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March 30, 2012

Mobile industry loses over $58bn revenue in 2011 due to inefficient billing systems: Report

The scale of losses could rise five-fold by 2016 if remedial measures are not taken, says Juniper Research

By CBR Staff Writer

The mobile telecoms industry lost more than $58bn last year, or over 6% of global revenues, due to inadequate FM (Fraud Management) and RA (Revenue Assurance) processes, according to Juniper Research’s latest report ‘Mobile Revenue Assurance & Fraud Management: Business Strategies & Forecasts 2012-2016.’

According to the report, the scale of losses could rise five-fold by 2016 under a ‘nightmare scenario,’ if operators do not address the problem with any remedial measures.

As operators have been obliged to both integrate an ever-expanding array of devices and manage a spike in cellular network traffic, billing systems have not kept up with the pace, says the report.

This is making them unable to capture the large volume of transactions that occur on the network precisely or seamlessly.

This has increased the scale of loss in revenue, resulting in bad debts and opening up more opportunities for fraud.

In the light of this, the report recommends that by implementing automated system solutions that provide end-to-end visibility of the revenue chain, operators can minimise the outflows resulting from next-generation connectivity.

Sustained investment in such an initiative will decline the leakage to 4% of revenue in 2016, reducing losses by $15 billion per annum compared with 2011.

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Report co-author Windsor Holden said 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.

"Despite their initial costs, RA and FM systems demonstrate a strong case for return on investment," says Holden.

According to the report, developing regions of Africa & the Middle East will see relatively higher revenue leakages.

It also points out that solutions are exploiting a single repository of data to reduce TCO (Total Cost of Ownership) and are integrating a number of complementary applications as the industry moves towards Business Assurance.

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