In order to sustain and increase profit margins, there are two universally popular approaches: boosting revenues through the provision of new products or aggressive sales, or reducing costs through technological advancements and improved efficiency. Even before the current financial crisis, the telecom industry had been undergoing a massive overhaul due to the need for new, more attractive and value-added products to prop up ­falling ARPUs. To support a more complex yet flexible product structure, operators have been investing in Next Generation Networks, IP-based products, and Next Generation billing. The combination of market saturation, declining growth in revenues from voice products, and unstable financial conditions has left few options open to the industry. The clear focus now is on improving the efficiency of operations. The biggest investments during this period are being made to optimize production ­operations. However, despite such efforts, the cost reductions being achieved still don’t compensate for the dramatic fall in revenues seen over the last few years.

The need for Revenue Assurance

This is where Revenue Assurance comes in. A study of around 100 global telecom operators carried out by Analysys Research UK in 2007 explains the plight of the whole industry. The total revenues from the global industry in 2007 were estimated at around $1.6 trillion. Out of these revenues, an estimated $218 billion were not realized. The trend over previous years is even more alarming; the lost revenue has risen from 11.6% in 2005 to 13.6% in 2007. In addition, when these losses are broken down into geographic regions they can be as high as 20% in some cases, such as in organizations in the Middle East and in Africa.

By deploying efficient strategies and methods to realize Revenue Assurance in their organizations, telecom companies can hence ensure that revenue leakages are rectified and prevented, and that their losses are reduced significantly.