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Revenue Assurance in Different Sectors in Telecom
Revenue Assurance in Different Sectors in Telecom
We take this opportunity to express our sincere gratitude to the institute for giving us
an opportunity to work on a year long research program which helped us explore a
different field of technology related to telecom. We would also like to extend our
thanks to our director sir, Prof. Sunil Patil and all our Faculty Members for their
invaluable guidance, constant encouragement made this project see the light of the
day.
ANIRUDH TALWAR
BONEY MATHAI
MANISHA P. TOPPO
MEGHA SHARMA
PARAMVEER KHOSA
SAURABH THAKRAL
ABSTRACT
The art of revenue assurance is now undergoing a fundamental shift as
networks converge and metrics become more complex. . The scope of
revenue assurance strategies is widening to include more and more touch
points as telecom understand that revenue-assurance isn't as easy as it used
to be.
Our Main Areas of Concern include:
Contents
1. Title of the project
2. Executive Summary
3. Introduction of Revenue Assurance
Relevance and Justification
Need of Revenue Assurance
Benefits of Revenue Assurance
Challenges faced in Revenue Assurance
4. Research Methodology
5. Analysis of various revenue streams
Prepaid
Postpaid
Roaming
Value Added Services
Interconnect
6. Post 3G Scenario
7. Conclusion
8. References
Chapter 1
Title of the Project
Chapter 2
Executive Summary
We have also carried out a study as to what would be the effect of advent of 3G
services on Revenue Assurance. With the market being driven towards more of data
usage than voice centric, the variables involved in providing both prepaid as well as
postpaid services would deepen the need of carrying out checks and balances of
revenue modes.
Chapter 3
Introduction of Revenue Assurance
Relevance and Justification
Indian telecom operators lose crores of Rupees every year due to revenue leaks and
other risk factors. This problem has worsened with the rollout of 3G services and the
consequent growth in consumption of value added services that will boost data
transfer and downloads to new heights.
Operators continue to struggle with a variety of issues from expanding their
subscriber base in saturated markets to managing stupendous subscriber growth in
markets that are still developing. More often than not, telecommunication operators
watch helplessly as crores of Rupees of their revenue goes unaccounted. Revenue
leakage is a fact of life, given the technical and business challenges in this
complicated environment. Companies worldwide take a 1.5-2% leakage in revenue
as normal. Now, due to competitive pressures, companies are beginning to focus on
internally tightening their processes to curb revenue losses.
According to a recent survey, developing markets face higher revenue leakage than
developed markets due to rapid growth and technological change. Various revenue
assurance research reports say that the degree of exposure lies in the range of 10%
to 15% of a CSPs gross revenue, depending upon factors such as networks, type of
services, geography, and revenue assurance maturity level.
Globally, operators lose between 12-15% of their revenue every year largely
because of revenue leakage related issues. This can be broadly classified into two
categoriesinternal as well as external. The internal aspect is everything that
happens due to inefficiency within the internal domain of the telecom operator. The
external aspect is largely because of fraud-related issues or partner settlement
issues etc.
Conventional sources of revenue leakage typically include system integration issues
resulting from the diversity of the technological landscape for providing services, the
complexity involved in integrating varied BSS/OSS, inadequate enforcement of
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Convergence Process
The dream of each telecom operations manager is a world where both the network
environment and the billing environment function in a completely converged
framework. But the gradual migration towards this scenario increases pressure on
existing systems and operations to work at maximum capability and flexibility, which
ultimately generates more errors and risks.
Innovation Pressure
For telecommunications companies, the last five years have generated more radical
renovation of network infrastructures and business operating assumptions than all
the years before that combined. Each month, hundreds of new technologies, products, price plans, and marketing approaches force network and systems managers
to continuously stretch and challenge their revenue management capabilities. As the
rate of this innovation increases, the failure rate for RA systems will undoubtedly
grow as well.
The following picture shows the results of a survey by KPMG to find out the factors
most likely to transform the Telecommunications industry. This reflects the growth of
mobile banking and payments, which is creating new, independent revenue streams
with accompanying billing and security issues.
believe
the
threat
of
Identify, measure and prevent the risk points for Revenue leakage
Prevent billing inconsistencies before they reach the customer bill and
increase billing accuracy
As Telcos operate under a stricter regulatory regime, new rules are forcing them
to increase their internal control and to ensure generating Revenue at highest
levels of efficiency. As a result; expansion of product portfolios, networks and
services, operations, processes and revenue chains are becoming highly
complicated which makes RA difficult for implementation.
Technical complexity:
Data availability
Revenue data is difficult to obtain- with too many sources of data and too many
reports. Extracting the right data with no integrity and quality issues is a big
challenge to start with. This leads to difficulty in quantifying Revenue losses.
People factor
Need of competent RA analysts and Subject matter experts with right skills and
adequate knowledge to not only identify suspicious data but also perform quick
investigation and suggest quick wins is an important but difficult task.
Chapter 4
Research Methodology
This report has been prepared
After detailed study and learning about:
Perusal of numerous research reports, articles, blogs from M2M experts and
whitepapers from the industry.
On the basis of discussions held with mentors at ConnectM Technologies
Analyzing the results of survey and finding out the requirements in the
industry
Chapter 5
Analysis of various revenue streams
PREPAID
Overview
A prepaid mobile phone, also commonly referred to as pay-as-you-go, pay-as-youtalk, pay and go, prepaid wireless, is a mobile phone for which credit is purchased in
advance of service use. The purchased credit is used to pay for mobile phone
services at the point the service is accessed or consumed. If there is no available
credit then access to the requested service is denied by the mobile phone network.
Users are able to top up their credit at any time using a variety of payment
mechanisms.
Unlike postpaid phones where subscribers have to terminate their contracts, it is not
easy for an operator to know when a prepaid subscriber has left the network. To free
up resources on the network for new customers, an operator will periodically delete
prepaid SIM cards which have not been used for some time, at which point their
service (and its associated phone number) is discontinued. The rules for when this
deletion happens vary from operator to operator.
Prepaid Billing Process
When customer makes a call, prepaid switching gateway captures the calling
number and sends the account information to the real time billing system.
Real time billing systems using the above information, authenticates the
identity of the user, calculates the customer account's remaining balance using the
rating tariff table and maximum allowable duration of the call and sends this
information to the prepaid gateway.
During the call, gateway monitors the call so that the user do not exceed the
maximum allowable call duration.
When the call is over, the gateway sends the actual call duration to the
prepaid billing system, which then calculates the actual call cost and updates the
account balance, decreasing the remaining balance.
Areas of leakage
Conventional sources of revenue leakage typically include system integration issues
resulting from the diversity of the technological landscape for providing services, the
complexity involved in integrating varied BSS/OSS, inadequate enforcement of
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Call records not passed from switches Due to errors in switches, the
CDR go unaccounted or are just absent. The service hence is used but there
is no track of it.
the system is not synchronised with the billing system requirements, then the
CDR become waste for billing and are unable to be billed
2. IN Related Leakage Unlike post-paid, at prepaid the CDR mediation check &
reconciliation process is done by the intelligent network.
The accounting operations are executed in real time by a system with little manual
intervention possible. In addition to CDR related vulnerabilities, there are few
other areas in IN susceptible to leakage
2.1 Programming errors Due to increased competition, new and complex
services and plans are released in the market without configuring the IN
database.One such problem occurs when the IN fails to accurately decrement
the voucher database and hence sizable revenue is lost.
2.2 Internal fraud - Employees enter invalid vouchers, or programmatically alter
voucher balances bypassing the whole voucher management system and so
talktime is generated without ever realizing it.
3.1. Physical Distribution - This is historically a very high fraud area. These
frauds are related to starter kit distribution, voucher generation and
distribution.
Can arise if secret PIN are not communicated to vendor in secure manner
SIM cards in warehouse are not kept track of and activated before sale
Accounts in valid state with account balance greater than default balance
The only way to ensure that all customer calls are accurately accounted for the
IN is by reconciliation of the CDRs created by the MSC against the CDRs
generated by the IN.
This can be done by modifying the process to establish a mediation feed that will
identify, filter and prepare all of the prepaid CDRs coming from the MSC. Note:
many network managers disable the generation of CDRs at the switch in order to
minimize CDR traffic. Hence, it will be required to establish a limited number of
feeds, for a limited period of time to generate sufficient input for the required
reconciliation.
Create parallel databases - one to store IN CDRs and another to store MSC
CDRs
Create a set of reconciliation reports to compare the two sources, and identify
any discrepancies
Voucher Tracking and Audit- many times, organizations need the help of an
outsider, to simply review their voucher management operations, and
determine if there is a problem or not. In order to accomplish this, the auditor
needs to understand how the entire voucher management process works, and
where the weaknesses and vulnerabilities in that process might be
POSTPAID
Overview
The postpaid mobile phone is a mobile phone for which service is provided by a prior
arrangement with a mobile network operator. The user in this situation is billed after
the fact according to their use of mobile services at the end of each month. Typically,
the customer's contract specifies a limit or "allowance" of minutes, text messages
etc., and the customer will be billed at a flat rate for any usage equal to or less than
that allowance. Any usage above that limit incurs extra charges.
Postpaid service mobile phone typically requires two essential components in order
to make the 'post-usage' model viable:
1 Credit history/Contractual commitment: This is the basis on which the service
provider is able to trust the customer with paying their bill when its due and to
have legal resource in case of non-payment
2 Service tenure: Most postpaid providers require customers to sign long term
(1-3 year) contracts committing to use of the service. Failure to complete the
term would make the customer liable for early termination fees.
Call duration
Call Type (MOC, MTC, etc., MOC stands for Mobile Originated Call and MTC stands
for Mobile Terminated Call)
The above raw CDRs from network elements and also from other service providers
are received by the billing system and the billing system converts these into a format
understandable by the system. The above formatted/converted CDR is then guided
to find the customer/account to which the call should be charged and then rate the
event accordingly.
The above rated CDRs are then stored in the billing data store, and on the billing
cycle date, the billing process picks up these rated CDRs and processes these and
renders bill/invoice, taking into account, the payments, taxes, discounts, etc. The
customer then pays the bill and the billing system is updated with the payment
details.
Areas of Leakage
Network-Related Leakage
Mediation-Related Leakage
Billing-Related Leakage
Fraud-Related Leakage
Internal fraud
Theft of minutes
External fraud
Identity fraud
Usage fraud
Billing fraud
Planning
Credit policy management
Cycle Processing
Post Cycle
Depositing the CDRs into the appropriate cycle file - holds all CDRs for
customers sharing a billing cycle, until the end of the cycle when their bills are
generated.
Suspension and Error processing for CDRs not ready to be placed into
cycle files.
Assurance
Validating
the
duplicates
assurance
integrity
of
on
the
mediation
CDRs
system:
accepted
Validating the integrity of the batches of CDRs sent from mediation or other sources
Checking that the formatting, suspension and erroring of records is being done
correctly
Methods used include:
1 Sample audits of specific CDRs associated with different customers, events or
conditions
2 Comprehensive balance audits of complete "batches" of CDRs
3 Comprehensive cycle audits of all of the CDRs for a particular bill cycle
These audits require the analyst to gain access to stores of CDRs at multiple points
along the pre-cycle trail, and reconciling CDR integrity and type counts.
Cycle Processing [Bill Generation]
At the end of a pre-scheduled cycle, the billing system accepts and sorts all CDRs
held in a cycle, and processes them through formal rating and billing processes. This
includes:
1 Rating of CDRs x Customer
2 Application of monthly fees to each bill
3 Application of unpaid balances and adjustments from earlier cycles
Subscription Fraud
Subscription fraud involves setting up a false identity to gain access to network
services with no intention to pay for services, either by creating a fictitious identity or
by fraudulently using the identity of another party to pay for those services. A single
fraudster can wreak havoc by setting up multiple accounts and thereby racking up
multiple bills, or by causing an unsuspecting subscriber to be billed for the services
used. Both of these scenarios routinely result in large losses and increases to
uncollected revenues. The best way to prevent subscription fraud is to perform
thorough customer verification checks, such as credit references and subscriber
services usage analysis that profiles an individuals calling patterns regardless of the
phone they may be using.
These steps help establish a true profile of behavior patterns, so that individuals can
be uniquely identified regardless of the credentials they supply. Subscription fraud,
which occurs at the time of applying for a service, can be thwarted by confirming that
none of the applicants details are present in any known fraudster list. Further
measures include obtaining an initial deposit and limiting usage with controls such as
credit
limits.
any
intent
to
pay
the
subscriber
charges.
In addition, PRS frauds are often used in conjunction with roaming and subscription
fraud. For example, a fraudster can create a premium rate service by setting up a
server in a country with a weak prosecution history. Once the service has been
established, the fraudster will use identity theft and/or subscription fraud to establish
a large number of wireless accounts. The fraudster will then ship the phones outside
the operators country and begin dialing the PRS number with the new phones. This
scam takes advantage of the delay in usage reporting between GSM operators to
allow large calling volumes to go undetected. It is quite feasible for the fraudster to
generate $1 million in hard-dollar losses for the operator over the span of a
weekend.
To prevent this type of fraud, monitor usage patterns to identify unusual, often highusage call patterns to PRS numbers. For example, if there is a sudden increase in
traffic for a particular PRS number, especially if the traffic originates from a small
number of calling line identities, its worth the time and effort to look a bit closer.
Perform credit and other reference checks on the owners of PRS numbers when
they submit an application. In addition, risk of this class of fraud can be limited by
profiling the traffic received by PRS numbers and raising alerts when usage trends
are
liable
to
see
significant
change
in
their
behavioural
pattern.
the
incidence
of
PRS
fraud,
as
described
above.
For example, roaming records for an operator in Northern Europe were routinely
received from the visited network 24 hours after the calls took place. Since the fraud
department did not work over the weekend, handsets purchased on a Thursday were
quickly shipped to another country where the fraudsters were able to get three days
of fraudulent use from the phones before any problem was detected.
To prevent this type of fraud, monitor the usage patterns of both inbound and
outbound roamersfor example, develop regular high-usage reports that are based
on call attempts as well as call volume. Roaming fraud often exploits the increased
delay between service usage in the visited network and the subsequent delivery of
billing information to the home network. Risk of this exposure can be limited by
capturing and analyzing the near real-time delivery of this information between
networks.
The exchange of roaming information between operators has traditionally been
associated with delays. Within the GSM sector, an operator has up to 30 days to
exchange this information. However, much more use of information generated by the
home network (versus relying on the visited network) can and should be usedin
particular, SS7 signaling information and the introduction of CAMEL services. The
GSM Association itself is working to advance this process with the introduction of
NRTRDEnear
real-time
roaming
data
exchange.
Internal Fraud
Internal fraud has many faces, from applying services directly onto the switch without
amending the billing system and suspending the generation of usage information, to
the reactivation of used prepaid voucher numbers. Other examples include removing
records from billing systems, creating fictitious accounts/customers/employees,
removing call detail records (CDRs) from the billing cycle, or just manipulating the
accounting and credit processes. All these factors can mean lost or incorrect billing
records,
more
non-payments
and
general
customer
dissatisfaction.
When looking at specific sources of internal fraud, one must consider that different
departments have different opportunities to perpetrate it. Eg: people within network
operations can suppress the generation of usage information on certain routes and
trunk lines. Folks in billing operations can modify or prevent billing for certain
numbers or groups of numbers. And customer service reps can steal identity and
payment information, leading to credit card scams against customers and operator.
A clear-cut example occurred when someone within the network group of a Tier 1
wireless carrier simply changed the feature flag of certain prepaid phones to be sent
to the postpaid billing system. The postpaid billing system rightfully deleted the
records because it didnt have any accounts to apply charges to. The person then
sold unlimited usage prepaid phones and pocketed the cash. This specific instance
resulted
in
significant
loss
to
the
tune
of
almost
$2
million.
Todays revenue assurance tools are likely to detect most cases of internal fraud that
create an imbalance between usage patterns and billed revenues. Periodic audits of
all network equipment configurations and creating specific internal fraud reporting
mechanisms that include checks of employees will quickly reduce internal fraud.
Technical Fraud (Cloning, Clipping, SIM Boxing)
Technical fraud involves stealing services from other users by using sophisticated
equipment that now is readily available on the market. For example, cloning SIMs
and the International Mobile Equipment Identities (IMEIs) of handsets can cause
inaccurate billing for genuine customers, as well as elevating costs generated by
trying to resolve customer complaints.
To detect and prevent this growing form of fraud, analyze network traffic to identify
multiple calls made at the same time (collision checks) and from the same number.
Also, conduct velocity checks to easily detect calls made from geographically remote
places, usually within an unfeasibly short period of time, to identify specific handsets
that have been cloned. This fraud is preventable by using encryption methodologies
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on handsets. Enforcing PIN protection can prevent unauthorized access to the SIM.
Dealer Fraud
Many operators employ resellers to help extend their reach. Unfortunately, unsavory
resellers can sometimes directly exploit these agreements. For example, some
dealers may simply falsify sales records to claim grossly inflated sales commissions.
Other examples include reporting sold SIMs as lost, reselling expired vouchers, and
relaxing subscription requirements to increase sales and thereby obtain fraudulent
commissions. These frauds leave a trail of unpaid bills and unaccounted-for usage.
How can it be detected and prevented? Monitor subscriber behavior for connections
sold by dealers. For instance, run regular reports on the number of sold SIMS and/or
handsets that have not been activated. Also, most operators can quickly analyze
dealer performance based on simple margin calculations to take into account
revenue generated versus costs incurred, rather than solely by the number of sales
achieved. Its also a good idea to perform basic credit and other reference checks on
the owners of dealerships when they submit an application. In addition, dont forget
to regularly analyze the dealer incentive and commission agreements to identify
loopholes that should be closed in order to prevent unscrupulous dealers from
exploiting them for their very own benefits involved for their own good.
Operators can never afford to let their defenses down when it comes to telecom
fraud. Many threats, both internal and external, need to be considered, and
mechanisms must be put in place to eliminate or at least minimize those risks.
Fraudsters, like operators, can and will take advantage of the new range of nextgeneration services that are coming on to the market. With the introduction of new
services comes an ever-increasing array of methods to defraud operators. Pay
particular attention to services with higher content value, such as music downloads
and video clips, which both increase the value of individual services but also make
fraudulent activity more attractive. Technology solutions are at hand to combat fraud,
but they are only effective when operators are fully aware of all the potential threats,
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and when they integrate the necessary due diligence and related processes into their
everyday business operations.
ROAMING
Overview
The roaming business has been highly lucrative for operators for years. But, times
have changed. Today, operators are facing immense pressure on margin due to the
prolonged economic downturn, rapidly falling roaming rates and increasing
regulatory intervention, among other factors. The good news is that with the
explosive adoption of smartphones and tablets, there is increasing demand for
constant connectivity and consistent quality of service, at home and while roaming
abroad. As a result, roaming traffic is expected to grow rapidly in the coming years.
The question is, will operator profits grow as well? On the network side of the house,
the signaling network is the nervous system of an operators international and
roaming business. If signaling fails, the operators entire international and roaming
operations come to a stunning halt. So, quite naturally, operators have focused on
reliability and quality of the signaling network. However, security and signaling data
of the network have never been thought of as major profit drivers for roaming
business.
wholesale roaming agreement between a mobile users home operator and the
visited mobile operator network. The roaming agreement addresses the technical
and commercial components required to enable the service. International mobile
roaming is one of a wider range of communications services offered to mobile users
while travelling abroad. Other services include hotel services, Wi-Fi, national global
SIMs cards, multiple SIM card mobile handsets, and local pre-paid SIMs cards.
Exchange of Roaming Data Records
If a service provider does not have a network coverage in a particular city or country
then this service provider makes a roaming agreement with another service provider
having network in that city or country. As per this agreement, another service
provider provides all the available services to the roaming customer of first service
provider.
The Home Public Mobile Network is the network from the operator by which a mobile
subscriber has a subscription. The term is used as opposed to Visited Public Mobile
Network (VPMN).
The Visited Public Mobile Network is the network used by a mobile subscriber while
roaming. The term is used as opposed to Home Public Mobile Network (HPMN).
Clearinghouse
There are well known bodies who interface between different roaming partners to
help them to exchange their CDRs, setting up roaming agreements and resolving
any dispute.
Clearinghouses receive billing records from one roaming partner for the inbound
roamers and submit billing records to another roaming partner for which this roamer
would be called out-bound roamer.
What is TAP3?
Transferred Account Procedure version 3 (TAP3) is the process that allows a visited
network operator (VPMN) to send billing records of roaming subscribers to their
respective home network operator (HPMN). TAP3 is the latest version of the
standard and will enable billing for a host of new services that networks intend to
offer their customers.
Clearinghouse uses TAP3 protocol to exchange all the CDRs between different
roaming partners. TAP3 defines how and what information on roamed usage must be
passed between Network Operators. These files are exchanged using simple FTP
connection.
Roaming Billing
Mobile subscriber travels to another country and creates usage on the foreign
network. In order to bill the subscriber this information has to be passed back to the
subscribers home network. The foreign network will collect information on the usage
from it is switches etc. and then create TAP files containing the information set out in
the standard.
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The files are then EXPORTED (on a regular basis generally at least one file per day)
to the home operator who will IMPORT them and then use the information to invoice
the subscriber. The foreign operator will rate the calls and then charge the
subscribers home network for all the calls within a file. The home operator can
markup or re-rate the calls in order to make revenue.
the
interconnection
or
roaming
traffic
processing
system
is
Verify the Integrity of the Inter-carrier Billing System - review of the integrity of
the inter-carrier billing system [TAP file processing system]. Validate that the
numbers created by the system accurately reflect the numbers from the CDRs
received. The method used depends upon which of the many different brands
of interconnection or TAP file handling system is used, and the nature of the
traffic being traced. Generally, inter-carrier billing systems optionally perform
all or some the following functions:
Summarize of the calls and duration of calls for each carrier
Check the numbers proposed by the other carrier match those from the
data store.
If not, drill down into the detail, and backtrack into the integrity of the
CDR handling flow to confirm your findings.
Figure 1.2 the shows commercial and technical details for international mobile
roaming. The diagram focuses on the international roaming wholesale and retail
arrangements, for simplicity.
The mobile user (Mobile User A) has an international roaming service with their
home operator (Home Operator) and is automatically connected to a visited network
(Visited Operator A) while roaming. Mobile User A is automatically granted access to
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PLMN ID not configured in billing System for roaming partner leading to TAPOUT files not being generated
Control
-Perform a periodic check to ensure that PLMN IDs for all roaming partners
are configured
-Analyze error buckets for roaming CDRs being dropped due to missing
PLMN ID
Subscriber provisioning
Roaming services are activated on HLR but not on Billing System resulting in
roaming subscribers not being billed
Control
-Perform reconciliation of roaming services activated for subscribers at switch
(HLR) vs. Billing System
Processed TAP-OUT files sent by the operator not received by the clearing
house leading to non-billing/delay in billing
Control
-Perform reconciliation between TAP-OUT files sent to clearing house and
TAP-OUT files received by clearing house (as per the report from clearing
house)
TAP-IN files received but not billed to subscribers leading to revenue loss
Control
-Perform a reconciliation between TAP-IN files received from roaming partners
and TAP-IN files billed back to the subscribers (TAP-IN files pushed through
the retail Billing System)
(SaReGaMa, Sony), Bollywood production houses (Yash Raj Films), and media
houses (Sony, Star, Zee, etc.)
Customized content creators:
Refers to companies that generate customized content for users through their own
portals. Examples include Mauj, One 97, and Hungama Mobile.
Content portals/aggregators:
These are individuals/organizations that gather web content and in some cases
distribute content to suit customer needs. Examples include Indiatimes and
Hungama Mobile.
Mobile operators:
They provide transport and support mechanisms for delivery of mobile content.
Examples include Airtel, Reliance, BSNL, MTNL, Idea Cellular, etc
Technology enablers:
On the other end of the value chain are technology enablers. These provide
technology platforms that enable access to MVAS. Players include OnMobile, Bharti
Telesoft, Webaroo, etc.
Handset manufacturers:
Mobile handset manufacturers have also started playing an important role, through
their interaction with all other stakeholders across the value chain. Their activities
include embedding software links in their handsets, allowing direct access to content
portals, creating services customized to the need of certain regions, etc. Key players
in the Indian market include Nokia, Motorola, and Samsung.
When a subscriber tries to download any content then a request is sent from
the mobile station to the BTS
There are two modes of sending this request i.e. either through SMS or
through IVR (interactive voice response).
If this request is of sms type then the short code is identified by the content
provider and key word is identified by the content server and accordingly the
relevant data is searched in the content server.
Once the content is found then the content providers server would query the
database to facilitate the content download. Furthermore, content provider
database also maintains a list of all subscribers who have downloaded the
content.
Once the subscriber has received the content, an Internet Protocol Detail
Record(IPDR) is generated and it contains the information which will be used
to rate and bill the subscriber for the downloaded content.
Billing Process:
Considering the Postpaid Scenario:
For each content download, an IPDR is generated by the content providers server
which is used for rating and billing purposes. These IPDRs are of 2 types:
Pre-rated IPDR: These are based on the rate of information available in the content
providers server. Eg: Some ring tone downloads will be priced at 10 USD in the VAS
server. SO an IPDR generated for this ring tone download will be pre-rated at 10
USD. IN this case the system will not rate the IPDR again. It uses the same prerated amount to charge the subscriber for the download.
Non-Pre-rated IPDR: These IPDRs do not contain any form of rating details. These
only contain the usage charges and therefore in this case the rating is done later
once the rating details are received from the content server.
Considering the Prepaid Scenario:
When a prepaid subscriber downloads content, the required amount is depleted from
the subscribers balance by the IN platform on a real time basis. This is possible only
when the rates for the short codes are standard or the content providers server is
able to read the keyword and then the charge is determined. This enables triggering
a debit transaction from the content platform to the subscriber account in IN prior to
content download.
Revenue Sharing with the content provider:
A revenue sharing agreement involves various stakeholders formalizes to enable
operators to deliver various categories of content to the subscribers. Therefore, for
provisioning of third party content services to its subscribers, telecom operators need
to enter into an agreement with one or more content providers.
In the Indian telecom scenario, operators retain the biggest chunk of revenues.
Revenue sharing agreement is typically, 60-65% for the operator, 15-20% for the
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technology enabler, 15% for the content developer. The fee for the copyright owner
might come from the share of operator, aggregator or both.
Possible Areas of Leakages:
VAS set up poses a double edged sword as risks in this revenue stream not only
leads to leakages but also involves potential for excess payments to content
providers.
In the area of Billing system:
Data services not barred in switch for subscribers who have been barred in
billing system.
Providers also often have loose processes for issuing a credit. Their goal is to
keep customer satisfaction high, especially when their systems may not fully
support their business model for the service.
If a transaction falls, then the mobile operator often has no insight into that
failure. So, when customers call the contact center, customer service
representatives typically don't have access to information about the
transaction.
In case of variation in the number of IPDRs, the average of the IPDRs given
by operator and content provider is taken and accordingly the payment is
made. This often results in content provider declaring exaggerated figures to
increase the resulting payout.
Operators often allow data download from an application which involves a flat
rate for short codes and differential rate for keyword typed.
This superficially indicates that all subscribers are charged at the same rate
irrespective of the keyword typed.
If the keyword field is left blank in the IPDRs generated for data download
from that specific application. In this case all such IPDRs are charged at a
default rate of flat rate for short code plus minimum applicable rate for
keywords.
Compare tariffs as per marketing teams tariff tables with tariffs configured in
the Billing system/SDP on a periodic basis.
Compare list of all toll free numbers with the billing configuration in the SDP
and billing system to ensure accuracy of configuration.
Review failed status CDR from SMSC to review any message sent to short
code not activated in SMSC.
The operators in this regard are just using brute force to attempt to determine
which customers receive credits from among those who call the call centre.
This way the operator can keep a check on whether the customers have really
suffered from the problem communicated or is this the work of some
fraudsters.
Every type of mobile content transaction should have an event detail record
and have that information available to customer care.
Making the information available either online or in the call centre for a
predetermined time before sending it off to the billing system would help to
answer the customer queries.
The agreement made between the content provider and the operator includes
calculation of revenue share on the basis of actual reports (with a certain
variance permitted) instead of average of usage reports.
Operator reconciles the usage report received from the content provider with
usage report as per operator SMSC.
The operator should perform IPDR analysis on a regular basis to check if all
the details necessary for billing are captured accurately or not.
INTERCONNECT
Overview
Interconnect is the process of handling calls for other service providers. This allows
the customers of one service provider to communicate with the customers of another
service provider.
If two operators A and B are not interconnect partners, then it would not be possible
for a customer of Operator A to communicate with a customer of operator B.
Usually, operators keep their agreements with each other to allow their customers to
communicate with each other. This gives good business opportunity to all the
operators engaged in interconnection. Any interconnection point at which the parties
agree to connect their respective Networks is called "Interconnection Point".
Examples of interconnection include:
Interconnect Invoicing:
This is process of the production of invoices to send to an interconnect partner
relating to incoming interconnect call detail records (CDR).
Interconnect Billing concerned with calculating the amounts to be paid to and
received from each of the network operators that our infrastructure connects in order
for the successful call origination and termination. The CDR for interconnecting calls
keeps the call routing information as a group of valid values to identify the carrier and
country details.
Note that the set of Interconnect CDRs includes the following details:
CDRs are those billable to retail and wholesale customers. It is revenue for
the telecom provider. It is also referred as local billing.
CDRs that is only billable for Interconnect providers. Eg: Outgoing calls,
Outgoing Transit calls Incoming calls, etc. The Outgoing calls are the expense
and Incoming calls are the revenue for the Telecom Provider.
Reconciliation Process:
This is the process of the reconciliation of invoices coming from an interconnect
partner which relate to outgoing CDRs.
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Every month interconnect partners exchange their CDRs for reconciliation purpose.
It is very common to have discrepancies in the CDRs provided by the two partners.
Billing Systems provide reports facilitating reconciliation of incoming and outgoing
interconnect CDRs. These reports keep parameters such as call type, destination,
cost band, and duration so that these CDRs can be used by both operators to match
those parameters and identify missing CDRs.
There may be a situation, when some CDRs are found missing at either of the
operators' side. After doing required reconciliation if matter does not settle, then
various negotiations happen between the partners, and finally, matter is settled by
paying some nominal amount to the impacted interconnect partner.
Interconnect Call Scenarios:
There could be various interconnect call scenarios depending on type of agreement
between different operators. Let me try to cover few most commonly used:
Operator A's customer makes national call to Operator B's customer. In this
case operator A will pay some amount to operator B.
All the above calls could be voice, SMS, MMS and data, etc.
Interconnection Agreements:
To have a successful interconnection, the following issues should be dealt with in the
interconnection agreement or by rule or order from the regulatory authority:
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Transport and traffic routing: Some definition must be made for how calls
will be routed and what will be transport to deliver the calls.
Billing and collection: When and how to collect traffic data, when and how
to exchange bills, and when and how to make payment should be specified.
Reconciliation: A process for reconciling traffic data and for making inquiries
to the other party and for handling claims also should be incorporated. A
procedure for resolving discrepancies is useful which often involves seeking
recourse to arbitration, the regulator, or to the courts.
Traffic Load: Capacity to deliver and receive the traffic that flows between the
interconnecting networks should be discussed and documented.
Agreements Types:
Operators can have different types of agreements to exchange their traffic. Most
commonly used agreements are listed below:
Uni-Lateral Agreement: Under this agreement, one party sends their traffic
to other party's Network at the Interconnection and does not take traffic back
from other party. Payment settlement among different partners happens on
monthly or bi-monthly basis as per the agreement.
Chapter 6
Post 3G Scenario
customer
billing
etc.
Complex
product
definitions
and
non-
synchronization of network elements will affect the revenue chain if there are
mistakes in configuration. For operators migrating to 3G, there will be technical
challenges and customer data should be properly aligned across systems. Hence,
setting up the right revenue assurance KPIs and controls is crucial in a 3G network.
New services are driving a step change in the telecommunications industry. The
services bring new impacts on revenue assurance, which legacy revenues being
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slowly eroded and replaced with new data-driven services. A majority of survey
respondents believe that the next generation of telecommunication services has
already started disrupting existing setups and brings new challenges to revenue
assurance. Services bundling and data and content services have already impacted
revenue assurance by opening up new areas of leakage (e.g. revenue share,
profitability). In addition, most respondents believe that mobile money, cloud-based
services and mobile app stores are expected to bring new revenue leakages and
fraud threats to telecom operators.
Telco providers around the world are quickly realizing that their future survival and
profitability depend on the ability to recognize and deploy new service offerings as
quickly as possible. As many new telecommunications services are invented, offering
these new products and services becomes vital to telcos. The continued reduction in
the average revenue per unit (ARPU) that telcos can potentially realize from voice
services, as well as the continued loss of customers to other carriers, means that
telcos need the revenue that new offerings like 3G products can provide. The
technical issues surrounding the delivery of 3G services to customers are
complicated and they often strain a companys resources. Even after those
services have been deployed, many telcos find that it is still very difficult to
ensure that those 3G services are being accurately billed for and collected.
Next generation services are changing business models rapidly causing significant
upheaval for RA activities. RA has to adapt to these challenges by getting involved
earlier in the product process and widening the scope of where RA adds value. Cost
reduction, cash improvement as well as customer metrics become key activities.
Voice roaming
Pre-paid calling & roaming
SMS handling
E-mail usage billing
File transfer billing
Micro payment billing
Micro payment settlement
M-commerce settlement
Micro payments while roaming
Push advertising invoicing
Credit card settlements
Clearing house charges
VAT collection & settlement
Data loss
Fraud
Data loss
Data loss
QoS errors
Fraud
Statement errors
Statement errors
Fraud
Statement errors
Transaction repudiation
Statement errors
Over payment
Problem Areas for 3G Billing Part of the problem with assuring revenues for 3G
billing is that there are so many areas where leakage and revenue loss can occur.
These problems can be categorized in the following areas:
Business model complexities
Unit of billing challenges
Transaction tracking challenges
Billing calculation challenges
Overall integrity and audit challenges
How the services will be billed (by whom and at what rate)
Who will be responsible for collections and credit risk
Adjusting telco infrastructure to deliver 3G requires more than simply putting services
into the customers hands, it also requires that we build up a billing and revenue
assurance infrastructure that captures the information necessary to support the
business model itself.
transactions is simple because the switching systems in place all work to create
accurate CDRs. But keeping track of non-CDR based events can be significantly
more difficult.
The underlying telco infrastructure is incapable of tracking the majority of the 3G
products. The telco network knows that a customer is hooked up to the system, but it
doesnt know what that customer is doing. To secure the information about 3 G
billable activities, telcos must build entirely new revenue management chains. For
each service being delivered, the telco must know:
Where the information about the event will be captured
How it will be stored and forwarded to the billing system
How it will be processed
How the integrity of this chain of events will be assured
For some 3G services, the billing system manager can find the information required
within the Intelligent Network (IN) system. For most others, the carrier must depend
on the third party service provider. In all cases, an entirely new system will have to
be built to feed the needed information into the billing system.
begun to deploy 3G offerings at a large enough scale to make the assurance of the
revenues an important objective.
For those carriers just starting out, the following, systematic checklist approach is
helpful to appraise exactly what their 3G revenue risk exposure actually is.
Identify each of the 3G products that we are currently offering (and plan on
offering in the near future).
For each product, clearly define the calculations (and the different variations
of calculations) that will be used to bill for the product.
Within the definition of each of these calculations identify different variables.
Once the sources of information for each variable have been identified, clearly
document the transaction information chain that will deliver this information
from the source to its final place in the billing system.
Verify that each of the transaction information delivery mechanisms is working
accurately and that the billing system itself is processing that information as
intended.
Billing for 3G products can be more challenging to the telco than delivering the
services themselves. Problems with the 3G business model, how charges are
calculated, how transaction information is captured and delivered to the billing
system, and how the billing sys- tem processes them, all represent areas of
vulnerability. These are the areas where the revenue assurance group needs to
focus if it expects to increase the revenues and reduce the risk of revenue loss in the
sales of 3G services.
Product complexities:
Remote supervision system
Location based services
Billing Complexities:
Rating parameters definition
Usage measurement methodologies
Security issues:
Data Interception
Trojans, worms and Viruses Frauds
Frauds:
Copyright Infringement
Micro Payment Frauds
Enhancing of business rules to cover incremental scenarios
Automated tools to capture real time information
New-ecosystem:
Collaboration driven by sharing of infrastructure and services
Chapter 7
Conclusion
Revenue Assurance has achieved some tremendous successes over the years, but
it will have to address some key challenges in order to fulfil the expectations of
management and shareholders.
Data collection and billing is still the main focus of the Revenue Assurance
departments. Companies confronted with a saturated market focus more on
customer retention.
Revenue Assurance functions hence are gradually turning their attention to the endto-end revenue value chain, looking at the business performance and the interaction
between the different parts of the chain.
While this shift in focus can indeed be of added value to the company, Revenue
Assurance professionals should be careful not to lose track of the Revenue
Assurance principles. The continuous monitoring of the basic Revenue Assurance
controls must remain a top priority, given the rapidly changing environment.
Few areas where care needs to be taken are :
Chapter 8
References
1. Market Research Reports by:
Gartner
Forrester
E&Y
2. White Papers By :
Deloitte
KPMG
HP
Analysis Mason
GRAPA
KITE