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The Impact of Data Traffic Explosion and LTE on Revenue Assurance and Risk. Rodrigo Otávio Moreira Gonçalves - VIVO Brazil Marcos Teixeira - cVidya September 17, 2013 IBC Conference

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Agenda

Trends that Changed the Telecom Market – Challenges & Expectations from the

Revenue Assurance Department

Brazil Telecom Market Revenue Assurance at VIVO

– Past & Current Challenges and Needs – Future Challenges and Needs

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The Trends That Changed The Telecom World

The combination of Smartphones and LTE Changed the service consumption

patterns of users Changed the underlying technologies Resulted in new price plans Changed the structure of the revenue

streams within the operator Introduced significant risks in leakages

& fraud

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4G LTE World Coverage

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Data Traffic Explosion

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Challenges

Business Approach & Analytical Capabilities – How to raise the operational level to business levels? – How to improve profitability? – How to enhance the expertise in and knowledge of RA? – How do I achieve analytical capabilities as part of the RA solution and utilize existing data for

other uses? New Arenas (Mobile Money, M2M, Mobile Data, Cloud) How to limit exposure to revenue leakage & costs from lost opportunities due to the

increasing number of services and complexity of networks? Real-time Provisioning & Huge Volumes of Information – How to adapt the RA operation to handle real-time provisioning and charging? – How to handle  the  “Data  Traffic  Explosion”?

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The Need From RA Departments – To  Be  More…

Be prepared to handle threats and challenges Be ready for upcoming technologies and products

Assess risks of services & products before launch Assume more methodical approaches to prevent leakage

Achieve more using fewer resources Align  with  company’s  business  goals Include recovery as part of the RA domain

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Brazilian Telecommunication Market

Current Figures (as of end of 2012) – Market still under expansion (mainly for Mobile, Broadband, Internet and

Cable TV users) – 267M Mobile – 44M Fixed – 17M Broadband – 16M Cable TV – 94M Internet Users

– 3G partially deployed among the country, 4G just started (2013) Current Figures for Vivo (as of end of 2012)

– Leader in Mobile Market (around 28% as of 2Q2013), with 76M mobiles, USD 10B FY Net Income, ARPU BRL 22.6 and MOU 126

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Revenue Assurance At Vivo

Innovation in Managing & Expanding RA Controls – Creating a consistent system for implementing strategy – Implementing methodological approaches based on risk assessment – Ensuring that RA-controls are part of the launch cycle & planning of new services

Key Success Factors – RA Control Efficiency - actual relevance of the controls and ensured ROI during the

implementation phase. Continuous review of control rules and implementation strategies – Knowledge & Maturity - key personnel with seniority and in-depth knowledge of Revenue

Assurance – Partnerships - between RA, IT and Vendor teams for leveraging monetary results – Control Strategy - establishing a process vs. simply implementing new controls

Main Challenges

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Control Review Process

Lab Testing Feasibility (Process & controls)

Deliverable: Control Spec Owner: RA

Development Production Optimization,

Pre-implementation

Deliverable: Control Rules,

Preliminary Results Owner: RA/ IT

Automation, Execution

Deliverables:

Alarms, Cases, Reports, etc.

Owner: IT

Up to 3 Months Up to 3 Months Ready To Go!

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Control Review Process New Products / Technologies

– LTE, Quad Play, Market Aggressiveness (lower margins) – Shorter time-to-market with increased risks – New technologies with aggressive schedule for coverage – Knowledge gap within the company (IT, Engineer, RA, Fraud

Management, etc.) – New system & network elements adding much more complexity for

existing controls Thinking Ahead - Internally

– Improve the relationships between the different areas within the company

– IT, commercial, regulatory, marketing and other departments – Improving communications with top management

Continuous  Review… – Always revisiting controls/processes with focus on monetary results

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New  “Old”  Concerns…

Data Services/Products Usage – Surpassing Traditional Voice and Messaging – The biggest concerns are in RA and risk areas – Knowledge & skills in all aspects of all new data services must be quickly

improved and enhanced – Operators are relaying on vendors – For domain expertise & experience for assistance – For adding value – For reducing risk coverage gaps

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LTE Challenges

New Pricing Models – Do we measure usage correctly? – Are we applying & charging according to the appropriate policy?

Complexity Challenges (mix of 2G, 3G and 4G) – Data is stored in many different locations (such as HLR and HSS) – Non-uniform network technology coverage - devices need to select and

“jump”  between  technologies…   Rollout Challenges

– Integrity of porting data to new network elements – Understanding and collecting data from new elements

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Who Moved My Cheese?!

CSPs needs to update RA priorities according to changing business models – New Consumption Patterns – New Services – New Products – New Pricing Models – New Charging Policies

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Use Case Example – LTE Scenario

High risk is detected in MM Risk for LTE LOB Out-of-bundle in specific data package is identified

by MoneyMap Low margins are detected by the Margin Analysis

Module Service abuse and fraudulent activities are identified

by FraudView Centralized business & financial insights on LTE

service – Monetary losses (LTE) from all products – Recommendations and future plans for risk reduction – Profitability insights of LTE for different segmentations

THANK YOU! www.cvidya.com