When mobile telecoms services started in the mid-1980s one of the most critical systems to develop was billing. Then service providers noticed that they were leaking transactions (and money). As a result, Revenue Assurance was created to fix this leakage problem. However, this took a few years and Revenue Assurance didn’t really become mainstream until the mid-1990s. There was a delay of several years where service providers may have had wide enough margins to live with revenue leakage. Those halcyon days are well and truly over.
As we move to the next stage of telecoms development service providers are selling a range of digital services. To best compete in this new era, many service providers are upgrading their BSS (business support systems) to be all real-time, automated systems that deliver more agility than the old legacy systems. As an industry we can’t afford to forget about revenue assurance during this upgrade process. The stakes are just too high now for the old approach to investing in revenue assurance where it was effectively treated as an afterthought to the billing process.
Telecoms.com and Openet have just completed a survey of 117 service providers to get their views on assurance in their transition to digital. We asked about the forecasted 2017 revenues from digital services (e.g. entertainment, gaming, health, education, etc). Most respondents’ forecasts came in around 20% of total service revenues. This is a significant amount of revenue that’s being generated now. And this figure is only going to get bigger as data slides towards commoditization. With regards to how much is at risk, the survey showed that service providers feel that more than 5% of digital services revenues could be lost unless existing revenue assurance systems are upgraded. The math is easy to do. Digesting the numbers and the impact on the bottom line is a bit harder.
The reason why so much revenue could be leaked is that most existing revenue assurance systems were designed for voice services. In fact, the survey showed that only 25% said that their current revenue assurance systems were real-time, and 34% said that their systems collect and analyse all usage data. So it’s no real surprise, given that most revenue assurance systems are batch based that collect and analyse only a sample of the data, that the majority of service providers (77%) feel that most existing revenue assurance systems will struggle to collect all the relevant data in real-time from virtualized networks for all new services.
So what’s to be done?
In terms of moving ahead to protect digital services revenue, 91% of the service providers view real-time assurance as the most important priority. Next up was related to the individual network elements responsible for delivering data services to the end-user. 87% of the service providers surveyed believe that ensuring revenue assurance processes for all transactions to reconcile 100% of usage data from network elements is of great importance to operator revenues. So the feedback says real-time – not batch, and analyse all the data – not just samples.
But BSS changes take time and cost money (in some cases a lot of money), so we asked about the service providers’ views on the most cost effective and efficient way to upgrade revenue assurance systems. Only 16% favoured a rip and replace approach. 34% favoured an upgrade approach of the existing system and 50% viewed an adjunct approach as most appealing. This involves implementing an adjunct assurance system designed for digital services to run alongside legacy system and phasing out the old system over time.
The advent of many new digital services, new revenue streams and new business models is good for the growth of the telecoms industry. But this change also means new revenue leakage points. These need to be fixed now before a leak becomes a stream which becomes a torrent of lost revenue.
Joe Villarreal, Director – Assure Solutions, Openet
Download the Telecoms.com and Openet survey of Assurance for Digital Services.
Register for the Openet webinar on Assurance for Digital Services
