The mobile industry lost more than $58bn in 2011, due to inadequate operator billing systems, according to a report published this week. The figure, which represents over six per cent of operators’ global revenues, was attributable to inadequate fraud management and revenue assurance processes, according to Juniper Research. And it is a figure that currently looks set to grow.
The report suggests that under a ‘nightmare scenario’ whereby operators fail to implement any remedial measures over the next five years, the scale of losses could rise five-fold by 2016.
As operators have had to integrate an increasing range of devices and simultaneously manage a surge in network traffic, billing systems have failed to keep pace, according to the report. As a result, they are increasingly unable to accurately or efficiently capture the large volume of transactions that occur on the network.
The complexity has magnified the scale of revenue loss, resulting in bad debts and a greater opportunity for fraud. However, operators can minimise the losses by implementing automated system solutions that provide comprehensive visibility of the revenue chain, suggests Juniper.
With sustained investment, the firm’s study finds that leakage will decline to four per cent of revenue in 2016, representing a net reduction of nearly $15bn per annum compared with 2011.
‘As the industry moves more aggressively into a 4G-LTE environment, telcos risk undermining any revenue actually earned from value-added services by continuing to not invest in appropriate business support systems,” said report co-author Dr Windsor Holden. “Despite their initial costs, RA and FM systems demonstrate a strong case for return on investment.’
Will regulators ever be able to catch up with the rate of change in the telco/tech industry?
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