So, Where Did It Go? And Why Can’t I Find It?

I’m Talking About Your Revenue

If you guessed I was talking about my sanity, well, on most days you’d be right.  But that’s not the issue today.  Today I am pondering lost revenue.  A report issued by Juniper Research claims mobile network operators face losing nearly one-quarter of their revenues due to billing errors and fraud.  That comes out to about $300 billion in lost revenue worldwide by 2016.  Ouch.

So, if I’m a mobile service provider, I want to know if Juniper is talking about me

Sadly, the answer is likely “yes.”  The problem is that both billing errors and fraud can be hard to find because they occur in any number of vexing variations.  It’s kind of like the old “death by a thousand cuts” torture method.  While no single correction in these critical areas is going to lead to an immediate windfall, regular care and attention can dramatically reduce losses and ensure service providers get the revenue they deserve.

As a telecom billing partner, we’ve seen this issue firsthand when converting providers’ service from other billing platforms to our CostGuard B/OSS solution.  One system wasn’t able to count incoming SMS messages against free units buckets, so the carrier wasn’t getting the revenue from excess SMS usage.  This same billing system wasn’t collecting and rating Voicemail Retrieval calls for roamers on the provider’s network.  The end result was nearly a month’s worth of lost revenue annually.  From our experience, billing errors like this are more common than you might think (or hope).

So, what’s a provider to do?

Well, IDI Billing Solutions has been in the B/OSS business for more than 16 years so we do have some suggestions.  We recommend service providers be vigilant and skeptical when it comes to telecom billing.  First, the vigilant part.  Spend time conducting internal revenue assurance activities.  You’d be surprised how often this important process is an afterthought.  As for the skeptical, ask your billing partner to show you what they have built in to help you audit critical, revenue-related activities.  This is one place where the experience and maturity of your billing partner can really help.

For starters, we recommend:

1. Comparing critical data points month-over-month and investigating the deviations.
2. Continually auditing and correcting data related to your unbillable usage records.  Many times it just takes a simple correction to recoup the dollars not being collected.
3. Comparing your billing data to your switch data to make sure disconnected accounts aren’t still turned up in the switch and costing you money.
4. Periodically, verifying that accounts with a special billing status (tax exempt, finance charge exempt, etc.) are still eligible and/or have up-to-date documentation on file.
5. Spot-checking common sources of internal fraud (services activated but not charged, improper tax exempt designations, etc.)
6. Making sure your collections processes are mitigating risk, executed accurately and enforced consistently.
7. Checking that the billing system is accurately capturing charges for any new product/service launched.  Verify, verify, verify.
8. Evaluating bypass rules for usage records on a regular basis.  Products, pricing and rating schemas change all the time, double-check that your bypass rules are still appropriate.
9. Setting up your product catalog correctly to enforce the assignment of mandatory charges.  Forgetting to charge for even small fees will erode the bottom line over time.
10. Above all, knowing your business.  Document every process so you don’t suffer revenue drain along with brain drain when a critical team member leaves.

Finally, think about a third-party fraud management solution

Although most telecom billing systems have tools to recognize some elements of fraud, they are not designed to be comprehensive fraud management solutions.  In many cases, a fraud management solution will pay for itself.

Given that no mobile service provider wants to end up as a prime example on Juniper’s follow up report four years from now, it seems timely to consider how to address these critical issues sooner rather than later.  While there isn’t a single approach that will plug up all the trickles that commonly characterize revenue leakage, being proactive can make a significant difference. Think about fraud management and talk to your billing partner about the tools they provide to make sure you actually get all the revenue you’ve earned.