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Revenue Assurance Reaching Maturity

By Edward J. Finegold

The overriding signal at the TeleStrategies Revenue Assurance Spring 2006 event, held in Orlando March 8 through 10, was that the revenue assurance market is entering maturity. Market opportunities for growing revenue assurance vendors are ripening at the same time that their products have achieved more automated and sophisticated functions and configurability. It was widely agreed during several conference sessions that North American executives do not yet prioritize revenue assurance at the strategic level as do their European and Asian counterparts. For many European and Asian operators, revenue management has become a strategic pillar receiving C-level attention. North American attitudes are beginning to evolve, however, as operators face eroding prices and realize how much revenue they fail to collect.

Carriers Putting Controls in Place
The scope of what falls under the Revenue Assurance umbrella is broader than its name suggests. Cost management, error management, traffic management, inventory management, mediation, billing, SS7 networks all play a role in the inflow of revenue and the outflow of cash. The overriding concept itself isn’t rocket science, just smart business make sure you bill and collect for everything you’re owed and pay out only what’s accurate. Applying these concepts is extremely difficult due to the range of systems, data sources, internal data inaccuracies, fraudsters and other forces. In spite of these difficulties, most North American carriers are continuing along the path of revenue recovery today, finding the existing holes in their businesses and applying solutions to plug them up.

Not surprisingly, the introduction of content services has caught the eye of the revenue assurance wary, given the impending complexity. Content offerings involve many transactions involving consumers, operators and multiple parties providing content or content services. Speakers from Verizon Wireless and Global Crossing both stressed their companies’ growing emphases on building revenue and cost control and digital rights management into every new content product. For consumer oriented offerings like mobile content, these controls often come after the fact due to the pressure to bring products to market rapidly. Closing the gap between launch and revenue management is becoming increasingly important, especially when many offerings are expected to come and go like fads.

Phantom Traffic and Error Management
The big dollars today, however, are still to be found in inter-carrier voice traffic channels where fraud and operational errors are rampant. Phantom traffic continues to plague carriers who must wage a constant battle to identify errors and abuses before or as soon as they appear. Representatives from several tier one service providers discussed their uses of SS7 data analysis as a means to identify illegal arbitrage; traffic misrouting unintentional and deliberate; incorrect switch routing tables; and misreported data elements that are often stripped or deliberately altered.

One such organization is in revenue recovery mode working towards revenue assurance and on the road to real revenue management. Its focus has been to use SS7 ISUP messages to detect shifts in jurisdictional information. This process identifies changing traffic patterns between or across carriers that may signal arbitrage.

This provider also looks for stripped calling party numbers (CPNs) and other altered records that typically point to nefarious activity. The organization processes over one hundred million SS7 CDRs per day which are referenced against other data to identify discrepancies that require investigation. The biggest problem they face is bad reference data. When inaccurate circuit data is present, pinpointing and stopping phantom traffic is next to impossible the company said. The problem stems from the fact that not enough attention is paid to clean circuit data by the network folks.

A wholesale product manager for one RBOC said his company’s goal is to “recover revenues that are due to us” noting that there were many opportunities to do so. This RBOC is also in revenue recovery mode and just beginning to expand its revenue recovery tactics. The challenge is to prioritize the most costly or valuable opportunities first and to be aware that new schemes are devised on a daily basis, so the process never ends. The product manager stated that his organization also goes through the exercise of processing SS7 CDRs as a way to identify phantom traffic and noted that five to ten percent is identified as phantom traffic, with majority of that intentional. Expert observers in the audience were dubious of these overall numbers, however, suspecting the percentage is more like two percent with a 50/50 split between intentional fraud and human and system error.

Stephen Rickaby, director of revenue assurance products, for Intec Telecom Systems discussed the need for centralized error management in large IT environments, noting that a big part of revenue management is maintaining efficient operations. The cost to manage the process between order to bill must be minimal and not contribute to errors. The problem, he stated, is that systems environments are always changing, so new problems are constantly being introduced. Because this basic issue of change will never go away, implementing error management across operations is growing in importance as environments grow and the pace of change increases. Rickaby argued that most OSS systems don’t handle errors well, and error management must be established for those. Systems that do handle errors well can be left in place, but it makes sense to keep their activities visible to the overall error management process.

Product Outlook
Revenue assurance software products are reaching a stage of maturity where their usability and configurability are polished and their functionality has built to a high level of automation and scalability. The trick with any revenue assurance practice is being able to manage and compare massive numbers of records and identify, investigate and resolve discrepancies. Being able to do the initial analysis in minutes as opposed to days has its obvious advantages. The leading systems vendors seem to be meeting scalability requirements, but these will be pushed continuously as projects become larger.

The challenge in revenue assurance is that there are so many areas an “analyze, compare and identify” kind of system can be applied that the applications themselves end up covering a lot of territory. As a result, it’s very important that the same application can be easily tailored for a user that handles any part of any process that touches the system. The latest vendor releases appear to have achieved this level of configurability within the drag-and-drop GUI without requiring coding or scripting in the background.

Revenue assurance applications are also achieving a high level of automation which can both increase the speed with which problems are identified and resolved and take much of the analytical burden off of the user. Problems can be solved faster, for example, by automating database updates, though many carriers still choose to have someone review all updates before allowing them. From a user perspective, the step from identification of a problem to handling of a problem is seamless as the systems typically identify the type of problem at hand and automatically kick off the correct next steps for the user to follow. Previous generation applications required a higher level of user expertise to recognize discrepancies in the data presented on screen, which in turn extended training time and decreased the value of the application.

Vendor Updates
Of the product companies exhibiting, Lavastorm recently acquired by Martin Dawes Systems announced a significant agreement with Australia’s Telstra for most of its BRAIN analytic platform. This agreement signals Lavastorm’s expanded scope and global reach and presence as a result of the Martin Dawes acquisition.

Azure introduced Certo 2, the latest and most advanced version of its flagship revenue assurance product. The new version is completely GUI-configurable and can perform a range of identification and resolution processes in a completely automated state. Though not yet announced, the release of Certo 2 is driving record sales for the company within the past two months.

Vertek introduced a managed service approach to revenue assurance, offering a turn-key solution that includes process and data management and web-based access to a fully capable revenue management and analysis suite. Vertek’s background derives from engineering the guts of major carrier operations, giving the company a strong understanding of their end-to-end processes and vulnerabilities. As a managed service, Vertek sees opportunity with Tier 2 and 3 carriers as well as Tier 1 carrier groups that are looking for a rapid solution.

Vibrant Solutions stressed carriers’ interest in analytical capabilities to better examine customer segments, product uptake, profit and loss on specific products, and relationships among services that can be exploited to drive sales. Content offerings are driving operators to think harder about driving service uptake, weeding out services that are neither profitable nor traffic generating, and using concepts like loss-leaders that are common in retail businesses and this is where Vibrant is seeing growth beyond its traditional cost management business.

For more information on Revenue Assurance and the upcoming TeleStrategies Revenue Assurance Fall 2006 event, please visit www.billingworld.com and www.Telestrategies.com..

Azure Provides Inter-Party Billing For BT
Azure Solutions announced that BT Global Services has implemented an inter-party billing solution, based on Azure Interconnect version 9.0, for billing on its BT Switchless Reseller Service. The service is available to BT Global Services customers in Germany, Belgium, Netherlands, Ireland and Spain. The inter-party billing solution will enable BT Global Services to invoice resellers at wholesale rates for subscriber access, network access and services. CDRs are then passed onto individual resellers enabling them to retail bill their own subscribers. The initial implementation is already live in Germany and the remaining countries will follow shortly.

Intec wins contract with Russia's VimpelCom
Intec will deliver its Intec Trading and Routing Solution to VimpelCom. The solution enables optimized capacity trading and traffic routing for its wholesale voice business. The trading product will give VimpelCom a single system for controlling all data associated with the routing of international traffic. The deal further extends Intec's relationship with VimpelCom, following a multi-million dollar agreement for core components of Intec's BSS/OSS technology and its long term use of Intec’s InterconnecT settlement platform. VimpelCom has in excess of 40 million subscribers across Russia.

Colombia Telecomunicaciones ESP Selects Comverse
Colombia Telecomunicaciones ESP, a wireline telecommunication service provider serving over 2.5 million subscribers, has selected Comverse’s Kenan FX billing and mediation solution. The solution will replace its legacy systems and support the company’s objectives to upgrade to IP-based networks and enable a unified view of the customer.

Swisscom Mobile Selects Sun Microsystems for Customer Service
Swisscom Mobile has selected Sun Microsystems to help reduce IT complexity and costs by streamlining access for 1,145 retail stores to the company’s customer-oriented applications. The Sun Java Identity Management Suite will provide standardized customer care, maximizing the effectiveness of the existing distribution and retail channels to better engage customers and thus increase revenue from new voice and data services. The product’s user authentication and single sign-on capabilities are helping reduce the complexity of Swisscom Mobile’s IT infrastructure and will enable the retail stores to connect rapidly to the company’s CRM and POS applications. Swisscom Mobile currently holds 65 percent of the market share in the Swiss mobile communications sector.

Opal Telecom deploys bill management from Ryder Systems
Ryder Systems has been awarded a contract by Opal Telecom, the business-to-business telecom division of The Carphone Warehouse, to supply an end-to-end bill management solution. The service will manage all elements of the billing process, including bill design and production, via print and email with management reports, plus a comprehensive online bill analysis and reporting solution. Opal’s new billing solution is aimed at corporate and SME customers and will be instrumental in building loyalty and reducing customer churn.

Convergys Goes Live With Mobile 365
Convergys announced its Infinys Rating and Billing software is operational at Mobile 365, which delivers and provides settlement of mobile messaging and data services including SMS, MMS, and WAP. Mobile 365 delivers two billion messages per month with reach to over 500 operators around the world. Mobile 365 selected the Convergys solution because of its ability to handle multi-party and content settlement and for its onsite professional services for implementation and support in Singapore.

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