sent by the operator not receied by the clearing
house leading to non%billingBdelay in billing
Con%ro"
%Perform reconciliation bet#een T(P%6HT files sent to clearing house and
T(P%6HT files receied by clearing house 2as per the report from clearing
house3
Delays in sending roaming +H's to roaming partners leading to
fraudstersBsubscribers exceeding their credit limit using the net#or"
Con%ro"
%Monitor the process of ensuring that +H's are sent to roaming partners on a
timely basis
T(P%I- files receied but not billed to subscribers leading to reenue loss
Con%ro"
%Perform a reconciliation bet#een T(P%I- files receied from roaming partners
and T(P%I- files billed bac" to the subscribers 2T(P%I- files pushed through
the retail 5illing System3
Delay inBabsence of '(P file processing leading to loss of reenue
Con%ro"
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%Monitor the process of '(P file processing by generating a periodic report
#ith the date of receipt of '(P files and resolution date. Perform ageing of
pending '(P files and escalate the same
VALUE ADDED SERVICES
O,er,ie8
In the bac"drop of a rapid decline in oice tariffs, the telecom industry is cashing in
on Mobile 9alue (dded Serices to climb to the next leel of gro#th. With mobile
penetration expected to gro# up to nearly @
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Va"ue C'ain o Mo7i"e>VAS
Con%en% !o(ri1'% o8ners$
(t the first leel of the M9(S alue chain are the content copyright o#ners, #hich
deelop original copyright content. xamples include music production houses
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2Sa'eaMa, Sony3, 5olly#ood production houses 2ash 'a$ Films3, and media
houses 2Sony, Star, ee, etc.3
Cus%o-ie# !on%en% !rea%ors$
'efers to companies that generate customi7ed content for users through their o#n
portals. xamples include Mau$, 6ne EQ, and +ungama Mobile.
Con%en% (or%a"sa11re1a%ors$
These are indiidualsBorgani7ations that gather #eb content and in some cases
distribute content to suit customer needs. xamples include Indiatimes and
+ungama Mobile.
Mo7i"e o(era%ors$
They proide transport and support mechanisms for deliery of mobile content.
xamples include (irtel, 'eliance, 5S-;, MT-;, Idea 4ellular, etc
Te!'no"o1 ena7"ers$
6n the other end of the alue chain are technology enablers. These proide
technology platforms that enable access to M9(S. Players include 6nMobile, 5harti
Telesoft, Webaroo, etc.
Han#se% -anua!%urers$
Mobile handset manufacturers hae also started playing an important role, through
their interaction #ith all other sta"eholders across the alue chain. Their actiities
include embedding soft#are lin"s in their handsets, allo#ing direct access to content
portals, creating serices customi7ed to the need of certain regions, etc. ey players
in the Indian mar"et include -o"ia, Motorola, and Samsung.
Re,enue S%rea- or %'e Mo7i"e o(era%ors$
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When a subscriber tries to do#nload any content then a re:uest is sent from
the mobile station to the 5TS
From 5TS this re:uest is for#arded to 5S4
From 5S4 this re:uest ma"es its #ay to the MS4
MS4 then chec"sG
If the subscriber is a postpaid or a prepaid subscriberWhether data serices are allo#ed to the subscriber. If it is not allo#ed, then
the re:uest is denied. If the authentication chec" is successful, then this
re:uest if for#arded to the content proider*s serer.
There are t#o modes of sending this re:uest i.e. either through SMS or
through I9' 2interactie oice response3.
If it is the I9' re:uest then it is routed to the content platform by re:uesting
the subscriber to press a specific "ey and guiding them to do#nload content
of their choice.
If this re:uest is of sms type then the short code is identified by the content
proider and "ey #ord is identified by the content serer and accordingly the
releant data is searched in the content serer.
6nce the content is found then the content proider*s serer #ould :uery the
database to facilitate the content do#nload. Furthermore, content proider
database also maintains a list of all subscribers #ho hae do#nloaded the
content.
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6nce the subscriber has receied the content, an Internet Protocol Detail
'ecord2IPD'3 is generated and it contains the information #hich #ill be used
to rate and bill the subscriber for the do#nloaded content.
Bi""in1 Pro!ess$
4onsidering the Postpaid ScenarioG
For each content do#nload, an IPD' is generated by the content proider*s serer
#hich is used for rating and billing purposes. These IPD's are of > typesG
Pre%rated IPD'G These are based on the rate of information aailable in the content
proider*s serer. gG Some ring tone do#nloads #ill be priced at
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technology enabler,
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If a transaction falls, then the mobile operator often has no insight into that
failure. So, #hen customers call the contact center, customer serice
representaties typically don&t hae access to information about the
transaction.
In %'e area o Se%%"e-en%s$
6ften incorrect number of content do#nloads are considered for calculation of
reenue share leading to excessie payout to content proider
In case of ariation in the number of IPD's, the aerage of the IPD's gien
by operator and content proider is ta"en and accordingly the payment is
made. This often results in content proider declaring exaggerated figures toincrease the resulting payout.
In %'e area o IPDR !'ar1in1$
6perators often allo# data do#nload from an application #hich inoles a flat
rate for short codes and differential rate for "ey#ord typed.
This superficially indicates that all subscribers are charged at the same rate
irrespectie of the "ey#ord typed.
If the "ey#ord field is left blan" in the IPD's generated for data do#nload
from that specific application. In this case all such IPD's are charged at a
default rate of Kflat rate for short code plus minimum applicable rate for
"ey#ords*.
Re,enue Assuran!e Pra!%i!es (resen%" o""o8e#$
In %'e area o Bi""in1 ss%e-$
Perform reconciliation of data form content proider serer and operator I- to
ensure that all content that has been sent to subscriber is charged in I-.
4ompare tariffs as per mar"eting team*s tariff tables #ith tariffs configured in
the 5illing systemBSDP on a periodic basis.
4ompare list of all toll free numbers #ith the billing configuration in the SDP
and billing system to ensure accuracy of configuration.
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In %'e area o Con%en% Do8n"oa#$
'eie# Kfailed status 4D'* from SMS4 to reie# any message sent to short
code not actiated in SMS4.
Perform reconciliation of subscriber serices proisioned in s#itch #ith billing
system to identify mismatch.
In %'e area o Se%%"e-en%s$
The operators in this regard are $ust using brute force to attempt to determine
#hich customers receie credits from among those #ho call the call centre.
This #ay the operator can "eep a chec" on #hether the customers hae really
suffered from the problem communicated or is this the #or" of some
fraudsters.
In %'e area o Da%a Visi7i"i%$
ery type of mobile content transaction should hae an eent detail record
and hae that information aailable to customer care.
Ma"ing the information aailable either online or in the call centre for a
predetermined time before sending it off to the billing system #ould help to
ans#er the customer :ueries.
In %'e area o Se%%"e-en%s$
The agreement made bet#een the content proider and the operator includes
calculation of reenue share on the basis of actual reports 2#ith a certain
ariance permitted3 instead of aerage of usage reports.
6perator reconciles the usage report receied from the content proider #ith
usage report as per operator SMS4.
In %'e area o IPDR !'ar1in1$
The operator should perform IPD' analysis on a regular basis to chec" if all
the details necessary for billing are captured accurately or not.
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INTERCONNECT
O,er,ie8
Interconnect is the process of handling calls for other serice proiders. This allo#s
the customers of one serice proider to communicate #ith the customers of another
serice proider.
If t#o operators ( and 5 are not interconnect partners, then it #ould not be possible
for a customer of 6perator ( to communicate #ith a customer of operator 5.
Hsually, operators "eep their agreements #ith each other to allo# their customers to
communicate #ith each other. This gies good business opportunity to all the
operators engaged in interconnection. (ny interconnection point at #hich the parties
agree to connect their respectie -et#or"s is called NInterconnection PointN.
E+a-("es o in%er!onne!%ion in!"u#e$
T#o ad$acent, non%competing telephone net#or"s interconnect so that
subscribers on one net#or" can call those on the other.
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;ong%distance carriers obtain access to the facilities of a local serice proider
and compete against that proider in proiding long%distance serices to a
common customer base.
Traditional #ireline telephone and ne# #ireless mobile carriers interconnect
so that subscribers of the traditional phone serice can call #ireless
subscribers, and ice ersa.
-e# competitie local telephone carriers interconnect #ith the incumbent
carrier so that they can attract subscribers in the common serice territory and
enable those subscribers to call subscribers on the incumbent&s net#or".
4ustomers of the incumbent telephone carrier ma"e calls to their dial%up
Internet Serice Proider, #hich in turn is a customer of a competing local
carrier.
In%er!onne!% In,oi!in1$
This is process of the production of inoices to send to an interconnect partner
relating to incoming interconnect call detail records 24D'3.
Interconnect 5illing concerned #ith calculating the amounts to be paid to and
receied from each of the net#or" operators that our infrastructure connects in order
for the successful call origination and termination. The 4D' for interconnecting calls
"eeps the call routing information as a group of alid alues to identify the carrier and
country details.
-ote that the set of Interconnect 4D's includes the follo#ing detailsG
4D's are those billable to retail and #holesale customers. It is reenue for
the telecom proider. It is also referred as local billing.
4D's that is only billable for Interconnect proiders. gG 6utgoing calls,
6utgoing Transit calls Incoming calls, etc. The 6utgoing calls are the expense
and Incoming calls are the reenue for the Telecom Proider.
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Interconnect 5illing systems do pricing of all incoming and outgoing interconnect
4D's. Hsually, an interconnect price is determined for both incoming and outgoing
interconnect 4D's on the basis of the incoming or outgoing trun" interconnect route
that carries the call. Most commonly, a trun" ID represents a uni:ue interconnect
partner in the interconnect 5illing System.
Se%%"e-en% Pro!ess$
The Settlement Process #ill be used to settle the -et#or" 6peratorB4arrier inoled
in carrying calls from Interconnect 6#ner to 6ther -et#or" 6perator destination or
ice ersa.
The Process #ill bring the 6utgoing 2xpense to Interconnect 6#ner3 and Incoming
2'eenue to Interconnect 6#ner3 traffic for the settlement.
Settlement can be done on monthly or bi%#ee"ly basis using manual or automated
process. It depends on billing system to billing system ho# it supports partner&s
settlement.
Ne%%in1 Pro!ess$
-etting used to perform after the settlement is completed for the agreed
ProiderB4arrier. The netting is done by multiple settlement period for the multiple
serices, #hich it supports the same currency in 6perator leel.
There are t#o types of netting methodsG
A:TER$(fter for -etting of 6perator&s Interconnecting cost after subtracting
the amount bet#een operator and ProiderB4arrier
BE:ORE$5efore for -etting of 6perator&s interconnecting cost #ithout any
subtracting of the amount bet#een operator and ProiderB4arrier.
Re!on!i"ia%ion Pro!ess$
This is the process of the reconciliation of inoices coming from an interconnect
partner #hich relate to outgoing 4D's.
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ery month interconnect partners exchange their 4D's for reconciliation purpose.
It is ery common to hae discrepancies in the 4D's proided by the t#o partners.
5illing Systems proide reports facilitating reconciliation of incoming and outgoing
interconnect 4D's. These reports "eep parameters such as call type, destination,
cost band, and duration so that these 4D's can be used by both operators to match
those parameters and identify missing 4D's.
There may be a situation, #hen some 4D's are found missing at either of the
operators& side. (fter doing re:uired reconciliation if matter does not settle, then
arious negotiations happen bet#een the partners, and finally, matter is settled by
paying some nominal amount to the impacted interconnect partner.
In%er!onne!% Ca"" S!enarios$
There could be arious interconnect call scenarios depending on type of agreement
bet#een different operators. ;et me try to coer fe# most commonly usedG
6perator (&s customer ma"es national call to 6perator 5&s customer. In this
case operator ( #ill pay some amount to operator 5.
6perator (&s customer ma"es international call through 6perator 5, because
operator ( does not hae direct agreement #ith any international operator. In
this case, operator ( #ill pay some amount to operator 5 and operator 5 #ill
ta"e care of settling do#n international operator.
6perator (&s customer ma"es international call directly using an international
operator. In this case, operator ( #ill pay some amount to internationaloperator directly.
(ll the aboe calls could be oice, SMS, MMS and data, etc.
In%er!onne!%ion A1ree-en%s$
To hae a successful interconnection, the follo#ing issues should be dealt #ith in the
interconnection agreement or by rule or order from the regulatory authorityG
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Pri!es an# a#)us%-en%s$ This includes the initial leel of interconnection
charges, a definition of the currency in #hich interconnection charges are to
be paid and ho# prices #ill ad$ust oer the term of the agreement to account
for exchange rate changes and inflation.
Poin%s o in%er!onne!%ion$The physical locations, #here interconnection #ill
ta"e place and the technical standards to be employed in the interconnection
are defined.
Trans(or% an# %rai! rou%in1$Some definition must be made for ho# calls
#ill be routed and #hat #ill be transport to delier the calls.
ua"i% o ser,i!e$Vuality standards are defined, particularly for time to
proision circuits and for call bloc"ing leels and remedies are defined for
#hen those standards are not met.
Bi""in1 an# !o""e!%ion$When and ho# to collect traffic data, #hen and ho#
to exchange bills, and #hen and ho# to ma"e payment should be specified.
Re!on!i"ia%ion$( process for reconciling traffic data and for ma"ing in:uiriesto the other party and for handling claims also should be incorporated. (
procedure for resoling discrepancies is useful #hich often inoles see"ing
recourse to arbitration, the regulator, or to the courts.
Nu-7erin1 P"an$(ccess of each operator to the country&s numbering plan
and numbering resources must be defined.
Trai! Loa#$4apacity to delier and receie the traffic that flo#s bet#een the
interconnecting net#or"s should be discussed and documented.
A1ree-en%s T(es$
6perators can hae different types of agreements to exchange their traffic. Most
commonly used agreements are listed belo#G
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Bi>La%era" A1ree-en%$Hnder this agreement, each party agrees to exchange
digital communications traffic #ith the other party oer its -et#or" at the
Interconnection Points andBor in one or more direct interconnections. Payment
settlement among different partners happens on monthly or bi%monthly basis
as per the agreement. (s per this agreement, both the operators can originate
and terminate their calls in each other&s net#or".
Uni>La%era" A1ree-en%$Hnder this agreement, one party sends their traffic
to other party&s -et#or" at the Interconnection and does not ta"e traffic bac"
from other party. Payment settlement among different partners happens on
monthly or bi%monthly basis as per the agreement.
In%er!onne!% Bi""in1 Pro!ess$
In%er!onne!% Ris9s F Con%ro"s$
Area$ Interconnect (greement
Ris9$ Inaccurate forecasting of traffic resulting in under or oer proisioning of
infrastructure.
Con%ro"$ Monitor process of obtaining a detailed traffic summary to estimate traffic
re:uirement for each operatorBcountry etc. Independently, analy7e traffic re:uirement
by comparing it #ith traffic forecasting as per interconnect partners.
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Area$Interconnect Partner Proisioning
Ris9$ Incorrect configuration of trun"s leading to interconnect trun"s not being
identified as billable trun"s
Con%ro"$Periodic reie# of all trun"s configured for interconnect to erify #hether
trun"s are configured correctly and #hether billable trun"s are mar"ed as billable.
Area$ent Processing
Ris9$4D'*s generated at s#itch incorrectly not sent to mediation B Interconnect
billing resulting in 4D'*s not getting billed.
Con%ro"$Perform a through reconciliation of 4D's generated in s#itch #ith 4D's
sent to mediation and #ith 4D's receied at billing system. This reconciliation
ensures that 4D's are not incorrectly dropped or missed during the process.
Area$rror Management
Ris9$Sudden dips or rise in traffic olumes going unnoticed resulting in errors or
discrepancies not being identified timely.
Con%ro"$Perform regular trend analyses of 4D's #ith different trun" groups to
identify any sudden dip or rise. Identify trun" groups #ith no usage and inestigate
further for reasons.
Area$'eporting, 6ff%Setting and settlement
Ris9$ Inoices sent to or receied from other operators may not be accurate.
Con%ro"$ 9alidate interconnect usage reports sent to interconnect partners #ith
4D's for calls terminating in o#n net#or". 9alidate inoices receied from partner
operators and termination 4D' report #ith 4D'*s for interconnect calls originated in
o#n net#or".
Area$Dispute 'esolution
Ris9$Disputes in settlement of inoices not being raised B resoled in timely manner
leading to loss of potential reenue.
Con%ro"$Monitor the process to ensure that disagreements in interconnect 4D's
are raised to interconnect partner as dispute #ithin the time specified as per
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agreement. Perform disputes aging in order to analyses the delays in resoling
disputes and escalate in order to resole pending dispute.
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C'a(%er 4
Pos% /G S!enario
Re,enue Assuran!e (ra!%i!es (os% /G
Indian telecom operators lose crores of 'upees eery year due to reenue lea"s and
other ris" factors. This problem #ill only #orsen #ith rollout of / serices and the
conse:uent gro#th in consumption of alue added serices that #ill boost data
transfer and do#nloads to ne# heights. With the adent of / serices,
communication serice proiders are proiding a #hole ne# range of sericesincluding triple play, ideo on demand, ideo streaming, m%commerce etc. This
means that complex 6SS, flexible billing options and next generation charging
gate#ays are being deployed, #hich #ill result in greater aenues for reenue
lea"age.
The integration challenges #ith respect to technology remain #ith / and ;T as
these next generation systems need to co%exist and interoperate #ith legacy
systems. -ext generation serices come #ith their o#n set of lea"age issues related
to content settlement, adertising reenue settlement, policy enforcement and real
time rating and charging.
Most telecom operators hae migrated to / net#or"s. The data and content
serices of / net#or"s inole complex transactions that go through multiple
platforms before they are deliered to the end customer. The increase in business
model complexity calls for increased focus on / net#or" ris" areas. It is essential
for these operators to understand the reenue lea"age ris"s posed by a / net#or"
#ith the "ey reenue ris" areas being subscriber migration, proisioning, system
integration, customer billing etc. 4omplex product definitions and non%
synchroni7ation of net#or" elements #ill affect the reenue chain if there are
mista"es in configuration. For operators migrating to /, there #ill be technical
challenges and customer data should be properly aligned across systems. +ence,
setting up the right reenue assurance PIs and controls is crucial in a / net#or".
-e# serices are driing a step change in the telecommunications industry. The
serices bring ne# impacts on reenue assurance, #hich legacy reenues being
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slo#ly eroded and replaced #ith ne# data%drien serices. ( ma$ority of surey
respondents beliee that the next generation of telecommunication serices has
already started disrupting existing setups and brings ne# challenges to reenue
assurance. Serices bundling and data and content serices hae already impacted
reenue assurance by opening up ne# areas of lea"age 2e.g. reenue share,
profitability3. In addition, most respondents beliee that mobile money, cloud%based
serices and mobile app stores are expected to bring ne# reenue lea"ages and
fraud threats to telecom operators.
Telco proiders around the #orld are :uic"ly reali7ing that their future surial and
profitability depend on the ability to recogni7e and deploy ne# serice offerings as
:uic"ly as possible. (s many ne# telecommunications serices are inented, offering
these ne# products and serices becomes ital to telcos. The continued reduction in
the aerage reenue per unit 2('PH3 that telcos can potentially reali7e from oice
serices, as #ell as the continued loss of customers to other carriers, means that
telcos need the reenue that ne# offerings li"e / products can proide. The
technical issues surrounding the deliery of / serices to customers are
complicated and they often strain a company*s resources. en after those
serices hae been deployed, many telcos find that it is still ery difficult to
ensure that those / serices are being accurately billed for and collected.
-ext generation serices are changing business models rapidly causing significant
upheaal for '( actiities. '( has to adapt to these challenges by getting inoled
earlier in the product process and #idening the scope of #here '( adds alue. 4ost
reduction, cash improement as #ell as customer metrics become "ey actiities.
Re,enue "ea9a1e (oin%s in /G 7usiness -o#e"
xamination of the / business model and resulting reenue flo#s, indicates that
they the reenue assurance issues in / are far more complex than those for >
net#or"s. This is a short list of reenue lea"age points in / net#or"sG
Lo!a%ion Main Lea9a1e T(e
S#itches Data loss4D' mediation Data corruption9oice call billing 'ating errors
9oice call settlement Statement errors
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9oice roaming Data lossPre%paid calling ! roaming FraudSMS handling Data loss%mail usage billing Data lossFile transfer billing VoS errorsMicro payment billing FraudMicro payment settlement Statement errorsM%commerce settlement Statement errorsMicro payments #hile roaming FraudPush adertising inoicing Statement errors4redit card settlements Transaction repudiation4learing house charges Statement errors9(T collection ! settlement 6er payment
Problem (reas for / 5illing Part of the problem #ith assuring reenues for /billing is that there are so many areas #here lea"age and reenue loss can occur.
These problems can be categori7ed in the follo#ing areasG
5usiness model complexities
Hnit of billing challenges
Transaction trac"ing challenges
5illing calculation challenges
6erall integrity and audit challenges
Business Mo#e" Co-("e+i% Pro7"e-s$
6ne reason telcos can get into billing problems is because of the uni:ue demand of
/ serices, #hich necessitates business model different from the one used for
other Telco serices. In the oice serices #orld, there are only t#o parties inoled
in any transactionG the customer and the telco. The telco deliers serices and bills
the customer for them. That*s easy enough to understand and manage effectiely.
When #e moe into / serices, ho#eer, #e are generally forced to integrate third
parties into the mix. Most telcos do not hae the ability to delier the content serices
2#eather, ne#s, sport, gaming, etc.3 that are the bac"bone of most / offerings.
5ecause of this, the telco must deelop business models and partnerships #ith
endors that clearly defineG
The roles of the content proiders and carrier
+o# the serices #ill be deliered to end users oer the net#or"
+o# the olume and nature of the deliered serices #ill be trac"ed and reported
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+o# the serices #ill be billed 2by #hom and at #hat rate3
Who #ill be responsible for collections and credit ris"
(d$usting telco infrastructure to delier / re:uires more than simply putting serices
into the customers Khands, it also re:uires that #e build up a billing and reenue
assurance infrastructure that captures the information necessary to support the
business model itself.
Uni% o Bi""in1 C'a""en1es$
In the traditional oice #orld, billing computation is multiplying the billing rate by the
duration of the calls. The entire billing system infrastructure is based on capturing
and computing for this simple e:uation and is based on the processing of call detail
records 24D's3.
(s #e moe into the / product range, #e depart from this simple formula. /
billing inoles a #ide range of complicated calculations that are all specific to the
type of deliered product.
Some different billable amounts are based onG
-umber of messages sent or receied 2by time of day or day of #ee"3
-umber of email messages sent or receied 2by the type of message3
Internet access times 2by flat rate or by hour range3
4ontent deliery 2#eather, ne#s, sports3 2by eent3
Music or ideo 2per file or by M53
Personal ideo transmission 2per M53
;ocation based serices 2per file, per customer response, by city3
Pay by mobile 2per transaction or by percent of transaction amount3
The $ob of reenue assurance 2'(3 for / billing is made many, many times more
complicated by including all of these different calculations in the billing process.
Transa!%ion Tra!9in1 C'a""en1es$
To support the ariety of intricate calculations inoled in / actiities, the telco
billing system must identify the sources of information for each ariable and then be
sure that it is captured, for#arded and processed correctly. eeping trac" of oice
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transactions is simple because the s#itching systems in place all #or" to create
accurate 4D's. 5ut "eeping trac" of non%4D' based eents can be significantly
more difficult.
The underlying telco infrastructure is incapable of trac"ing the ma$ority of the /
products. The telco net#or" "no#s that a customer is hoo"ed up to the system, but it
doesn*t "no# #hat that customer is doing. To secure the information about /
billable actiities, telcos must build entirely ne# reenue management chains. For
each serice being deliered, the telco must "no#G
Where the information about the eent #ill be captured
+o# it #ill be stored and for#arded to the billing system
+o# it #ill be processed
+o# the integrity of this chain of eents #ill be assured
For some / serices, the billing system manager can find the information re:uired
#ithin the Intelligent -et#or" 2I-3 system. For most others, the carrier must depend
on the third party serice proider. In all cases, an entirely ne# system #ill hae to
be built to feed the needed information into the billing system.
Bi""in1 Ca"!u"a%ion C'a""en1es$
(fter all the information about / transactions is collected, the billing system #ill
usually need to be modified to perform all of the calculations re:uired. The logic
associated #ith many of these calculations #ill be complicated and full of exceptions
and special cases that ma"e accurate computation difficult.
O,era"" In%e1ri% an# Au#i% C'a""en1es$
(fter management figures out exactly ho# all of this billing should be done, it then
must chec" and double%chec" to ma"e sure that these complex ne# actiities are
#or"ing correctly.
T'e /G RA C'e!9"is% an# A((roa!'
Most telcos are only no# beginning to comprehend and struggle #ith the issues
inoled in assuring their / reenue streams. Many companies hae only recently
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begun to deploy / offerings at a large enough scale to ma"e the assurance of the
reenues an important ob$ectie.
For those carriers $ust starting out, the follo#ing, systematic chec"list approach is
helpful to appraise exactly #hat their / reenue ris" exposure actually is.
Identify each of the / products that #e are currently offering 2and plan on
offering in the near future3.
For each product, clearly define the calculations 2and the different ariations
of calculations3 that #ill be used to bill for the product.
Within the definition of each of these calculations identify different ariables.
6nce the sources of information for each ariable hae been identified, clearly
document the transaction information chain that #ill delier this information
from the source to its final place in the billing system.
9erify that each of the transaction information deliery mechanisms is #or"ing
accurately and that the billing system itself is processing that information as
intended.
5illing for / products can be more challenging to the telco than deliering the
serices themseles. Problems #ith the / business model, ho# charges are
calculated, ho# transaction information is captured and deliered to the billing
system, and ho# the billing sys% tem processes them, all represent areas of
ulnerability. These are the areas #here the reenue assurance group needs to
focus if it expects to increase the reenues and reduce the ris" of reenue loss in the
sales of / serices.
/G$ RA !'a""en1es a'ea#
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Pro#u!% !o-("e+i%ies$
'emote superision system
;ocation based serices
Bi""in1 Co-("e+i%ies$
'ating parameters definition
Hsage measurement methodologies
Varie% o #a%a reuire-en%$
Settlement #ith multiple third parties
Increased '( control points
Se!uri% issues$
Data Interception
Tro$ans, #orms and 9iruses Frauds
:rau#s$ 4opyright Infringement
Micro Payment Frauds
nhancing of business rules to coer incremental scenarios
(utomated tools to capture real time information
Ne8>e!oss%e-$
4ollaboration drien by sharing of infrastructure and serices
It can be expected that the reenue assurance challenges presented by / products
#ill continue in the future. More complex business models and less accurate trac"ing
mechanisms need to be constantly re%engineered into the telco enironment. For the
telcos that master these s"ills :uic"ly, the re#ards #ill be higher reenues and lo#er
expenses. For those that do not, the future #ill hold continued frustration and
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confusion as the number of / serices and their complexities continue to expand
across the telco mar"etplace.
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C'a(%er 5
Con!"usion
'eenue (ssurance has achieed some tremendous successes oer the years, but
it #ill hae to address some "ey challenges in order to fulfil the expectations of
management and shareholders.
Data collection and billing is still the main focus of the 'eenue (ssurance
departments. 4ompanies confronted #ith a saturated mar"et focus more on
customer retention.
'eenue (ssurance functions hence are gradually turning their attention to the end%
to%end reenue alue chain, loo"ing at the business performance and the interactionbet#een the different parts of the chain.
While this shift in focus can indeed be of added alue to the company, 'eenue
(ssurance professionals should be careful not to lose trac" of the 'eenue
(ssurance principles. The continuous monitoring of the basic 'eenue (ssurance
controls must remain a top priority, gien the rapidly changing enironment.
Fe# areas #here care needs to be ta"en are G%
Co,era1e Mo#e"s % Ma