Telecom operators losing money poor systems, fraud

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Mumbai Oct 28 (UNI) Telecom operators are losing more money as compared to other service providers, primarily due to poor systems integration and frauds, according to a survey conducted by Subex Azure, an OSS solutions company, that covered almost 100 operators around the world.

The average revenue leakage among global telecom operators increased to 13.6 per cent of revenue, from the 12.1 per cent in 2006.

According to the survey results, average fraud losses have grown from 2.9 per cent of revenue last year to 4.5 per cent this year.

Interestingly, mobile operators lost the most, as compared to other service providers, at nearly 14 per cent, with mid-sized operators, having between 100,000 and 1 million subscribers, raking up the most losses at more than 18 per cent. However, very large mobile operators are losing only six per cent of revenue per year.

Indian operators can draw their own lessons from the survey, which has also covered economies similar to that of India. For instance, operators in the Middle East and Africa region had more than 20 per cent losses. Asia was not very far with just below 20 per cent revenue leakage, and Central and Latin American operators were at a little more than 15 per cent. Not surprisingly, Western Europe ranked lowest in losses at about seven per cent , followed by Central and Eastern Europe at eight per cent. North America, where the pattern should not be very different from Europe, was way ahead with an average of 13 per cent leakage.

This will surely sound like music to many ears in India, especially those who favour outsourcing. As per the survey, telecom operators, who use third-party specialists for revenue assurance lose 30 per cent less compared to those who use no external help.

However the survey finds that the level of revenue loss that operators find 'acceptable' has risen this year to 1.8 per cent, from 1.1 per cent in 2006.

In fact, the survey reveals that revenue management challenges posed by NGN technology and applications was a key concern among almost all operators.

What does all this mean for the operators in India? Clearly all of them are in ultra-high growth mode, battling a range of simultaneous challenges. They have to add more subscribers, rollout networks in newer and far flung areas, keep announcing new services and schemes, struggle for spectrum, get in more alliances and partners, and fight dog-eat-dog competition.

UNI

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