Business Intelligence for Revenue Assurance in the Communication Industry

December 15, 2010
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People working in Communication Industry (Fixed and Mobile companies, circuit switched and IP) hear questions in executive meetings, for example

• How can we be sure that every minute of usage on our network produce an appropriate minute of revenue?
• Are the fixed charges for the dedicated circuits offered billed and collected?
• Does customer billing for pay-per-view selections match with settlements to content providers?
• Are we calculating bills correctly? What errors are being found in our billing verification efforts?

People working in Communication Industry (Fixed and Mobile companies, circuit switched and IP) hear questions in executive meetings, for example

• How can we be sure that every minute of usage on our network produce an appropriate minute of revenue?
• Are the fixed charges for the dedicated circuits offered billed and collected?
• Does customer billing for pay-per-view selections match with settlements to content providers?
• Are we calculating bills correctly? What errors are being found in our billing verification efforts?

For decades, a dedicated department, with the name ‘Revenue Assurance (RA)’, is digging the answers for hundreds of such questions.

Revenue Assurance is the process of ensuring that a communication service provider is billing and collecting revenue appropriate to the sales and usage of the provider’s products and services.

Revenue assurance (RA) has been an issue for telecoms for as long as telephones have existed.

Why revenue assurance is especially important in telecom companies? It’s because of the volume of the problem. Telecom Industry on average estimate that 10-20% of total industry ratable billing events are incorrect or unbilled due to leakage in switch recording, inaccurate inter-carrier billing, lack of inventory usage monitoring and invalid invoicing. It is estimated that the industry loss at $90B annually, or 14% of gross earnings. (Source: Blahamy, Mena. Telcordia Revenue Guard Solutions Overview. June 16, 2004.)

The main sources of a revenue leakages are at different spots in a telecom company for example, these can be Network related (Call records not passed from switches, call records not corrected by Mediation, call records are not rated correctly by billing system, Interconnect errors), leakages can be Mediation related leakages (prepaid/postpaid filtering issues due to most common reason of prepaid to postpaid migration, duplicated records, dropped records for example call forwarding/incoming calls should be discarded by mediation but for some reasons it doesn’t discard those etc.), leakages can be Billing Related leakages (Incorrect call plans, over discounting, late billing etc.), Intelligence Network (IN) related leakages, GPRS setup related leakages in GGSN/SGSN/SASN, MMSC related leakages. Most of these controls contribute to the revenue leakages.

Business Intelligence (BI) is contributing to identify these leakages. A BI model can be designed to test the traffic before and after passing through the different control points in a communication.

An example of a BI RA Report is to check the traffic before and after mediation system; Traffic is copied (in data warehouse) before entering into mediation system and then it is again copied after exiting from mediation system. Main purpose of mediation is to receive the raw traffic from MSC/MMSC/GGSN/SGSN/SASN, filter it according to business rules (for example discard all records of call forwarding/incoming calls because these are not rated now a days, a customer doesn’t get bill to receive a call). Send prepaid data in IN, Postpaid data in BSCS. This process can send wrong data at wrong system. For example, if a customer has migrated from prepaid to postpaid network, it should be sent to postpaid. If mediation system doesn’t know about this migration, it will send this data to IN rather than to BSCS for billing. This is a simple example of revenue leakage. A mediation system can, by many means, do errors in this filtering, causing postpaid traffic not going for rating in billing system.

Common attributes in BI revenue assurance reporting are following

Metrics: Billed Revenue / Originating Minutes / Carried Minutes of Use / Network Recorded Mins / Billed MOU / Events / Bill Cut-off to Despatch / Adjustments / Disputes / Payments / Receivables / Credits / Errors # / Error rate / Error point / Collections / Back bill / Order / Margin / File / Invoices/ Outbound / Inbound / Roaming / Processing fees / Transaction costs / Cost per bill / Inventory

Dimensions: Geography / Product / Product Group / Interconnect Operator / Time / Gender / Accounting Period / Control Point / Check Point / Payment type / Call type (Incoming, Outgoing) / Customer type (prepaid / post-paid) / Party / Channel / Package / Network Equipment

It has been seen that Mobile CSPs continue to lose more revenue than fixed line CSPs, with incumbents, once again, losing the least revenue than other CSPs. There were also large geographic variances, with CSPs in North America, Asia Pacific and Central and Eastern Europe losing more than the global average. However, our experience with CSPs around the world has shown that many of these problems are solvable by putting the right processes and systems in place. (Source: Azure web site)