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Category Archives: Revenue Assurance

Boost your Campaign ROI through Promotion Assurance

“Why do you love your service provider?”

At the end of the day, this is the billion-dollar question which drives the entire telecom industry. When one ponders the answers, quite a few would emerge – flawless connectivity which helps my business flourish, a well-priced model which keeps families closer than ever, providing a backbone that keeps a country productive, etc. But in most surveys (and in my personal experience), it is the attempt at focused engagement that keeps most of us linked to the same Telco. Giving me freebies on my birthday, suggesting I change my plan to one which suits my business travel (even though the rental might be lesser) or even the act of proactively passing me some benefit during a network downtime adds that human element which tends to create brand loyalty.

From the above, it is clear that successful promotional campaigns can do wonders in terms of customer retention as well as acquisition. With the plethora of analytics tools powering the marketing departments across most Telcos, differentiated, qualified, and value-driven campaigns are a reality. Of course, some have gone farther than others in this regard. But the question which I will explore in this blog is whether this practice creates risks and brings in more issues than it solves.

Now, I look at Promotions and Campaigns from a more general perspective. It’s like eating at Dominos. While Dominos makes some decent pizzas and has a large customer base, it faces the same issue as all other eateries – consumer fatigue. This is not just caused by the limited choices (assuming a market where you could only eat Dominos pizzas), but also the sheer banality of the process. In this environment, if one offers a package deal (drink + pizza + lava cake) at 50% of its list price pursuant to a customer also purchasing a premium feast pizza, the break from the monotony of the pizza ordering process itself drives a sense of “anticipatory need.” Now, this is the easiest level. Going beyond, if Dominos were to use analytics to understand and anticipate my ordering behaviour and suggests a ready cart with one click check-out, I would be delighted. Too much to ask? Well, the reality is, this is what subscribers expect from their service providers today.

The Inside-Out of Promotions

With promotions emerging as a major business strategy in today’s competitive telecom environment, targeted campaigns can help Telcos increase revenue, margin, customer retention, customer satisfaction, and overall brand stickiness. However, the differentiation comes with its own challenges, and so does the ROI. The returns from the campaign greatly depend on how the Telco addresses each one of the challenges. Globally Telcos have allocated a significant portion (around 8%) of their budget for promotions and advertisements, but the results, in terms of campaign ROI, are not as expected. The ineffectiveness of campaigns could occur due to several reasons including lack of planning, improper budget allocation, incorrect metric measurement, wrong promotion qualifiers, incorrect target list, and many more.

Let’s examine some of the challenges associated with driving successful campaigns and see how Telcos can mitigate them to gain maximum return from their campaign investments. I will broadly classify them as:

  1. Data Access and Integrity – Each stage in the promotion launch process is critically dependent on the accuracy of the facts from the previous stage. It is of paramount importance to ensure that the raw datasets are accurate, complete, and integral. Unfortunately, most marketing teams do not have access to a comprehensive data integrity engine.
  2. Promotion Complexity – Promotions can widely vary in nature (i.e. the device, vouchers, services, etc.), and most operators do not have a ready-to-use promotion risk matrix or checklist. This leaves assurance teams at a disadvantage to deal with the volume and velocity of new promotions.
  3. Time to Market – Competitor pressure in most regions leads to a very short release/launch time for new promotions. In the absence of automation, this means pre-launch testing is usually sample based, and the test results are contaminated by confirmation bias.
  4. Lack of Automation – Many of the checks required to ensure high ROI on promotions require a high level of automation as manual interventions usually introduce errors.
  5. Regulatory Hurdles: Regulators may apply a cap on certain promotional offers announced by Telcos. For example, In India, there is a 90-day cap on such offers, so the Telcos find it difficult to optimize the market spend and achieve the target within the short span of time.

So, why invest in a Promotion Assurance program?

Having the right product does not always guarantee revenue. Telcos may be losing out to competition due to lack of visibility into how efficiently promotions are rolled out. Promotion assurance programs, which build around modern analytics and intelligent automation techniques, emerge as a winning solution in this context because it helps the Telcos define the campaign KPIs and measure ROI from each on a near real-time basis, so they can take corrective measures appropriately.

Challenges inherent in the current approaches and the evolving marketing conditions pose higher risks to campaign ROIs, and more importantly, might impact the customer experience. It is the need of the hour for Telcos to implement a promotion assurance strategy that focuses on the business, system, process and customer aspects of the campaign.

Product Line Manager, Revenue Assurance – Ashwin joined Subex in 2006 as a part of the Implementation team for Revenue Assurance & Fraud Management. Over the years he has worked with cross-geographical teams to drive value discovery and creation for telecom operators across Middle East, Africa and APAC as a delivery SME and a Business Solutions Consultanct. Beyond his work in Subex, he has been involved in some of the most seminal Revenue Assurance public domain centers (both in terms of his work on popular RA blogs as well as his co-authored work on Revenue Assurance for Telecom Operators). He regularly speaks at various industry events on areas pertaining to Business Optimization.

Direct Carrier Billing : A Massive Revenue Opportunity for Telcos

In the last few years, OTT players taking away a sizable chunk of the telco revenues. To deal with this, it’s time the operators harness the potential of new streams of revenue. Direct Carrier billing is one such avenue.

Direct Carrier Billing is a telco driven payment model, for the digital services. Direct Carrier Billing (DCB) opens the possibility of generating a new revenue stream for operators, by leveraging on the existing telco network and the billing relationship with the customers. Direct Carrier Billing, enables telcos to allow its wireless subscribers (both prepaid and postpaid) to purchase goods and services using their handsets. The cost of purchased good and services are added to their monthly phone bill or deducted from the prepaid balance, thereby providing a seamless & secure payment mechanism. This medium enables a very simplified online payment experience with just a click to complete a transaction.

Why is Direct Carrier Billing beneficial for the Telcos?

Juniper Research found that operator revenues derived from carrier billed purchases will rise from USD $2.9 billion in 2017 to USD $9 billion in 2022, an average annual growth of 25%. With growing purchases via DCB, operators enabling their customers to buy all kinds of goods and services using their mobile services subscription will add a new revenue stream for the operators.

  • The operators can take a % of the revenue from the transactions, and their customers don’t have to look for a financial relationship with another company.
  • It is a win-win situation for both the operator and the merchant since it also helps the merchant extend their reach by using the operators existing customer base.
  • The higher conversion rate in DCB transactions will lead to an increase in ARPU for operators.
  • The payment method is extremely simple and secure leading to better user experience and reduction in customer churn.

Leading Technology firms like Google, Apple and Amazon are also investing in building DCB relationships with operators and vendors (like Fortumo, Bango, Boku etc.).  They strongly believe that DCB will allow the unbanked to better engage and participate in the digital economy. The increasing desire to enable payment across Smart TVs, Xbox and IoT devices emerging in the market, widens the opportunity for Direct Carrier Payment.

With most of the transactions completed via DCB, the problem is that maintaining Direct Carrier Billing functionality sometimes fails due to settlement involved between the multiple parties and the frauds in the DCB chain. Subex Direct Carrier Billing Assurance program protects the entire DCB chain providing end to end Risk and Fraud Management.

Stay tuned to know more about Subex Direct Carrier Billing Assurance.

Nirbhika has 9+ years of experience in the Telecom and the IT industry, which includes working with Infosys and Amdocs. Currently, she is working in the Business Solution & Consulting group for the Emerging Markets.

Digital Transformation: The Art of War!

Straight from the Board Room

15th Jan, 16:00 Hours: The Board Room at the Telco HQ

The silence is deafening, and the breathing heavy. Everyone is waiting with heavy anticipation. The top comes off the Mont Blanc, and the only sound is of the pen on the paper. The VP-Sales surreptitiously pulls out his iPhone, and drafts a text “Deal Done! Congrats…”. The finger is playing near the send button, with every passing second feeling like an eon.

The last dot underneath the signature is placed, and without missing a beat, the send button is pressed. The room is filled with a sense of relief, and the muted claps soon turn into backslaps and congratulations…The multi-million $ deal for Digital Transformation is now underway….

15th Jan, 22:05 Hours: The Conference Room at the Vendor HQ

1000s of miles away, the CEO phone beeps discretely. All the weary eyes turn towards the CEO. A faint smile emerges. With the “Yes” and the fist-pump, the room erupts. Years of arduous work has come to fruition. The clinking of the glasses, and the pops of champagne bottles could not drown the enthusiasm, and the spirit of the crowd.

The Chief Marketing Manager sneaks out, to work the PR lines. Minutes left before the item makes into tomorrows’ news.

16th Jan, 06:00 Hours: Leading Media Publications

“Vendor X inks a multi-million $ Digital Transformation deal with Telco Y”

Telco Y, one of the leading telecommunications services providers, has signed a multi-million $ partnership with Vendor-Y, for Digital Transformation. Digital Transformation is a strategic initiative of the Telco Y and is aimed at offering an extensive portfolio of services to its customers, enhance customer experience & engagement, and quality of services delivery.

01st Jul, 10:00 Hours: The Board Room at the Telco HQ

The silence is deafening, and the breathing heavy. Everyone is waiting with heavy anticipation. The Head of Billing is pouring through the recent twitter reactions to the Digital Transformation.

twitter-reactions

The VP-Sales surreptitiously pulls out his iPhone, and sends a text “Bad, looks very bad…”. 1000s of miles away, the exasperation sets in …

Let’s look at one of the major transformation challenges faced by telcos

Digital transformation has become the norm now, and it is nothing short of a war – the war to win over customers, to stay profitable, and survive amongst the fiercest competition. However, studies indicate that most of the migration attempts have resulted in an increase in revenue leakages and has negatively impacted the brand and customer experience.

The unfortunate reality is that a majority of telcos are currently seeing issues in their transformation process leading to negative impact aspects around revenue and non-revenue. Reasons for this vulnerability are quite straightforward – the controls that existed with a set process get disrupted, and start to diminish once the transformation begins, thus leaving the operators in a bit of a handicap.

As per the recent reports, a leading telecom operator was fined for serious breaches of consumer rule due to inconsistencies in the new billing system and incurred a financial loss of close 4.6 Million Euros. There are also reports of operators losing up to 50 million due to migration failures.

“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win”.

– Sun Tzu, the famous Chinese general, military strategist, philosopher, and the writer

Which side are you on? The Victorious warrior or the Defeated warrior? Download the datasheet to find ways of becoming proactive in your transformation, and being a victorious warrior.

Vijay has 18+ years of experience in the Telecom, Fintech and the IT industry, in various Techno-Commercial roles. Currently, Vijay Heads the Business Solution & Consulting group for the Emerging Markets. Vijay is a technology enthusiast and a prolific blogger.

Why Telcos Need Real-Time Revenue Assurance?

Revenue leakage is one of the major worries affecting telcos around the world.  The number says it all. The 2017 Global Fraud Loss Survey by CFCA says telcos lose $29.2 Billion (USD) annually, equivalent to 1.27% of global telecom revenues, to several revenue frauds. For telcos, who are also aggrieved by the declining margins from traditional voice business, safeguarding the existing revenue sources thus becomes critical. The rising concerns over revenue loss have brought the discussion around a new approach to revenue assurance (RA). While the revenue assurance solutions in the market address some of the possible threats in revenue leakage, they lag behind in delivering a faster detection and reconciliation capabilities.

Why Real-Time Revenue Assurance?

As we see today, the main drawbacks associated with traditional RA solutions is the long gap between revenue leakage detection and revenue realization. Since these systems adopt conventional methods for data consolidation and streamlining, the process requires manual intervention in parsing and auditing. Considering the enormous volume of transaction generated in today’s customer-centric world, telcos cannot ignore such lapses in remediation. Thus, the need arises for an intelligent, automated RA platform that can reduce the gap between these processes to a minimum. Legacy systems also face challenge due to the rapid surge in user data generated from millions of transactions every day. In the wake of new challenges brought by IP networks and the sophisticated interconnection frauds, detecting and remediating the anomalies becomes even more challenging.

Real-Time Revenue Assurance: How?

Real-time revenue assurance focuses on minimizing the time gap between fault detection and reconciliation. With analytics at the core, the technology enables service providers to detect the threat as soon as it occurs and start the reconciliation process within hours of data inception. Let me elaborate the process a little. The files collected at the source will be pushed to the real-time RA system within a few minutes. The data is parsed and loaded within, say 30 minutes, and the reconciliation process starts within the next two hours, enabling the early revenue reconciliation than the traditional approaches.

Analytics plays a crucial role in ensuring real-time RA.  The complex algorithm segregates the data based on a set of parameters, so anomalies can be detected quickly and accurately. Advancements in real-time RA also promise near real-time and even real-time controls on revenue leakage. The output of RA controls can deliver additional insights on each transaction, which can be used to improve sub-optimal processes.

What Business Benefits Real-Time Revenue Assurance Bring to Telcos?

Since revenue assurance is the most crucial element in a telco business, the impact brought by real-time RA is huge. As mentioned in the beginning, the loss attributed to different types of fraud is incomparable, so a reduction in leakage exposure time results in significant savings. Also, revenue assurance in a telco business is linked to multiple processes including data collection, billing, settlement and operations. Thus real-time RA allows telcos to gain increased visibility into all aspects of subscriber data, which in turn helps them to improve Quality of Service (QoS).

Subscriber management is a key aspect of revenue assurance as it helps telcos to deal with customer attrition. The operators need to have visibility into subscriber’s usage and billing patterns. Such insights will help them to launch the right mix of services that enhance customer value and improve ARPU. Subscriber management, especially in IP-based systems, proves crucial to eliminate billing errors and disputes. Real-time revenue assurance scores in this context as it provides real-time visibility into customer behavior and capture anomalous activities before it impacts the network.

Watch this column to gain more insights on revenue assurance for telcos.

Neeraj leads digital marketing for Subex with focus on Website, Search, social media, mailer automation and MIS. In addition to this role, he also looks after product marketing for Revenue Assurance & fraud Management solutions for the company. He comes with over 8 years of experience spanning across sales, product and digital marketing.

Device Journey Management: the next frontier for Device Assurance

In recent years operators have scaled their thinking into hundreds of millions – but not in terms of data volumes, but instead in the numbers of devices now utilizing their networks.  Smart handsets have led the charge of devices, followed (and soon to be surpassed) by IoT devices, and an army of small cells that will serve to densify the upcoming 5G network rollouts around the world.

Why are these devices capturing more and more operator attention?  With over 1.5 billion smart phones shipped from manufacturers in 2017, the amount of investment by telecom operators just in this device category alone amounts to approximately 20% of their overall operational budget.  However, each year tens of millions of dollars of this opex are being written off as losses by operators due to issues with logistics (forward and reverse), fraud, and process misalignments; device journey oversight doesn’t exist as a discipline today.

Subex has invested almost two years researching this domain, including talking with operators of all sizes around the world.  What we have found is an expanding set of exploitable gaps that current systems and practices are incapable of closing.  Points of risk exist across internal processes, channel partners, distribution and supply chain, and various other areas leading to (and sometimes even originating from) the end consumers.  These risk points accumulate losses for operators that range between $500K USD to over $10M USD per month, per operator, depending on size of the operator.

The device growth area today is not only in smart handsets, but also in a wide array of small cells, sensors, and various other categories.  With already significant gaps existing in oversight, this new breed of devices puts an even greater risk on operating budgets.  Under current estimates, deployed IoT devices alone in the next 5 years will exceed 200 billion units, dwarfing the handset counts worldwide.  Can losses be sustained, or even ignored, at these levels?

Subex will be speaking about a comprehensive strategy and methodology for Device Journey Management during a presentation at the CFCA Winter Conference in Las Vegas on February 6th, 2018.  We will also be at the Mobile World Congress in Barcelona later in February where we look forward to speaking with operators encountering the same problems.

Vice President – Product Management – John Brooks serves as the Vice President of Product Management in Subex. He has over 26 years of experience in Telecommunications, spanning Fixed, Mobile, Data, and Video technologies. Within the industry Mr. Brooks was a board member for the GBA, founded the TM Forum Fraud team (authoring the first International Fraud Operations and Fraud Classifications guides), and now leads the TM Forum Network Asset Management team, focusing on transformative best practices for SDN/NFV operations. Over the years Mr. Brooks has served as an Advisory Board member for a prominent technical university, and has spoken at over 50 industry events and authored numerous papers on topics spanning IoT, Digital Disruption, Big Data, and Enterprise Risk Management. With Subex (formerly Connexn/Azure) since 1999, he has directed over 40 successful Cost, Revenue, and Business Optimization engagements at over 24 top-tier carriers globally, including AT&T, America Movil, BT, Vodafone, and Verizon.

Assurance by any other name… reflections on RAG Sydney

In my role leading business solution consulting for Subex Network Analytics, I traverse a lot of time zones.  People assume I have sage advice and perhaps an elixir to cure jet lag.  Sadly, I slog through the transitions like everyone else, employing a variety of coping strategies.   I just read about an intriguing approach that some members of the US ski jumping team will use at the Winter Olympics.  They are embracing jet lag, purposefully showing up just days prior to competitions.  Why?  For them, it is best not to think too much as they soar into the abyss.  Being in a foggy state may be an asset for some, but the rest of us still need to find ways to stay on our game as we trot the globe!

Fortunately, I managed to keep my edge for the Risk and Assurance Group (RAG) conference in Sydney, after traveling 18-time zones to get there.   It was a very worthwhile event, held on the Optus campus, with a good mix of operators and vendor partners.   Anamitra Mukherjee (Optus) delivered the keynote and provided material examples of how his team is challenging the traditional boundaries of RA, branching into areas such as handset assurance and network assurance.  Members of his team, Sujith Dissanayake and Gihan Samarawickrama, provided more insights on handset assurance during their talk later in the conference.   Anamitra explained that Network Assurance enables operators to determine whether they are spending the “right dollars” on the network.  Are there opportunities for cost savings such as harvesting unused assets and redeploying them?   He went on to describe the benefits of reconciling the fixed asset register against the physical network.  Payoffs include better asset visibility, more accurate depreciation schedules and efficient tax strategies.  Calculating the profitability of cell sites is another area his team is exploring.

From Anamitra’s talk one got the sense that it is time for operators to ask: “Is there more to assurance than RA?”  The consensus at the event was a resounding “yes”.   This was a major topic of discussion.  Eric Priezkalns, one of the event organizers, expands nicely on this theme in his blog post about the event.   Jayne Hunter of Vodafone Hutchison Australia explained that her role has migrated from RA to Margin Assurance.   Darren Rinaldi of Foxtel described how his team performs “entitlement reconciliation” within the broader context of process assurance.   Geoff Ibbett from RRM Solutions chimed in with the importance of contract assurance during a panel discussion.  I could go on but you get the idea…

To the list of assurances, I joined the party and added device assurance.  Subex is observing that usage-based frauds have been in decline (although IRSF continues to be popular) and there has been a sharp uptick in device and equipment issues.  Device/equipment frauds, thefts, reverse logistics breakdowns, etc. are becoming endemic.   During my talk, I pointed out that such issues are not limited to mobile handsets.  CPEs, set top boxes and even small cells can be considered devices and all have their own risks to mitigate.  To this mix you can add vCPEs and the need to control for excess license costs.

There certainly is a new world of assurances to contemplate.  In my book, there is only one missing.  Any takers for jet lag assurance?

Director of Business Development for Network Analytics
Andy has 20+ years of experience in engineering management, business operations and IT, primarily with Tier 1 operators including Level 3, MCI and GTE. His responsibilities included leading IT development teams that built mission-critical network management, provisioning and inventory systems with thousands of users. Prior to joining Subex, Andy was a Senior Manager overseeing a Data Governance organization at a major Internet Services provider. Andy graduated from the University of Pennsylvania with degrees in Electrical Engineering and Economics (Wharton). He holds an MBA from the University of Colorado.

Subex at RAG Sydney Conference 2018

RAG Sydney Conference 2018 : G’day! The upcoming Risk and Assurance Group conference takes place next week in Sydney at the height of the Aussie Summer.  For me, it will be an excuse to trade the snowy landscape of Colorado for Bondi Beach and fun in the sun.  Only kidding—won’t be hitting the beach but am looking forward to a great opportunity to interact with industry professionals and thought leaders in the business assurance domain.

On Day 2 of the conference, there will be two-part talk on the emerging discipline of handset and device assurance.   Sujith Dissanayake and Gihan Samarawickrama from Optus will share their journey managing handsets risks, including use cases they have tackled.  I have the privilege to speak next and provide an industry perspective.  Operators have always been challenged to control costs and reduce risks related to network edge devices.  While mobile handsets are certainly top-of-mind, devices can also include customer premises equipment (e.g. routers, set top boxes, DSL modems, ONTs), small cells, connected smart devices and even virtual assets.   A comprehensive device assurance program requires controlling for revenue, fraud and complex supply chain risks.  I will cover drivers and strategies for establishing a device assurance program.

Unchecked device frauds and mismanagement cost global operators billions annually.  Our industry is just now beginning to pay proper attention.  Let us help you ride the wave (ok, a Bondi Beach inspired metaphor!) to getting your device costs under control.  If you are attending the conference, I look forward to seeing you there.

Director of Business Development for Network Analytics
Andy has 20+ years of experience in engineering management, business operations and IT, primarily with Tier 1 operators including Level 3, MCI and GTE. His responsibilities included leading IT development teams that built mission-critical network management, provisioning and inventory systems with thousands of users. Prior to joining Subex, Andy was a Senior Manager overseeing a Data Governance organization at a major Internet Services provider. Andy graduated from the University of Pennsylvania with degrees in Electrical Engineering and Economics (Wharton). He holds an MBA from the University of Colorado.

The Future Success of Telecom Lies in Revenue Assurance

As the telecommunications industry anticipates the next wave of growth triggered by digital disruption, there are a few developments that demand critical attention from telcos. These trends have had a direct impact on the way telecom services are delivered, often impacting the revenue streams of operators. Let’s look at the top trends that impacted telecom revenue and see how the telcos needs to devise a revenue assurance strategy to deal with these changes.

Revenue Assurance in OTT Era

The IP revolution that swept the telecom industry over the past decade have brought in immense opportunities for OTT players; but for telcos, it was the beginning of a cataclysm marked by cut-throat competition and revenue loss. Since then, the journey of telcos has never been easy. As OTT players took away the bigger pie, operators had to redefine their business strategies to safeguard their revenue streams. Thus, their priority shifted from traditional services to the new digital offerings that largely rely on IP networks. As the journey commenced, a series of new challenges emerged in the service delivery.

With a large bouquet of offerings encompassing voice, data and video streaming, revenue management becomes a critical concern for telcos. The complexity associated with subscriber management and invoice management has created the need for a real-time revenue assurance (RA) platform designed around analytics capabilities. The automated RA capabilities ensure that the tariffs are implemented uniformly across all subscribers and that the billing system is free from all types of errors.

Technology Integration in OSS

One of the key challenges involved in a telecom provider’s transition to a digital service provider (DSP) is to integrate the transactions from different types of networks – say 3G, 4G or IP networks – to a common operations/business support system (OSS/BSS) system. Traditional systems at most telcos were purpose-designed for circuit switched networks and their revenue assurance use cases revolved around batch processing of data. To meet the complex demands created by the new digital offerings, the OSS/BSS needs to evolve to support multiple network topologies. They need to also possess the capabilities to handle large volume of data generated from disparate channels.

The modern approach to revenue assurance allows creation and maintenance of network inventory, network fault management, and automated provisioning of services through real-time analytics. This approach goes beyond the traditional way of analyzing the basic data for billing to identify aspects that impact quality of service (QoS) and customer experience.

Telecom Fraud and Revenue Assurance

The impact of telecom frauds such as international revenue share fraud and SIMbox cloning on telcos’ revenues is huge. Global Fraud loss estimate is about $29.2 Bn annually (Source: 2017 Global Fraud Loss Survey) for instance. The risk grows multifold as the telcos move to advanced networks like LTE. Due to the high bandwidth and the advanced capabilities of the devices connected to these networks, monitoring these activities becomes a real challenge.

Real-time revenue monitoring is the only way to address the revenue loss associated with call frauds. The telco should implement a robust fraud management practice that helps them analyze both expected and historical usage pattern to proactively address revenue leakage. With real-time analytics, usage can be monitored across different types of services – voice, data and video streaming. A comprehensive fraud management strategy must also encompass other aspects of providers’ environment including the sales channels, networks and the OSS.

In a nutshell : The digital journey of telcos has just begun. Considering the future opportunities, telcos cannot slacken their pace of digital transformation. As challenges around revenue assurance grow higher in the evolving technology landscape, priority should be given to safeguard the revenue across all channels.

Neeraj leads digital marketing for Subex with focus on Website, Search, social media, mailer automation and MIS. In addition to this role, he also looks after product marketing for Revenue Assurance & fraud Management solutions for the company. He comes with over 8 years of experience spanning across sales, product and digital marketing.

Does a Digital Lifestyle offer Operators opportunities, or is the path more ominous?

It stands to reason that the Digital lifestyle of consumers will dramatically impact how operators generate revenues over the next 10-15 years. Transformations are taking place that will move activities, entertainment, commerce, healthcare, transportation, and most other aspects of our lives into Digital modalities. This has invited thousands of micro-providers of applications and networks into the mix, quickly marginalizing the value of the operator to merely an “enabling pipe.” This puts the operator into a competitive situation, ultimately impacting margins. But that’s only on the revenue side of the equation… the story could become far more complex.

For an operator, the days of 25%-40% EBIDTA are waning, if not almost gone (in many regions). Pressures on pricing remain downward, with new product offers being the primary method to sustain acceptable revenues and margins. This has opened the door for some impressive creativity by many operators, especially in developing markets. In many cases no market appears off limits, as seen by the offerings by progressive organizations like MTN in Africa: Who would have anticipated an operator would offer personal transportation services rivaling Uber?

These seemingly odd moves are, in fact, brilliant moves by operators to seek new sources of revenues as their businesses are being redefined by the digital services we are quickly becoming reliant on. The impacts on revenue models due to this change in the business are stunning: Traditional billed services like voice, and even data, are fading in importance. Revenue models are instead focusing more on casual services, pay-per-use services, marketplace services, etc. Put more simply, the “pipe” is no longer where the earning potential lies for the operator.

So now a previously non-agile, large operator business is finding itself competing with, and in many cases partnering with, literally thousands of aggressive, hungry micro-entities that provide products and services accessed by the networks. There is less reliance on monthly guaranteed revenue; the battle for revenue very often resides in millions of micro-transactions.

All of the discussion cannot focus entirely on revenues, however. Margins are also sustained by costs. Agility, therefore, must exist on the cost side of the operator business. In the old world of monthly recurring and predictable revenues, costs could be managed and allocated more confidently. Opex and Capex planning and forecasting practices were based on budgeting with a high degree of certainty. But as revenues models are changing, so must cost models. Where possible, operators will need to employ similar creativity to curbing costs, as they are with earning revenues.

How can operators, therefore, modify cost models in the business to be as aggressive and variable as the revenue models they rely upon? This is where the opportunities for SDN/NFV networks can shave significant costs, while changing operator cost models in ways that were not previously achievable.

Software-Defined Networks (SDN) and Network Function Virtualization (NFV) will allow operators to provide Network-on-Demand and Service-on-Demand models to consumers, while effectively minimizing, if not eliminating the need for human intervention. The costs associated with truck rolls, call centers, and expensive specialized network equipment will be dramatically reduced, resulting in decreased Opex and Capex burdens on the business. The savings need to expand further, however.

In current cost models, operators must deploy and maintain network services around the clock, which consumes significant and ongoing expenses. However, if a network is based on SDN/NFV architectures, the deployed services are no longer in a fixed position in the network, simply because they are now software-defined and/or virtualized. This means an intelligent network can move assets where needed, and when needed. These assets are capitalized as licensed instances; so now an operator can have a pool of 1,000 licenses for a virtual service, and deploy them only as necessary.

This type of dynamic deployment model should allow operators to negotiate dynamic cost models as well; imagine only paying for a license when you have it deployed (and it is generating revenue). While this idea may seem far-fetched, consider that now the network functions we are discussing are no longer controlled by a few network equipment and function providers; micro-entities (application developers) can now produce those functions, often at far less expensive price points.

The business transformations taking place in operators globally are forcing entirely new ways of addressing margin pressures, as the revenue and cost variables operators have historically used are no longer the same. Looking beyond margins in consumer-facing products and services, new network cost models must be explored, especially since those models were based on what is now an outdated means to earn revenues.

Vice President – Product Management – John Brooks serves as the Vice President of Product Management in Subex. He has over 26 years of experience in Telecommunications, spanning Fixed, Mobile, Data, and Video technologies. Within the industry Mr. Brooks was a board member for the GBA, founded the TM Forum Fraud team (authoring the first International Fraud Operations and Fraud Classifications guides), and now leads the TM Forum Network Asset Management team, focusing on transformative best practices for SDN/NFV operations. Over the years Mr. Brooks has served as an Advisory Board member for a prominent technical university, and has spoken at over 50 industry events and authored numerous papers on topics spanning IoT, Digital Disruption, Big Data, and Enterprise Risk Management. With Subex (formerly Connexn/Azure) since 1999, he has directed over 40 successful Cost, Revenue, and Business Optimization engagements at over 24 top-tier carriers globally, including AT&T, America Movil, BT, Vodafone, and Verizon.

Reporting “The Smart Way” in RA

“As is”
Read the news using your favorite news app on your smart phone or device? Notice how the app renders news items that are important to you or of interest to you and stacks them together with short headlines followed by a short summary thereby making sure that one wouldn’t need to feel short of time finding what really needs to be read.

Is this done in your RA department?

The below diagram illustrates how majority of the RA departments report the necessary information to all concerned departments and how the subsequent action items are publicized and owned by various departments.

Reporting2

In majority of RA functions the following gaps exist in the reporting of findings and their subsequent action points:

• Reports rarely designed with specific information that is immediately consumable by target audience
• Reports rarely designed with specific requirements to the target audience than can be easily converted to action items
• Majority of the RA operations use one reporting template for all business functions

“Smart Reporting”
The below figure illustrates the ideal modus operandi that requires to be followed in a RA reporting structure.

Reporting1

Key improvements in the model are as follows:
• Reports specifically designed to target audience. For example: Reports to CxO will address revenue & cost savings, key mitigation measures taken, not exceed a time length of 5 minutes and requiring specific actions / escalations
• All reports to address specific actions required from various business functions and will be time bound
• Organizational news feeds will be made part of RA reporting

Here the emphasis is on smart reporting, which can be quickly consumed and acted upon.

Srikanth Vasudevan

Srikanth is a Senior Consultant in Subex’s Business & Solutions Consulting vertical, focusing on Emerging Markets. He has over 9+ years of experience in consulting and advisory in the telecom industry with key focus on Revenue & Cost Assurance, Information Security, Governance Risk and Compliance. His client portfolio includes Aircel, MTNL, Tata Communications, Videocon, DST and PGi in APAC; STC, MTN, BTC in EMEA; Verizon, XO, Fairpoint and AT&T in NA.

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