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Revenue Assurance, figures show improvement, but is still a persistent problem

The latest Revenue Assurance report published by the Risk Assurance Group (RAG) shows that losses from leakage and errors have either gone down or stabilized since the previous report in 2020. But as seen in the charts below, revenue loss is still a fundamental problem and a persistent headache for telecom operators around the world with significant financial losses.

In the comprehensive report that covers both fraud, security and revenue assurance, telecom service providers have fed back their estimated financial losses from operational areas within their own businesses.

In 2020 Rating and Tariff Issues within telecom service providers was estimated to hemorrhage $6.3bn per annum, in 2021 that has fallen to just over $5bn. An approximate 20% decrease in financial losses from the previous year.

Table 1

Billing and Collection Issues have reduced from just over $7bn in 2020 to just under $5bn in 2021, a 30% reduction from the previous year.

Products and Services with Negative Margins within a telecom operators’ offerings was very similar to 2020 figures with $3.4Bn being estimated to be lost in 2021  versus $3.05bn in 2020. (10% difference)

Table 2

2021 Risk & Assurance Report

Out of the estimated $42.59 billion lost in the revenue assurance sphere of operations within telecoms providers in 2021 – these three aspects represent $12.91bn, just over 30% of the total revenue losses.  Compared to 2020 where this was an approximately 33% or $16.67 billion of the total $49.71 billion estimated lost.

What do these figures say about the risk management function within telecommunications? 

Overall, the outcome between both surveys are broadly similar, with the top 5 assurance aspects not significantly changing

Table 3

One of the interesting movements in rankings across the survey was Reference Data Assurance which was elevated by 8 places, from 17th to 9th place.  At Symmetry Solutions we see this area of assurance as fundamental to succeeding in understanding, managing and controlling business assurance initiatives.  Without reference data being assured across the business operations, we see many of the other assurance areas like charging, rating, billing, tariff, etc. being challenging to accurately measure and manage.

Individually these results are positive and we are not seeing year on year growth in losses and this could possibly demonstrate that business assurance teams have got a handle on revenue losses and are managing to push/hold the losses to a desired level and are understanding the need to comprehensively cover all business areas. 

But however you assess statistics from such surveys and when and how they were undertaken and why respondents fed back, the financial figures garnered from this survey are not insignificant and represent a substantial percentage of telecom service providers potential revenue and profits.

What we should also keep in mind is a number of factors that may influence the results including:

  1. One would expect such surveys to report conservative predictions and estimates on financial losses due to the natural human nature and self-preservation of the respondents.
  2. In the last two years many businesses have had to cope with remote working, distributed teams and personnel, sickness and furlough. Increased threats from opportunist scams and a new working environment playing a influential part on how businesses and risk teams in particular could proactively look to identify and plug leakages, which could mean not all leakages have been fully recognized and measured.

The results therefore are likely to be underestimated with significantly more monies being lost to business/revenue assurance challenges. 

Ignoring the other factors that may influence results, what we can see is that there is change and possibly for the positive, hopefully when the survey is undertaken again later this year, we can determine if this is a downward trend that will continue.  But we certainly cannot be complacent in the meantime, these losses need to be constantly understood and recognized within the business and managed correctly.

What can we do to reduce these leakages and losses moving forward?

Well, there is no silver bullet or some amazing piece of new technology that can eradicate revenue loss. But there is an array of technologies, processes, procedures, policies, reviews, monitoring, audits, service approaches that in combination can look to mitigate, manage, control and provide visibility to such risks.

Of course, all of the above take time, they take resource and they cost money.

But as the saying goes – no pain no gain… an investment in time, resource and technology can make a significant dent on these revenue threats.

That investment maybe in a discovery workshop, training of staff, an audit of services and products.  The easiest and risk free is to undertake a review of your business operations with a trusted third party with experience of these issues to provide insight and transparency to possible revenue loss issues that can be plugged and managed.

Symmetry Solutions provide consultancy, support, training and solutions focused on revenue/business assurance, customer experience and data insights.

The 2021 Digital Trust Survey of Revenue Assurance, Fraud Management and Cyber Security Professionals Working for Communications Providers can be found at https://riskandassurancegroup.org/rag-rafmcs-survey-2021/