Revenue assurance in different sectors in telecom

7/24/2019 Revenue assurance in different sectors in telecom

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ACKNOWLEDGEMENT

We are extremely grateful to Dr. Tripti Dhote, Faculty, Management, Symbiosis

Institute of Telecom Management, Pune for her guidance. The continuous

superision ! "een interest #ere a constant source of guidance during our pro$ect.

We ta"e this opportunity to express our sincere gratitude to the institute for giing us

an opportunity to #or" on a year long research program #hich helped us explore a

different field of technology related to telecom. We #ould also li"e to extend our

than"s to our director sir, Prof. Sunil Patil and all our Faculty Members for theirinaluable guidance, constant encouragement made this pro$ect see the light of the

day.

ANIRUDH TALWARBONEY MATHAI

MANISHA P. TOPPOMEGHA SHARMA

PARAMVEER KHOSASAURABH THAKRAL

Symbiosis Institute of Telecom ManagementPage 1


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ABSTRACT

The art of reenue assurance is no# undergoing a fundamental shift as

net#or"s conerge and metrics become more complex. . The scope of

reenue assurance strategies is #idening to include more and more touch

points as telecom understand that reenue%assurance isn&t as easy as it used

to be.

Our Main Areas o Con!ern in!"u#e$

Will '( enable the Telecom companies to cope up #ith the challenges

of gro#th and innoation)

'ole of '( in today*s +ypercompetitie mar"et.

olution of '( in accordance to the dynamic business challenges.

Significance of '( in Deeloped and Deeloping conomies.

Significance of '( #ith reference to ne# product launches, -- and

/ serices.

'ole of '( in turning ris" and opportunities into results.



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Con%en%s

&. Ti%"e o %'e (ro)e!%*. E+e!u%i,e Su--ar/. In%ro#u!%ion o Re,enue Assuran!e

Re"e,an!e an# 0us%ii!a%ion

Nee# o Re,enue Assuran!e

Benei%s o Re,enue Assuran!e

C'a""en1es a!e# in Re,enue Assuran!e

2. Resear!' Me%'o#o"o13. Ana"sis o ,arious re,enue s%rea-s

Pre(ai#

Pos%(ai#

Roa-in1

Va"ue A##e# Ser,i!es

In%er!onne!%

4. Pos% /G S!enario5. Con!"usion6. Reeren!es



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C'a(%er &

Ti%"e o %'e Pro)e!%

Ana"sis o re,enue assuran!e (ra!%i!es a!ross #ieren% re,enue s%rea-s o a

ser,i!e (ro,i#er



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C'a(%er *

E+e!u%i,e Su--ar

+istorically, 0'eenue (ssurance1 2'(3 referred to systems, processes, and

personnel responsible for analysing the billions of daily usage transaction records

generated and processed by a 4ommunications Serice Proider*s 24SP*s3 net#or",

5usiness Support Systems 25SS3 and, to a lesser degree, its 6perations Support

Systems 26SS3. The mission, in an effort to retain eery billable amount of reenue,

#as to ensure that no transactions #ere lost as they traersed each net#or" node

and system.

In recent years, the scope for '( has expanded considerably. Today, a modern '(

solution is a robust platform designed to address such functions as data

management, analytics, fraud control, #or"flo#, and results isuali7ation. Through

the experiences of the past, '( departments are no# a natural launch point for

strategic functions8 especially margin management and a nascent function "no#n as

business optimi7ation. In so doing, '( integration #ith enterprise data #arehouses,

business intelligence, and analytics platforms is increasing.

So, in our research #e hae tried to understand the dynamics behind the term

0'eenue (ssurance1. We identified arious reenue lea"age modes being net#or"

related, billing related, mediation related and many such more for all the reenue

streams of an operator i.e Postpaid, Prepaid, 'oaming, Interconnect and 9(S. In the

process #e understood arious facets of the operations and trac"ing mechanisms for

billing, mediation and rating. This helped us to gain an insight on the

interdependence of these and their cumulatie effect on 'eenue (ssurance.

We, in our report hae addressed these issues #ith the analysis of arious

ob$ecties of carrying out reenue assurance for a Telco. This report #ill also help

the readers to understand the arious challenges faced and techni:ues to address

0;ea"age Management and Preention1 and 0'is" Management1 #hich forms the

core of '( operations.



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We hae also carried out a study as to #hat #ould be the effect of adent of /

serices on 'eenue (ssurance. With the mar"et being drien to#ards more of data

usage than oice centric, the ariables inoled in proiding both prepaid as #ell as

postpaid serices #ould deepen the need of carrying out chec"s and balances of

reenue modes.



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C'a(%er /

In%ro#u!%ion o Re,enue Assuran!e

Re"e,an!e an# 0us%ii!a%ion

Indian telecom operators lose crores of 'upees eery year due to reenue lea"s and

other ris" factors. This problem has #orsened #ith the rollout of / serices and the

conse:uent gro#th in consumption of alue added serices that #ill boost data

transfer and do#nloads to ne# heights.

6perators continue to struggle #ith a ariety of issues from expanding theirsubscriber base in saturated mar"ets to managing stupendous subscriber gro#th in

mar"ets that are still deeloping. More often than not, telecommunication operators

#atch helplessly as crores of 'upees of their reenue goes unaccounted. 'eenue

lea"age is a fact of life, gien the technical and business challenges in this

complicated enironment. 4ompanies #orld#ide ta"e a ? lea"age in reenue

as normal. -o#, due to competitie pressures, companies are beginning to focus on

internally tightening their processes to curb reenue losses.(ccording to a recent surey, deeloping mar"ets face higher reenue lea"age than

deeloped mar"ets due to rapid gro#th and technological change. 9arious reenue

assurance research reports say that the degree of exposure lies in the range of


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operational policies by systems as #ell as personnel and infrastructure constraints

namely band#idth, security and facilities.

With the adent of / serices, communication serice proiders are proiding a

#hole ne# range of serices including triple play, ideo on demand, ideo streaming,

m%commerce etc. This means that complex 6SS, flexible billing options and next

generation charging gate#ays are being deployed, #hich has resulted in greater

aenues for reenue lea"age. The integration challenges #ith respect to technology

remain #ith / and ;T as these next generation systems need to co%exist and

interoperate #ith legacy systems. -ext generation serices come #ith their o#n set

of lea"age issues related to content settlement, adertising reenue settlement,

policy enforcement and real time rating and charging.

There needs to be strong enforcement of business rules and transparency in the

alue chain to minimi7e reenue lea"age across all the players in the ecosystem.

Today, the greatest challenge for operators is to establish a frame#or" to cultiate

sustained profitable gro#th. The enironment is competitie and it demands rapid

response from operators to eer changing business and technology enironments

but offers little flexibility and this is #here the reenue management comes in.

'eenue (ssurance is becoming proactie rather than reactie. arlier, it #as a

reactie function. 'eenue #as lost and then operators #ould try to find and plug the

lea"age. -o#, operators #ant to identify the loopholes een before they build up and

try and plug them. (s a result these efforts are being closely tied to areas li"e 5I,

analytics etc. (lso, the IT and net#or" side of the organi7ation are being realigned to

plug these reenue gaps. Most operators hae reali7ed that they need executie

sponsorships to run this, as loopholes can exist across the organi7ation and they

need a high leel drie to plug this.



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Nee# o Re,enue Assuran!e in Te"e!o- Se!%or

'eenue assurance has emerged in recent years to become an increasingly critical

component in the transformation of telecommunications operations. 'eenue(ssurance is the actiity, #hich is performed to detect a reenue lea"age and

subse:uently to preent the lea"age. 'eenue (ssurance assesses and measures

the core 'eenue Management 4hain. It guarantees that the 'eenue Management

4hain is functioning as it is specified. 4atering to the telecom frauds can be

considered as an xtended 'eenue (ssurance.

There are seeral factors contributing to focus on reenue assurance by telecom

operators

Re1u"a%or Pressure

4ontinued scrutiny and pressure by regulators mean today*s Telcos executies must

be able to point specifically and definitiely to proof for the numbers they report to

sta"eholders and the public. Sarbanes%6xley 2S6C3 and a host of other regulatory

re:uirements are forcing carriers around the #orld to rethin" ho# they trac" their

net#or" and billing actiities. xecuties no# re:uire more comprehensie and

transparent forms of reenue assurance 2'(3 to access the numbers and maintain

the necessary integrity.

Proi% Pressure

For most Telcos, the highly profitable days of the past are gone, and suriing to%

day*s competitie mar"et re:uires them to 0tighten their belts1 and discoer any #ay

possible to increase earnings. 5y determining ho# reenues are being missed, '(

can generate an essential source of preiously unreali7ed income.

Mer1er Pressure

Telcos that participate in a merger find their o#n special brand of reenue manage%

ment pressure. When multiple mediation billing and other systems from disparate

companies are forced to #or" together, it is increasingly difficult to "eep errors out of

the reenue management process.



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Con,er1en!e Pro!ess

The dream of each telecom operations manager is a #orld #here both the net#or"

enironment and the billing enironment function in a completely conerged

frame#or". 5ut the gradual migration to#ards this scenario increases pressure on

existing systems and operations to #or" at maximum capability and flexibility, #hich

ultimately generates more errors and ris"s.

Inno,a%ion Pressure

For telecommunications companies, the last fie years hae generated more radical

renoation of net#or" infrastructures and business operating assumptions than all

the years before that combined. ach month, hundreds of ne# technologies, prod%

ucts, price plans, and mar"eting approaches force net#or" and systems managers

to continuously stretch and challenge their reenue management capabilities. (s the

rate of this innoation increases, the failure rate for '( systems #ill undoubtedly

gro# as #ell.



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The follo#ing picture sho#s the results of a surey by PM to find out the factors

most li"ely to transform the Telecommunications industry. This reflects the gro#th of

mobile ban"ing and payments, #hich is creating ne#, independent reenue streams#ith accompanying billing and security issues.

(n oer#helming proportion 2E

percent3 beliee the threat of

reenue lea"age and fraud #ill go

up, and half thin" this rise #ill be

significant.



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Benei%s o Re,enue Assuran!e

'eenue (ssurance solution can benefit any Telecom industry in the follo#ing #aysG Identify opportunities for cash, reenue generation, margins and profitability

Identify, measure and preent the ris" points for 'eenue lea"age

Identify process Improement and reenue recoery opportunities

Preent billing inconsistencies before they reach the customer bill and

increase billing accuracy

'educing operational costs

Focus on customer ac:uisitions and retention propositions

Diert the 'eenue for more profitable endeaors

Improe 4ustomer xperience

C'a""en1es a!e# in !on#u!%in1 Re,enue Assuran!e

(s Telcos moe deeper into next%generation serices and content%drien serice

enironments, 'eenue (ssurance becomes both, more complex and more critical

The ma$or challenges faced in carrying out 'eenue (ssurance are mentioned

belo#G

Co-("e+ (ro!esses an# (ra!%i!es$

(s Telcos operate under a stricter regulatory regime, ne# rules are forcing them

to increase their internal control and to ensure generating 'eenue at highest

leels of efficiency. (s a result8 expansion of product portfolios, net#or"s and

serices, operations, processes and reenue chains are becoming highly

complicated #hich ma"es '( difficult for implementation.

Te!'ni!a" !o-("e+i%$



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(ccelerated gro#th in data, IP and real%time serices due to dynamically eoling

technologies, continuous demand for ne# serices, complex processes and

business systems infrastructure adds complexity in system configuration thus

hindering exposure for '(.

Da%a a,ai"a7i"i%

'eenue data is difficult to obtain% #ith too many sources of data and too many

reports. xtracting the right data #ith no integrity and :uality issues is a big

challenge to start #ith. This leads to difficulty in :uantifying 'eenue losses.

Peo("e a!%or

-eed of competent '( analysts and Sub$ect matter experts #ith right s"ills and

ade:uate "no#ledge to not only identify suspicious data but also perform :uic"

inestigation and suggest :uic" #ins is an important but difficult tas".



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C'a(%er 2

Resear!' Me%'o#o"o1

This report has been prepared

(fter detailed study and learning aboutG%

4ompany, its products and its capabilities

lobal and Indian mar"et

Top tools, applications and companies in the mar"et

Perusal of numerous research reports, articles, blogs from M>M experts and

#hitepapers from the industry.

6n the basis of discussions held #ith mentors at 4onnectM Technologies

(naly7ing the results of surey and finding out the re:uirements in the

industry



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C'a(%er 3

Ana"sis o ,arious re,enue s%rea-s

PREPAID

O,er,ie8

( prepaid mobile phone, also commonly referred to as pay%as%you%go, pay%as%you%

tal", pay and go, prepaid #ireless, is a mobile phone for #hich credit is purchased in

adance of serice use. The purchased credit is used to pay for mobile phone

sericesat the point the serice is accessed or consumed. If there is no aailable

credit then access to the re:uested serice is denied by the mobile phone net#or".

Hsers are able to top up their credit at any time using a ariety of payment

mechanisms.

Hnli"e postpaid phones #here subscribers hae to terminate their contracts, it is not

easy for an operator to "no# #hen a prepaid subscriber has left the net#or". To free

up resources on the net#or" for ne# customers, an operator #ill periodically delete

prepaid SIM cards#hich hae not been used for some time, at #hich point their

serice 2and its associated phone number3 is discontinued. The rules for #hen this

deletion happens ary from operator to operator.

Pre(ai# Bi""in1 Pro!ess

http://en.wikipedia.org/wiki/GSM_serviceshttp://en.wikipedia.org/wiki/GSM_serviceshttp://en.wikipedia.org/wiki/Intelligent_Networkhttp://en.wikipedia.org/wiki/Intelligent_Networkhttp://en.wikipedia.org/wiki/SIM_cardhttp://en.wikipedia.org/wiki/Intelligent_Networkhttp://en.wikipedia.org/wiki/SIM_cardhttp://en.wikipedia.org/wiki/GSM_serviceshttp://en.wikipedia.org/wiki/GSM_services


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When customer ma"es a call, prepaid s#itching gate#ay captures the calling

number and sends the account information to the real time billing system.

'eal time billing systems using the aboe information, authenticates the

identity of the user, calculates the customer account&s remaining balance using the

rating tariff table and maximum allo#able duration of the call and sends thisinformation to the prepaid gate#ay.

The gate#ay establishes the call.

During the call, gate#ay monitors the call so that the user do not exceed the

maximum allo#able call duration.

When the call is oer, the gate#ay sends the actual call duration to theprepaid billing system, #hich then calculates the actual call cost and updates the

account balance, decreasing the remaining balance.

Areas o "ea9a1e

4onentional sources of reenue lea"age typically include system integration issues

resulting from the diersity of the technological landscape for proiding serices, the

complexity inoled in integrating aried 5SSB6SS, inade:uate enforcement of



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operational policies by systems as #ell as personnel and infrastructure constraints

namely band#idth, security and facilities.

+o#eer, the more serious causes of lea"age are related to the uni:ue dynamics of

the Indian telecom landscape. With ne#er serice proiders entering the mar"et,

existing operators face the challenge of sustaining mar"et share. ( couple of years

bac", India had only six ma$or operators. Today there are oer fifteen of them #ith

more operators #aiting to enter the mar"et. Moreoer, these proiders are using

near desperate measures for grabbing subscribers and this is leading to sharp

declines in ('PH and (MPH. This has resulted in the formation of a larger cloud

oer operators than #ould hae been the case #ith simply conentional forms of

reenue lea"age.

The main area of lea"age in Prepaid are G%

&. CDR Re"a%e# Lea9a1e The lea"age due to 4D's can occur basically at t#o

leels

&.&Ne%8or9 Le,e"

Ca"" re!or#s no% (asse# ro- s8i%!'es Due to errors in s#itches, the

4D' go unaccounted or are $ust absent. The serice hence is used but there

is no trac" of it.

Ca"" re!or#s no% (ro!esse# !orre!%" 7 Me#ia%ion The 4D' are

for#arded correctly by the physical systems but at the mediation leel they are

unprocessed and hence loss of reenue

Ca"" re!or#s no% (ro!esse# !orre!%" 7 7i""in1 ss%e- Just li"e at

mediation leel, the 4D' are processed correctly by preious systems but the

physical deices at billing are faulty and don*t bill for the serice used. The

problem can be in the rating or charging systems

&.*Me#ia%ion Le,e"

In!orre!% or-a%%in1 o CDR %o or8ar# (t the mediation, the 4D' are

filtered and refined in a format that it can be understood by 5illing systems. If



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the system is not synchronised #ith the billing system re:uirements, then the

4D' become #aste for billing and are unable to be billed

:ai"ure %o i"%er re!or#s !orre!%" The 4D' need to be filtered at the

granular leel for proper rating and charging at the billing systems. If not

filtered correctly, the billing systems are unable to identify and charge the call

resulting in loss of reenue.

*. IN Re"a%e# Lea9a1e Hnli"e post%paid, at prepaid the 4D' mediation chec" !

reconciliation process is done by the intelligent net#or".

The accounting operations are executed in real time by a system #ith little manualinterention possible. In addition to 4D' related ulnerabilities, there are fe#

other areas in I- susceptible to lea"age

*.& Pro1ra--in1 errors Due to increased competition, ne# and complex

serices and plans are released in the mar"et #ithout configuring the I-

database.6ne such problem occurs #hen the I- fails to accurately decrement

the oucher database and hence si7able reenue is lost.

*.*In%erna" rau# % mployees enter inalid ouchers, or programmatically alter

oucher balances bypassing the #hole oucher management system and so

tal"time is generated #ithout eer reali7ing it.

/. :rau# Re"a%e# Lea9a1e ; Fraud represents the deliberate intention to aoid

payment. There is many #ays for fraudsters to exploit prepaid serices.

4ertain frauds especially internal frauds occur #hen fraudsters are able to exploit

data integrity issues or process loopholes.

Fe# areas of fraud in prepaid scenario are



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/.&. P'si!a" Dis%ri7u%ion % This is historically a ery high fraud area. These

frauds are related to starter "it distribution, oucher generation and

distribution.

4an arise if secret PI- are not communicated to endor in secure manner

SIM cards in #arehouse are not "ept trac" of and actiated before sale

'49s printed and profile on 9MS don*t match

/.* Sa"es an# Pro,isionin1 :rau# Ma$orly caused by endors or internal

employees. Main #ays in #hich such frauds occur are %

Promotional schemes not deactiated on a timely basis.

Fa"e sales recorded to gain sales commission

(ccounts in alid state #ith account balance greater than default balance

/./ In%erna" Su7s!ri(%ion :rau# 4ause by internal employees, people #ho

hae access to systems and net#or". Subscriber attains a prepaid connectionand an accomplice #ithin the company remoes the prepaid flag from +;'.

Subscriber uses the serice and system assumes it to be a postpaid

connection. (t the end of billing cycle, the 4D' for#arded to postpaid billing

system are re$ected and hence reenue is lost.

P"u11in1 %'e Lea9s



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Despite the increased a#areness of the importance of reenue assurance,

telecom carriers #orld#ide are facing gro#ing reenue losses, as conergence,

increased complexity and the changing nature of serices are ma"ing it difficult

to tac"le lea"s.

There is a greater need for plugging reenue lea"age so as to reduce customer

churn, to maintain billing accuracy standards and to safeguard against loss of

reenue. en today, about one%fifth of operators #orld#ide do not hae a

formali7ed reenue assurance organi7ation structure. ither internal audit groups

or other functions perform reenue assurance actiities, usually in a limited and

reactie manner.

Most telcos in India hae a reenue assurance team or competency #ithin their

IT set%up today. This team conducts regular audits to identify loopholes or points

from #here lea"age is happening. The team then #or"s proactiely #ith the

larger IT team #ithin the telco to plug these holes. (t the same time, some telcos

outsource this audit to endors #ho speciali7e in reenue assurance and offer

solutions to capture the reenue #hich #ould other#ise be lost.

With the ongoing rush to launch ne# serices, offers and bundles, 4SP teams

continue to miss processes in their operational enironments, thereby resultingin improements in one domain and failures in others. ( strong system is the

most effectie #ay to tac"le critical challenges across the reenue chain. The

"ey components of an efficient system #ould include strong #or"flo#

management, effectie case management, proactie monitoring methods,

reconciliation and data integrity chec", po#erful and simple to use T; tools,

enhanced trending capability, integrated rating engine, Kout%of%the%box* reports,

dashboards, PIs and audits. These features collectiely help in identifyingunbilled subscribers and in detecting potential reenue loss issues een prior to

the launch of a ne# serice, proactie ris" reduction, reducing unnecessary

expenditure and managing inter%carrier and partner expenses.

Ma$or assurance actiities that can be underta"en to plug and reduce the

reenue lea"ages are %

&. Re!on!i"ia%ion o MSC an# IN


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The only #ay to ensure that all customer calls are accurately accounted for the

I- is by reconciliation of the 4D's created by the MS4 against the 4D's

generated by the I-.

This can be done by modifying the process to establish a mediation feed that #ill

identify, filter and prepare all of the prepaid 4D's coming from the MS4. -oteG

many net#or" managers disable the generation of 4D's at the s#itch in order to

minimi7e 4D' traffic. +ence, it #ill be re:uired to establish a limited number of

feeds, for a limited period of time to generate sufficient input for the re:uired

reconciliation.

stablish an I- 4D' feed for a limited time period

4reate parallel databases % one to store I- 4D's and another to store MS4

4D's

4reate a set of reconciliation reports to compare the t#o sources, and identify

any discrepancies

*. IN assuran!e ; Since billing is handled by I- for prepaid serices, any error at

this point can proe to be fatal. ;ea"age can arise due to system issues or due

to frauds. Fe# steps that can be ta"en to cater to these ulnerabilities are %

Perio#i! Vou!'er Ba"an!e Re(or%s % ( snapshot of starting balances for all

customers at a specified time Ldaily, #ee"ly, or monthly plus reports on all of

the additions oucher balances, "eeping trac" of all decrements made againstthese balances. This reduces both fraud and program error.

Cus%o-er Au#i% Re(or%s% same "ind of reporting as oucher balance reports

but on an indiidual customer basis.

Tes% Ca""s using selected accounts and specific phone calls to

predetermined phone numbers, of predetermined duration. The oucher



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management database is reie#ed to ensure the appropriate accounting

occurred #ithin the system

/. P'si!a" Dis%ri7u%ion Assuran!e% Proiding assurance on the distribution and

management of ouchers is a process that is best borro#ed from the retail

industry. 'etails hae been buying and distributing small items of high alue for

many years. Some of the techni:ues employed to assure this reenue stream

includeG

In,en%or an# Dis%ri7u%ion Mana1e-en% Ss%e-s% these systems are

created to trac" ouchers across their entire lifecycle, from creation,

purchase, distribution until their ultimate actiation by the customer. This type

of inentory management can proide an incredible increase in confidence

regarding oucher management, and has resulted in the identification of many

lea"age points for customers in the past

Vou!'er Tra!9in1 an# Au#i%% many times, organi7ations need the help of an

outsider, to simply reie# their oucher management operations, and

determine if there is a problem or not. In order to accomplish this, the auditor

needs to understand ho# the entire oucher management process #or"s, and

#here the #ea"nesses and ulnerabilities in that process might be



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POSTPAID

O,er,ie8

The postpaid mobile phone is amobile phonefor #hich serice is proided by a prior

arrangement #ith amobile net#or" operator. The user in this situation is billed after

the fact according to their use of mobile serices at the end of each month. Typically,

the customer&s contract specifies a limit or Nallo#anceN of minutes, text messages

etc., and the customer #ill be billed at a flat rate for any usage e:ual to or less than

that allo#ance. (ny usage aboe that limit incurs extra charges.

Postpaid serice mobile phone typically re:uires t#o essential components in order

to ma"e the &post%usage& model iableG

< 4redit historyB4ontractual commitmentG This is the basis on #hich the serice

proider is able to trust the customer #ith paying their bill #hen its due and to

hae legal resource in case of non%payment

> Serice tenureG Most postpaid proiders re:uire customers to sign long term

2


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Pos%(ai# Re,enue C!"e

The typical Postpaid 'eenue 4ycle can be diided into three categoriesG

Sales and Proisioning

4hargeable ent eneration and Processing

4ollections and 4redit 'is" Management

Ho8 Pos%(ai# 8or9s

-et#or" elements 2li"e s#itches, SMS43 produce ra# usage called Hsage Detail

'ecords 2HD's3 or 4all Detail 'ecords 24D's3, #hich contain information re:uired

by the billing systemG

4alling number 2( number3

4alled number 2the number receiing the call3 25 number3



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When the call started 2date and time3

4all duration

4all Type 2M64, MT4, etc., M64 stands for Mobile 6riginated 4all and MT4 stands

for Mobile Terminated 4all3

The aboe ra# 4D's from net#or" elements and also from other serice proiders

are receied by the billing system and the billing system conerts these into a format

understandable by the system. The aboe formattedBconerted 4D' is then guided

to find the customerBaccount to #hich the call should be charged and then rate the

eent accordingly.

The aboe rated 4D's are then stored in the billing data store, and on the billing

cycle date, the billing process pic"s up these rated 4D's and processes these and

renders billBinoice, ta"ing into account, the payments, taxes, discounts, etc. The

customer then pays the bill and the billing system is updated #ith the payment

details.

Areas o Lea9a1e

Ne%8or9>Re"a%e# Lea9a1e

Signaling errors on s#itches

4all records not passed from s#itches

4all records not processed correctly by Mediation

4all records not processed correctly by billing system

Incorrect metering

System errors

Data corruption System capacity mismatches 2for example, oerflo#s3

Misaligned processing or logic rules

Failure to actiate or proision the customer properly

Failure to trac" customer actiity properly

Discord bet#een operations and systems

Improper registration and management of net#or" inentory



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Me#ia%ion>Re"a%e# Lea9a1e

Failure to filter records correctly

Failure to balance batches 2in O out3

Failure to clear suspense fi les Incorrect application of customer identifiers

Incorrect application of policies

Incorrect formatting of call detail records 24D'3 to for#ard

Dropped records

Duplicated records

Bi""in1>Re"a%e# Lea9a1e

4onfusion oer #ho bills #hat Hsage beyond billing stop

Incorrect call plans

Incorrect pricing tables or pricing plans

6er%discounting

5illing errors

Poor suspense management

Incorrect billing setup

4orrect amounts, #rong currency

;ate billing

5illing the #rong elements 2for example, olume rather than duration3

:rau#>Re"a%e# Lea9a1e

Internal fraud

Theft of minutes

xternal fraud

Identity fraud

Hsage fraud

5illing fraud

Co""e!%ions> an# Dunnin1>Re"a%e# Lea9a1e

Failure to trac" old accounts

Misapplication of credits

Ineffectie dunning practices

Failure to feedbac" dunning lessons to Mar"eting, Sales, and Product

Planning

4redit policy management



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Pro,isionin1 an# Cus%o-er>Ser,i!e>Re"a%e# Lea9a1e

Physical circuits not ceased #hen account terminated

6er%proisioning

Proisioning #ithout notification of billing start 6er%budget proisioning

(buse of shortcut or fast%trac" processes

Improper update of customer status

Improper update of systems based on change in customer status

P"u11in1 %'e Lea9s

'eenue assurance of postpaid billing systems can be split into three areasG

4D' Pre%cycle Processing

4ycle Processing

Post 4ycle

CDR Pre>C!"e Pro!essin1

Pre%cycle includes 4D' generation, collection, mediation and routing to the billing

system. 4D's receied by the billing system, are in a pre%processed format.

4D' Preprocessing includesG

I#en%ii!a%ion an# or-a%%in1 o %'e CDRs% includes pre%rating Lassigning

an estimated alue onto each call in order to trac" the amount o#ed by the

customer at any time

De(osi%in1 %'e CDRs in%o %'e a((ro(ria%e !!"e i"e% holds all 4D's for

customers sharing a billing cycle, until the end of the cycle #hen their bills are

generated.

Sus(ension an# Error (ro!essin1 for 4D's not ready to be placed into

cycle files.

http://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#precyclehttp://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#cyclehttp://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#postcyclehttp://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#precyclehttp://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#cyclehttp://www.coded-vision.com/revenue_assurance/Postpaid_Billing_Revenue_Assurance.php#postcycle


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Pre C!"e Assuran!e

Pre%4ycle (ssurance duplicates assurance on the mediation systemG

9alidating the integrity of 4D's accepted

9alidating the integrity of the batches of 4D's sent from mediation or other sources

4hec"ing that the formatting, suspension and erroring of records is being done

correctly

Methods used includeG

< Sample audits of specific 4D's associated #ith different customers, eents or

conditions

> 4omprehensie balance audits of complete NbatchesN of 4D's

/ 4omprehensie cycle audits of all of the 4D's for a particular bill cycle

These audits re:uire the analyst to gain access to stores of 4D's at multiple points

along the pre%cycle trail, and reconciling 4D' integrity and type counts.

C!"e Pro!essin1 ?Bi"" Genera%ion@

(t the end of a pre%scheduled cycle, the billing system accepts and sorts all 4D's

held in a cycle, and processes them through formal rating and billing processes. This

includesG

< 'ating of 4D's x 4ustomer

> (pplication of monthly fees to each bill

/ (pplication of unpaid balances and ad$ustments from earlier cycles



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Bi""in1 C!"e In%e1ri% Assuran!e

The integrity of the billing cycle run typically inoles the tracing 4D's through the

entire cycle process. This re:uires the analyst to fully understand the billing system

operations, so that audits of all the different tables in different parts of the cycle can

be performed.

Pos% C!"e Re,enue Assuran!e

Post 4ycle 'eenue (ssurance is a series of chec"s and audits run against the

results of the billing cycle run. This ensures that the billing cycle ran processed data

correctly before the bills #ere published.

This may also include Nspot auditsN of indiidual customer bills, and Nbatch auditsN of

the totals generated by the cycle.

The steps in post%cycle assurance includeG

< xtraction of a sampling of customer inoices and the manual alidation of

their integrity

> 4omprehensie Nbatch totalN runs and comparisons against historical results

and against forecast



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/ 4omprehensie audits of reenue totals against net#or" actiity to assure that

the appropriate reenue reali7ation leels are being met

:rau#s

Fraud in the telecom industry refers to as an intentional or deliberate misuse of

serices by the subscriber in order to gain an unfair adantage or to aoid

payment for the used serices. Fraud is a problem impacting reenues and costs

for a telecom operator. ro#ing concerns oer fraud in the industry can be

attributed to the follo#ing reasonsG

In!reasin1 Vo"u-es$ Telecom operators are facing rapid gro#th rates in

subscriber base and usage patterns of subscribers. This poses scalability issues

as processes and systems may not be scalable in alignment #ith business

gro#th rates.

Co-("e+i% o Ss%e-s$ In order to combat competition and proide uni:ue

serice proposition to customers, telcos across the #orld are launching

innoatie products and serices. These serices are technically more complex

and system intensie, leading to speciali7ed "no#ledge for accurate configuration

and operation of such serices.

The aboe factors can lead to significant process and system ulnerabilities thatcan be exploited, resulting in fraud related reenue lea"age. The follo#ing picture

sho#s arious areas susceptible to Frauds



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Su7s!ri(%ion :rau#

Subscription fraud inoles setting up a false identity to gain access to net#or"

serices #ith no intention to pay for serices, either by creating a fictitious identity or

by fraudulently using the identity of another party to pay for those serices. ( single

fraudster can #rea" haoc by setting up multiple accounts and thereby rac"ing up

multiple bills, or by causing an unsuspecting subscriber to be billed for the serices

used. 5oth of these scenarios routinely result in large losses and increases to

uncollected reenues. The best #ay to preent subscription fraud is to perform

thorough customer erification chec"s, such as credit references and subscriber

serices usage analysis that profiles an indiidual*s calling patterns regardless of the

phone they may be using.

These steps help establish a true profile of behaior patterns, so that indiiduals can

be uni:uely identified regardless of the credentials they supply. Subscription fraud,

#hich occurs at the time of applying for a serice, can be th#arted by confirming that

none of the applicant*s details are present in any "no#n fraudster list. Further

measures include obtaining an initial deposit and limiting usage #ith controls such as

credit limits.

Pre-iu- Ra%e Ser,i!e


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In addition, P'S frauds are often used in con$unction #ith roaming and subscription

fraud. For example, a fraudster can create a premium rate serice by setting up a

serer in a country #ith a #ea" prosecution history. 6nce the serice has been

established, the fraudster #ill use identity theft andBor subscription fraud to establish

a large number of #ireless accounts. The fraudster #ill then ship the phones outside

the operator*s country and begin dialing the P'S number #ith the ne# phones. This

scam ta"es adantage of the delay in usage reporting bet#een SM operators to

allo# large calling olumes to go undetected. It is :uite feasible for the fraudster to

generate < million in hard%dollar losses for the operator oer the span of a

#ee"end.

To preent this type of fraud, monitor usage patterns to identify unusual, often high%

usage call patterns to P'S numbers. For example, if there is a sudden increase in

traffic for a particular P'S number, especially if the traffic originates from a small

number of calling line identities, it*s #orth the time and effort to loo" a bit closer.

Perform credit and other reference chec"s on the o#ners of P'S numbers #hen

they submit an application. In addition, ris" of this class of fraud can be limited by

profiling the traffic receied by P'S numbers and raising alerts #hen usage trends

are liable to see a significant change in their behaioural pattern.

6ne solution for P'SBroamingBsubscription fraud is to ealuate the location of the

initial phone registration to the net#or" andBor the first fe# phone calls made. If the

phone is first actiated outside the home net#or" or home country, the operator

should shut it do#n, or at least route calls to the fraud department.

Roa-in1 :rau#

(busing roaming facilities to ma"e free calls is also a costly problem. 'oaming

cloning fraudA#here subscriber identity numbers are used in another mar"etAhas

been the most #idespread type of this "ind of fraud. 'oaming fraud also can

increase the incidence of P'S fraud, as described aboe.



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For example, roaming records for an operator in -orthern urope #ere routinely

receied from the isited net#or" > hours after the calls too" place. Since the fraud

department did not #or" oer the #ee"end, handsets purchased on a Thursday #ere

:uic"ly shipped to another country #here the fraudsters #ere able to get three days

of fraudulent use from the phones before any problem #as detected.

To preent this type of fraud, monitor the usage patterns of both inbound and

outbound roamersAfor example, deelop regular high%usage reports that are based

on call attempts as #ell as call olume. 'oaming fraud often exploits the increased

delay bet#een serice usage in the isited net#or" and the subse:uent deliery of

billing information to the home net#or". 'is" of this exposure can be limited by

capturing and analy7ing the near real%time deliery of this information bet#een

net#or"s.

The exchange of roaming information bet#een operators has traditionally been

associated #ith delays. Within the SM sector, an operator has up to /@ days to

exchange this information. +o#eer, much more use of information generated by the

home net#or" 2ersus relying on the isited net#or"3 can and should be usedAin

particular, SSQ signaling information and the introduction of 4(M; serices. The

SM (ssociation itself is #or"ing to adance this process #ith the introduction of

-'T'DAnear real%time roaming data exchange.

In%erna" :rau#

Internal fraud has many faces, from applying serices directly onto the s#itch #ithout

amending the billing system and suspending the generation of usage information, to

the reactiation of used prepaid oucher numbers. 6ther examples include remoing

records from billing systems, creating fictitious accountsBcustomersBemployees,

remoing call detail records 24D's3 from the billing cycle, or $ust manipulating the

accounting and credit processes. (ll these factors can mean lost or incorrect billing

records, more non%payments and general customer dissatisfaction.



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When loo"ing at specific sources of internal fraud, one must consider that different

departments hae different opportunities to perpetrate it. gG people #ithin net#or"

operations can suppress the generation of usage information on certain routes and

trun" lines. Fol"s in billing operations can modify or preent billing for certain

numbers or groups of numbers. (nd customer serice reps can steal identity and

payment information, leading to credit card scams against customers and operator.

( clear%cut example occurred #hen someone #ithin the net#or" group of a Tier !arrier re!on!i"ia%ion

Similar to the standard interconnect techni:ue. This is the most lucratie area for

lea"age identification and cost saings #ith inter%carrier traffic. This inoles a simple

audit to chec" the accuracy of the amounts claimed by other carriers. Millions of

dollars per month hae been "no#n to be uncoered and corrected by reenue

assurance actiities in this area. The best method is toG

4reate a special file, database or data #arehouse capable of handling

extremely high olumes of data Lone or more months of history.



42/74

enerate detailed Nie#sN of target carrier traffic.

4hec" the numbers proposed by the other carrier match those from the

data store.

If not, drill do#n into the detail, and bac"trac" into the integrity of the

4D' handling flo# to confirm your findings.

Hse this proof to mediate a resole and if desired, notify regulators.

Ho8 -o7i"e roa-in1 8or9s

Figure the sho#s commercial and technical details for international mobile

roaming. The diagram focuses on the international roaming #holesale and retail

arrangements, for simplicity.

The mobile user 2Mobile Hser (3 has an international roaming serice #ith their

home operator 2+ome 6perator3 and is automatically connected to a isited net#or"

29isited 6perator (3 #hile roaming. Mobile Hser ( is automatically granted access to



43/74

9isited 6perator (*s net#or" #hen arriing in the isited country by an exchange of a

data bet#een +ome 6perator and 9isited 6perator (, #here 9isited 6perator (

confirms Mobile Hser ( is a roaming customer #ith +ome 6perator. (s such, the

#holesale roaming agreement bet#een 9isited 6perator ( and +ome 6perator

specifies ho# this data is to be proided to the isited operator. +ome 6perator

usually has #holesale roaming agreements #ith more than one operator in the same

isited country, #hich in this case is 9isited 6perator ( and a second net#or",

9isited 6perator 5.

(s a result, Mobile Hser ( can call home using either isited operator net#or"s, both

of #hich use international transit serices to carry the call bac" to Mobile Hser (*s

home country. Mobile Hser ( pays a retail price to +ome 6perator for the roaming

serice and does not pay 9isited 6perator (. Proided Mobile Hser 5 is not also

roaming, they #ill not incur any extra charges to receie a call from, or to ma"e calls

to Mobile Hser (. 9isited 6perator ( sends transferred account procedure 2T(P3 files

to a clearing house #hich for#ards them to the +ome 6perator. T(P files are used

for billing of calls #hile roaming. +ome 6perator can then pay 9isited 6perator ( the

#holesale charges as per call olumes in the T(P file and rates in the #holesale

roaming agreement. 9isited 6perator ( pays an international carrier 2International

4arrier3 for carrying the call and handing oer the call to +ome 6perator.

International 4arrier pays +ome 6perator a termination rate for terminating the call

in the home country.

/.3 Roa-in1 ris9s an# !on%ro"s

/.3.& Par%ner (ro,isionin1

4ertain roaming call scenarios not correctly proisioned by operators

Con%ro"

%Monitor the process of performing testing for all the roaming scenarios and

ensure that the stipulated serices and tariffs are implemented on the net#or"

elements

P;M- ID not configured in billing System for roaming partner leading to T(P%

6HT files not being generated

Con%ro"



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%Perform a periodic chec" to ensure that P;M- IDs for all roaming partners

are configured

%(naly7e error buc"ets for roaming 4D's being dropped due to missing

P;M- ID

Su7s!ri7er (ro,isionin1

'oaming serices are actiated on +;' but not on 5illing System resulting in

roaming subscribers not being billed

Con%ro"

%Perform reconciliation of roaming serices actiated for subscribers at s#itch

2+;'3 s. 5illing System

Ra%in1 an# 7i""in1

Processed T(P%6HT files sent by the operator not receied by the clearing

house leading to non%billingBdelay in billing

Con%ro"

%Perform reconciliation bet#een T(P%6HT files sent to clearing house and

T(P%6HT files receied by clearing house 2as per the report from clearing

house3

Delays in sending roaming +H's to roaming partners leading to

fraudstersBsubscribers exceeding their credit limit using the net#or"

Con%ro"

%Monitor the process of ensuring that +H's are sent to roaming partners on a

timely basis

T(P%I- files receied but not billed to subscribers leading to reenue loss

Con%ro"

%Perform a reconciliation bet#een T(P%I- files receied from roaming partners

and T(P%I- files billed bac" to the subscribers 2T(P%I- files pushed through

the retail 5illing System3

Delay inBabsence of '(P file processing leading to loss of reenue

Con%ro"



45/74

%Monitor the process of '(P file processing by generating a periodic report

#ith the date of receipt of '(P files and resolution date. Perform ageing of

pending '(P files and escalate the same

VALUE ADDED SERVICES

O,er,ie8

In the bac"drop of a rapid decline in oice tariffs, the telecom industry is cashing in

on Mobile 9alue (dded Serices to climb to the next leel of gro#th. With mobile

penetration expected to gro# up to nearly @


46/74

Va"ue C'ain o Mo7i"e>VAS

Con%en% !o(ri1'% o8ners$

(t the first leel of the M9(S alue chain are the content copyright o#ners, #hich

deelop original copyright content. xamples include music production houses



47/74

2Sa'eaMa, Sony3, 5olly#ood production houses 2ash 'a$ Films3, and media

houses 2Sony, Star, ee, etc.3

Cus%o-ie# !on%en% !rea%ors$

'efers to companies that generate customi7ed content for users through their o#n

portals. xamples include Mau$, 6ne EQ, and +ungama Mobile.

Con%en% (or%a"sa11re1a%ors$

These are indiidualsBorgani7ations that gather #eb content and in some cases

distribute content to suit customer needs. xamples include Indiatimes and

+ungama Mobile.

Mo7i"e o(era%ors$

They proide transport and support mechanisms for deliery of mobile content.

xamples include (irtel, 'eliance, 5S-;, MT-;, Idea 4ellular, etc

Te!'no"o1 ena7"ers$

6n the other end of the alue chain are technology enablers. These proide

technology platforms that enable access to M9(S. Players include 6nMobile, 5harti

Telesoft, Webaroo, etc.

Han#se% -anua!%urers$

Mobile handset manufacturers hae also started playing an important role, through

their interaction #ith all other sta"eholders across the alue chain. Their actiities

include embedding soft#are lin"s in their handsets, allo#ing direct access to content

portals, creating serices customi7ed to the need of certain regions, etc. ey players

in the Indian mar"et include -o"ia, Motorola, and Samsung.

Re,enue S%rea- or %'e Mo7i"e o(era%ors$



48/74

When a subscriber tries to do#nload any content then a re:uest is sent from

the mobile station to the 5TS

From 5TS this re:uest is for#arded to 5S4

From 5S4 this re:uest ma"es its #ay to the MS4

MS4 then chec"sG

If the subscriber is a postpaid or a prepaid subscriberWhether data serices are allo#ed to the subscriber. If it is not allo#ed, then

the re:uest is denied. If the authentication chec" is successful, then this

re:uest if for#arded to the content proider*s serer.

There are t#o modes of sending this re:uest i.e. either through SMS or

through I9' 2interactie oice response3.

If it is the I9' re:uest then it is routed to the content platform by re:uesting

the subscriber to press a specific "ey and guiding them to do#nload content

of their choice.

If this re:uest is of sms type then the short code is identified by the content

proider and "ey #ord is identified by the content serer and accordingly the

releant data is searched in the content serer.

6nce the content is found then the content proider*s serer #ould :uery the

database to facilitate the content do#nload. Furthermore, content proider

database also maintains a list of all subscribers #ho hae do#nloaded the

content.



49/74

6nce the subscriber has receied the content, an Internet Protocol Detail

'ecord2IPD'3 is generated and it contains the information #hich #ill be used

to rate and bill the subscriber for the do#nloaded content.

Bi""in1 Pro!ess$

4onsidering the Postpaid ScenarioG

For each content do#nload, an IPD' is generated by the content proider*s serer

#hich is used for rating and billing purposes. These IPD's are of > typesG

Pre%rated IPD'G These are based on the rate of information aailable in the content

proider*s serer. gG Some ring tone do#nloads #ill be priced at


50/74

technology enabler,


51/74

If a transaction falls, then the mobile operator often has no insight into that

failure. So, #hen customers call the contact center, customer serice

representaties typically don&t hae access to information about the

transaction.

In %'e area o Se%%"e-en%s$

6ften incorrect number of content do#nloads are considered for calculation of

reenue share leading to excessie payout to content proider

In case of ariation in the number of IPD's, the aerage of the IPD's gien

by operator and content proider is ta"en and accordingly the payment is

made. This often results in content proider declaring exaggerated figures toincrease the resulting payout.

In %'e area o IPDR !'ar1in1$

6perators often allo# data do#nload from an application #hich inoles a flat

rate for short codes and differential rate for "ey#ord typed.

This superficially indicates that all subscribers are charged at the same rate

irrespectie of the "ey#ord typed.

If the "ey#ord field is left blan" in the IPD's generated for data do#nload

from that specific application. In this case all such IPD's are charged at a

default rate of Kflat rate for short code plus minimum applicable rate for

"ey#ords*.

Re,enue Assuran!e Pra!%i!es (resen%" o""o8e#$

In %'e area o Bi""in1 ss%e-$

Perform reconciliation of data form content proider serer and operator I- to

ensure that all content that has been sent to subscriber is charged in I-.

4ompare tariffs as per mar"eting team*s tariff tables #ith tariffs configured in

the 5illing systemBSDP on a periodic basis.

4ompare list of all toll free numbers #ith the billing configuration in the SDP

and billing system to ensure accuracy of configuration.



52/74

In %'e area o Con%en% Do8n"oa#$

'eie# Kfailed status 4D'* from SMS4 to reie# any message sent to short

code not actiated in SMS4.

Perform reconciliation of subscriber serices proisioned in s#itch #ith billing

system to identify mismatch.


The operators in this regard are $ust using brute force to attempt to determine

#hich customers receie credits from among those #ho call the call centre.

This #ay the operator can "eep a chec" on #hether the customers hae really

suffered from the problem communicated or is this the #or" of some

fraudsters.

In %'e area o Da%a Visi7i"i%$

ery type of mobile content transaction should hae an eent detail record

and hae that information aailable to customer care.

Ma"ing the information aailable either online or in the call centre for a

predetermined time before sending it off to the billing system #ould help to

ans#er the customer :ueries.


The agreement made bet#een the content proider and the operator includes

calculation of reenue share on the basis of actual reports 2#ith a certain

ariance permitted3 instead of aerage of usage reports.

6perator reconciles the usage report receied from the content proider #ith

usage report as per operator SMS4.

In %'e area o IPDR !'ar1in1$

The operator should perform IPD' analysis on a regular basis to chec" if all

the details necessary for billing are captured accurately or not.



53/74



54/74

INTERCONNECT

O,er,ie8

Interconnect is the process of handling calls for other serice proiders. This allo#s

the customers of one serice proider to communicate #ith the customers of another

serice proider.

If t#o operators ( and 5 are not interconnect partners, then it #ould not be possible

for a customer of 6perator ( to communicate #ith a customer of operator 5.

Hsually, operators "eep their agreements #ith each other to allo# their customers to

communicate #ith each other. This gies good business opportunity to all the

operators engaged in interconnection. (ny interconnection point at #hich the parties

agree to connect their respectie -et#or"s is called NInterconnection PointN.

E+a-("es o in%er!onne!%ion in!"u#e$

T#o ad$acent, non%competing telephone net#or"s interconnect so that

subscribers on one net#or" can call those on the other.



55/74

;ong%distance carriers obtain access to the facilities of a local serice proider

and compete against that proider in proiding long%distance serices to a

common customer base.

Traditional #ireline telephone and ne# #ireless mobile carriers interconnect

so that subscribers of the traditional phone serice can call #ireless

subscribers, and ice ersa.

-e# competitie local telephone carriers interconnect #ith the incumbent

carrier so that they can attract subscribers in the common serice territory and

enable those subscribers to call subscribers on the incumbent&s net#or".

4ustomers of the incumbent telephone carrier ma"e calls to their dial%up

Internet Serice Proider, #hich in turn is a customer of a competing local

carrier.

In%er!onne!% In,oi!in1$

This is process of the production of inoices to send to an interconnect partner

relating to incoming interconnect call detail records 24D'3.

Interconnect 5illing concerned #ith calculating the amounts to be paid to and

receied from each of the net#or" operators that our infrastructure connects in order

for the successful call origination and termination. The 4D' for interconnecting calls

"eeps the call routing information as a group of alid alues to identify the carrier and

country details.

-ote that the set of Interconnect 4D's includes the follo#ing detailsG

4D's are those billable to retail and #holesale customers. It is reenue for

the telecom proider. It is also referred as local billing.

4D's that is only billable for Interconnect proiders. gG 6utgoing calls,

6utgoing Transit calls Incoming calls, etc. The 6utgoing calls are the expense

and Incoming calls are the reenue for the Telecom Proider.



56/74

Interconnect 5illing systems do pricing of all incoming and outgoing interconnect

4D's. Hsually, an interconnect price is determined for both incoming and outgoing

interconnect 4D's on the basis of the incoming or outgoing trun" interconnect route

that carries the call. Most commonly, a trun" ID represents a uni:ue interconnect

partner in the interconnect 5illing System.

Se%%"e-en% Pro!ess$

The Settlement Process #ill be used to settle the -et#or" 6peratorB4arrier inoled

in carrying calls from Interconnect 6#ner to 6ther -et#or" 6perator destination or

ice ersa.

The Process #ill bring the 6utgoing 2xpense to Interconnect 6#ner3 and Incoming

2'eenue to Interconnect 6#ner3 traffic for the settlement.

Settlement can be done on monthly or bi%#ee"ly basis using manual or automated

process. It depends on billing system to billing system ho# it supports partner&s

settlement.

Ne%%in1 Pro!ess$

-etting used to perform after the settlement is completed for the agreed

ProiderB4arrier. The netting is done by multiple settlement period for the multiple

serices, #hich it supports the same currency in 6perator leel.

There are t#o types of netting methodsG

A:TER$(fter for -etting of 6perator&s Interconnecting cost after subtracting

the amount bet#een operator and ProiderB4arrier

BE:ORE$5efore for -etting of 6perator&s interconnecting cost #ithout any

subtracting of the amount bet#een operator and ProiderB4arrier.

Re!on!i"ia%ion Pro!ess$

This is the process of the reconciliation of inoices coming from an interconnect

partner #hich relate to outgoing 4D's.



57/74

ery month interconnect partners exchange their 4D's for reconciliation purpose.

It is ery common to hae discrepancies in the 4D's proided by the t#o partners.

5illing Systems proide reports facilitating reconciliation of incoming and outgoing

interconnect 4D's. These reports "eep parameters such as call type, destination,

cost band, and duration so that these 4D's can be used by both operators to match

those parameters and identify missing 4D's.

There may be a situation, #hen some 4D's are found missing at either of the

operators& side. (fter doing re:uired reconciliation if matter does not settle, then

arious negotiations happen bet#een the partners, and finally, matter is settled by

paying some nominal amount to the impacted interconnect partner.

In%er!onne!% Ca"" S!enarios$

There could be arious interconnect call scenarios depending on type of agreement

bet#een different operators. ;et me try to coer fe# most commonly usedG

6perator (&s customer ma"es national call to 6perator 5&s customer. In this

case operator ( #ill pay some amount to operator 5.

6perator (&s customer ma"es international call through 6perator 5, because

operator ( does not hae direct agreement #ith any international operator. In

this case, operator ( #ill pay some amount to operator 5 and operator 5 #ill

ta"e care of settling do#n international operator.

6perator (&s customer ma"es international call directly using an international

operator. In this case, operator ( #ill pay some amount to internationaloperator directly.

(ll the aboe calls could be oice, SMS, MMS and data, etc.

In%er!onne!%ion A1ree-en%s$

To hae a successful interconnection, the follo#ing issues should be dealt #ith in the

interconnection agreement or by rule or order from the regulatory authorityG



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Pri!es an# a#)us%-en%s$ This includes the initial leel of interconnection

charges, a definition of the currency in #hich interconnection charges are to

be paid and ho# prices #ill ad$ust oer the term of the agreement to account

for exchange rate changes and inflation.

Poin%s o in%er!onne!%ion$The physical locations, #here interconnection #ill

ta"e place and the technical standards to be employed in the interconnection

are defined.

Trans(or% an# %rai! rou%in1$Some definition must be made for ho# calls

#ill be routed and #hat #ill be transport to delier the calls.

ua"i% o ser,i!e$Vuality standards are defined, particularly for time to

proision circuits and for call bloc"ing leels and remedies are defined for

#hen those standards are not met.

Bi""in1 an# !o""e!%ion$When and ho# to collect traffic data, #hen and ho#

to exchange bills, and #hen and ho# to ma"e payment should be specified.

Re!on!i"ia%ion$( process for reconciling traffic data and for ma"ing in:uiriesto the other party and for handling claims also should be incorporated. (

procedure for resoling discrepancies is useful #hich often inoles see"ing

recourse to arbitration, the regulator, or to the courts.

Nu-7erin1 P"an$(ccess of each operator to the country&s numbering plan

and numbering resources must be defined.

Trai! Loa#$4apacity to delier and receie the traffic that flo#s bet#een the

interconnecting net#or"s should be discussed and documented.

A1ree-en%s T(es$

6perators can hae different types of agreements to exchange their traffic. Most

commonly used agreements are listed belo#G



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Bi>La%era" A1ree-en%$Hnder this agreement, each party agrees to exchange

digital communications traffic #ith the other party oer its -et#or" at the

Interconnection Points andBor in one or more direct interconnections. Payment

settlement among different partners happens on monthly or bi%monthly basis

as per the agreement. (s per this agreement, both the operators can originate

and terminate their calls in each other&s net#or".

Uni>La%era" A1ree-en%$Hnder this agreement, one party sends their traffic

to other party&s -et#or" at the Interconnection and does not ta"e traffic bac"

from other party. Payment settlement among different partners happens on

monthly or bi%monthly basis as per the agreement.

In%er!onne!% Bi""in1 Pro!ess$

In%er!onne!% Ris9s F Con%ro"s$

Area$ Interconnect (greement

Ris9$ Inaccurate forecasting of traffic resulting in under or oer proisioning of

infrastructure.

Con%ro"$ Monitor process of obtaining a detailed traffic summary to estimate traffic

re:uirement for each operatorBcountry etc. Independently, analy7e traffic re:uirement

by comparing it #ith traffic forecasting as per interconnect partners.



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Area$Interconnect Partner Proisioning

Ris9$ Incorrect configuration of trun"s leading to interconnect trun"s not being

identified as billable trun"s

Con%ro"$Periodic reie# of all trun"s configured for interconnect to erify #hether

trun"s are configured correctly and #hether billable trun"s are mar"ed as billable.

Area$ent Processing

Ris9$4D'*s generated at s#itch incorrectly not sent to mediation B Interconnect

billing resulting in 4D'*s not getting billed.

Con%ro"$Perform a through reconciliation of 4D's generated in s#itch #ith 4D's

sent to mediation and #ith 4D's receied at billing system. This reconciliation

ensures that 4D's are not incorrectly dropped or missed during the process.

Area$rror Management

Ris9$Sudden dips or rise in traffic olumes going unnoticed resulting in errors or

discrepancies not being identified timely.

Con%ro"$Perform regular trend analyses of 4D's #ith different trun" groups to

identify any sudden dip or rise. Identify trun" groups #ith no usage and inestigate

further for reasons.

Area$'eporting, 6ff%Setting and settlement

Ris9$ Inoices sent to or receied from other operators may not be accurate.

Con%ro"$ 9alidate interconnect usage reports sent to interconnect partners #ith

4D's for calls terminating in o#n net#or". 9alidate inoices receied from partner

operators and termination 4D' report #ith 4D'*s for interconnect calls originated in

o#n net#or".

Area$Dispute 'esolution

Ris9$Disputes in settlement of inoices not being raised B resoled in timely manner

leading to loss of potential reenue.

Con%ro"$Monitor the process to ensure that disagreements in interconnect 4D's

are raised to interconnect partner as dispute #ithin the time specified as per



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agreement. Perform disputes aging in order to analyses the delays in resoling

disputes and escalate in order to resole pending dispute.



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C'a(%er 4

Pos% /G S!enario

Re,enue Assuran!e (ra!%i!es (os% /G

Indian telecom operators lose crores of 'upees eery year due to reenue lea"s and

other ris" factors. This problem #ill only #orsen #ith rollout of / serices and the

conse:uent gro#th in consumption of alue added serices that #ill boost data

transfer and do#nloads to ne# heights. With the adent of / serices,

communication serice proiders are proiding a #hole ne# range of sericesincluding triple play, ideo on demand, ideo streaming, m%commerce etc. This

means that complex 6SS, flexible billing options and next generation charging

gate#ays are being deployed, #hich #ill result in greater aenues for reenue

lea"age.

The integration challenges #ith respect to technology remain #ith / and ;T as

these next generation systems need to co%exist and interoperate #ith legacy

systems. -ext generation serices come #ith their o#n set of lea"age issues related

to content settlement, adertising reenue settlement, policy enforcement and real

time rating and charging.

Most telecom operators hae migrated to / net#or"s. The data and content

serices of / net#or"s inole complex transactions that go through multiple

platforms before they are deliered to the end customer. The increase in business

model complexity calls for increased focus on / net#or" ris" areas. It is essential

for these operators to understand the reenue lea"age ris"s posed by a / net#or"

#ith the "ey reenue ris" areas being subscriber migration, proisioning, system

integration, customer billing etc. 4omplex product definitions and non%

synchroni7ation of net#or" elements #ill affect the reenue chain if there are

mista"es in configuration. For operators migrating to /, there #ill be technical

challenges and customer data should be properly aligned across systems. +ence,

setting up the right reenue assurance PIs and controls is crucial in a / net#or".

-e# serices are driing a step change in the telecommunications industry. The

serices bring ne# impacts on reenue assurance, #hich legacy reenues being



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slo#ly eroded and replaced #ith ne# data%drien serices. ( ma$ority of surey

respondents beliee that the next generation of telecommunication serices has

already started disrupting existing setups and brings ne# challenges to reenue

assurance. Serices bundling and data and content serices hae already impacted

reenue assurance by opening up ne# areas of lea"age 2e.g. reenue share,

profitability3. In addition, most respondents beliee that mobile money, cloud%based

serices and mobile app stores are expected to bring ne# reenue lea"ages and

fraud threats to telecom operators.

Telco proiders around the #orld are :uic"ly reali7ing that their future surial and

profitability depend on the ability to recogni7e and deploy ne# serice offerings as

:uic"ly as possible. (s many ne# telecommunications serices are inented, offering

these ne# products and serices becomes ital to telcos. The continued reduction in

the aerage reenue per unit 2('PH3 that telcos can potentially reali7e from oice

serices, as #ell as the continued loss of customers to other carriers, means that

telcos need the reenue that ne# offerings li"e / products can proide. The

technical issues surrounding the deliery of / serices to customers are

complicated and they often strain a company*s resources. en after those

serices hae been deployed, many telcos find that it is still ery difficult to

ensure that those / serices are being accurately billed for and collected.

-ext generation serices are changing business models rapidly causing significant

upheaal for '( actiities. '( has to adapt to these challenges by getting inoled

earlier in the product process and #idening the scope of #here '( adds alue. 4ost

reduction, cash improement as #ell as customer metrics become "ey actiities.

Re,enue "ea9a1e (oin%s in /G 7usiness -o#e"

xamination of the / business model and resulting reenue flo#s, indicates that

they the reenue assurance issues in / are far more complex than those for >

net#or"s. This is a short list of reenue lea"age points in / net#or"sG

Lo!a%ion Main Lea9a1e T(e

S#itches Data loss4D' mediation Data corruption9oice call billing 'ating errors

9oice call settlement Statement errors



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9oice roaming Data lossPre%paid calling ! roaming FraudSMS handling Data loss%mail usage billing Data lossFile transfer billing VoS errorsMicro payment billing FraudMicro payment settlement Statement errorsM%commerce settlement Statement errorsMicro payments #hile roaming FraudPush adertising inoicing Statement errors4redit card settlements Transaction repudiation4learing house charges Statement errors9(T collection ! settlement 6er payment

Problem (reas for / 5illing Part of the problem #ith assuring reenues for /billing is that there are so many areas #here lea"age and reenue loss can occur.

These problems can be categori7ed in the follo#ing areasG

5usiness model complexities

Hnit of billing challenges

Transaction trac"ing challenges

5illing calculation challenges

6erall integrity and audit challenges

Business Mo#e" Co-("e+i% Pro7"e-s$

6ne reason telcos can get into billing problems is because of the uni:ue demand of

/ serices, #hich necessitates business model different from the one used for

other Telco serices. In the oice serices #orld, there are only t#o parties inoled

in any transactionG the customer and the telco. The telco deliers serices and bills

the customer for them. That*s easy enough to understand and manage effectiely.

When #e moe into / serices, ho#eer, #e are generally forced to integrate third

parties into the mix. Most telcos do not hae the ability to delier the content serices

2#eather, ne#s, sport, gaming, etc.3 that are the bac"bone of most / offerings.

5ecause of this, the telco must deelop business models and partnerships #ith

endors that clearly defineG

The roles of the content proiders and carrier

+o# the serices #ill be deliered to end users oer the net#or"

+o# the olume and nature of the deliered serices #ill be trac"ed and reported



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+o# the serices #ill be billed 2by #hom and at #hat rate3

Who #ill be responsible for collections and credit ris"

(d$usting telco infrastructure to delier / re:uires more than simply putting serices

into the customers Khands, it also re:uires that #e build up a billing and reenue

assurance infrastructure that captures the information necessary to support the

business model itself.

Uni% o Bi""in1 C'a""en1es$

In the traditional oice #orld, billing computation is multiplying the billing rate by the

duration of the calls. The entire billing system infrastructure is based on capturing

and computing for this simple e:uation and is based on the processing of call detail

records 24D's3.

(s #e moe into the / product range, #e depart from this simple formula. /

billing inoles a #ide range of complicated calculations that are all specific to the

type of deliered product.

Some different billable amounts are based onG

-umber of messages sent or receied 2by time of day or day of #ee"3

-umber of email messages sent or receied 2by the type of message3

Internet access times 2by flat rate or by hour range3

4ontent deliery 2#eather, ne#s, sports3 2by eent3

Music or ideo 2per file or by M53

Personal ideo transmission 2per M53

;ocation based serices 2per file, per customer response, by city3

Pay by mobile 2per transaction or by percent of transaction amount3

The $ob of reenue assurance 2'(3 for / billing is made many, many times more

complicated by including all of these different calculations in the billing process.

Transa!%ion Tra!9in1 C'a""en1es$

To support the ariety of intricate calculations inoled in / actiities, the telco

billing system must identify the sources of information for each ariable and then be

sure that it is captured, for#arded and processed correctly. eeping trac" of oice



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transactions is simple because the s#itching systems in place all #or" to create

accurate 4D's. 5ut "eeping trac" of non%4D' based eents can be significantly

more difficult.

The underlying telco infrastructure is incapable of trac"ing the ma$ority of the /

products. The telco net#or" "no#s that a customer is hoo"ed up to the system, but it

doesn*t "no# #hat that customer is doing. To secure the information about /

billable actiities, telcos must build entirely ne# reenue management chains. For

each serice being deliered, the telco must "no#G

Where the information about the eent #ill be captured

+o# it #ill be stored and for#arded to the billing system

+o# it #ill be processed

+o# the integrity of this chain of eents #ill be assured

For some / serices, the billing system manager can find the information re:uired

#ithin the Intelligent -et#or" 2I-3 system. For most others, the carrier must depend

on the third party serice proider. In all cases, an entirely ne# system #ill hae to

be built to feed the needed information into the billing system.

Bi""in1 Ca"!u"a%ion C'a""en1es$

(fter all the information about / transactions is collected, the billing system #ill

usually need to be modified to perform all of the calculations re:uired. The logic

associated #ith many of these calculations #ill be complicated and full of exceptions

and special cases that ma"e accurate computation difficult.

O,era"" In%e1ri% an# Au#i% C'a""en1es$

(fter management figures out exactly ho# all of this billing should be done, it then

must chec" and double%chec" to ma"e sure that these complex ne# actiities are

#or"ing correctly.

T'e /G RA C'e!9"is% an# A((roa!'

Most telcos are only no# beginning to comprehend and struggle #ith the issues

inoled in assuring their / reenue streams. Many companies hae only recently



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begun to deploy / offerings at a large enough scale to ma"e the assurance of the

reenues an important ob$ectie.

For those carriers $ust starting out, the follo#ing, systematic chec"list approach is

helpful to appraise exactly #hat their / reenue ris" exposure actually is.

Identify each of the / products that #e are currently offering 2and plan on

offering in the near future3.

For each product, clearly define the calculations 2and the different ariations

of calculations3 that #ill be used to bill for the product.

Within the definition of each of these calculations identify different ariables.

6nce the sources of information for each ariable hae been identified, clearly

document the transaction information chain that #ill delier this information

from the source to its final place in the billing system.

9erify that each of the transaction information deliery mechanisms is #or"ing

accurately and that the billing system itself is processing that information as

intended.

5illing for / products can be more challenging to the telco than deliering the

serices themseles. Problems #ith the / business model, ho# charges are

calculated, ho# transaction information is captured and deliered to the billing

system, and ho# the billing sys% tem processes them, all represent areas of

ulnerability. These are the areas #here the reenue assurance group needs to

focus if it expects to increase the reenues and reduce the ris" of reenue loss in the

sales of / serices.

/G$ RA !'a""en1es a'ea#



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Pro#u!% !o-("e+i%ies$

'emote superision system

;ocation based serices

Bi""in1 Co-("e+i%ies$

'ating parameters definition

Hsage measurement methodologies

Varie% o #a%a reuire-en%$

Settlement #ith multiple third parties

Increased '( control points

Se!uri% issues$

Data Interception

Tro$ans, #orms and 9iruses Frauds

:rau#s$ 4opyright Infringement

Micro Payment Frauds

nhancing of business rules to coer incremental scenarios

(utomated tools to capture real time information

Ne8>e!oss%e-$

4ollaboration drien by sharing of infrastructure and serices

It can be expected that the reenue assurance challenges presented by / products

#ill continue in the future. More complex business models and less accurate trac"ing

mechanisms need to be constantly re%engineered into the telco enironment. For the

telcos that master these s"ills :uic"ly, the re#ards #ill be higher reenues and lo#er

expenses. For those that do not, the future #ill hold continued frustration and



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confusion as the number of / serices and their complexities continue to expand

across the telco mar"etplace.



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C'a(%er 5

Con!"usion

'eenue (ssurance has achieed some tremendous successes oer the years, but

it #ill hae to address some "ey challenges in order to fulfil the expectations of

management and shareholders.

Data collection and billing is still the main focus of the 'eenue (ssurance

departments. 4ompanies confronted #ith a saturated mar"et focus more on

customer retention.

'eenue (ssurance functions hence are gradually turning their attention to the end%

to%end reenue alue chain, loo"ing at the business performance and the interactionbet#een the different parts of the chain.

While this shift in focus can indeed be of added alue to the company, 'eenue

(ssurance professionals should be careful not to lose trac" of the 'eenue

(ssurance principles. The continuous monitoring of the basic 'eenue (ssurance

controls must remain a top priority, gien the rapidly changing enironment.

Fe# areas #here care needs to be ta"en are G%

Co,era1e Mo#e"s % Ma

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Revenue assurance in different sectors in telecom

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