Revenueassurance101 150709111645 Lva1 App6891

Telecom Revenue assurance 101
Ikwe Gideon
gideon.ikwe@datahouseconsulting.com
www.datahouseconsulting.com
Datahouse Consulting
Agenda
1
What is revenue assurance?
How to assure revenue?
Sources , Type and Statistics of Revenue Leakages
Revenue Assurance KPI and Tools
Who will assure revenue?
Key factor to consider
Why is Revenue Assurance Required?
Effects of worsening market conditions

Effects of investor pressure:
Downgrading of debts
Difficulty in raising capital for new projects
Impact of billing errors on customers and trading partners
The Nature of service render( Service is generated immediately customer place an order for call,
implies quality control must be embedded into all element of the process )
The use of multi-systems from various vendor
Importance of usage data integrity
Complexity of the Billing process
Increasing Government regulation
Stiff Competitive Environment
What is Revenue Assurance?
The process of measuring achieved revenue against forecasts, and accounting for any discrepancies
The Art of finding what you didnt know was missing
The verification of the amount being billed
Protecting and optimising revenues and profits
Everything involved in ensuring that the maximum amount of revenue comes into the organisation, and
that all leakage in the system is rectified
Any activity an organization does to ensure that processes, practices and procedures result in revenue that
is billed completely, accurately and in a timely manner
Revenue Assurance as a discipline within a telecommunications operator is necessary because of one
apparently basic Laws of the universe.
Which is a corollary to Murphys Law, states that: If something can go wrong, it will, and at the most
inconvenient moment. This is why tomato soup always splashes onto ones only clean shirt just before an
important meeting, or the car breaks down on a lonely road when the cell phones battery has just gone
flat.
Revenue Assurance cannot revoke these Natural Laws, but it can and does mitigate their malign effects.
Revenue Assurance Processes: an holistic approach

Correct Rates
Profitable product offerings
Appropriate revenue assurance
Controls in place for new offer
Product
& Offer
Management
Dealer commissions
Interconnection setup
Routing
Contentprovider
Order
Management &
Provisioning
Partner
management
Customer
management
Contract compliance
Variation Orders
Carecred its
Churn management
Completeness &
existence of postings
Revenue recognition
Credit assessment
Timely activation
Provisioning
Link to tariff plan,
Services and discounts
Network
Management
& usage
Revenue Assurance
Finance
&
Accounting
Rating
&
Billing
Receivables
management
xDR leakage
Inaccurate xDRs
High usage
Reference data
management
Unbillable xDRs
Billing cycle calculation&
generation of bill
Payment follow-up
Dunning
Bad debt management
Dispute resolution
In an ideal world, Revenue

Assurance encompasses
every step in the revenue
process, all the way from the
transaction to the accounting
ledger. It integrates the
Revenue Assurance process
within the overall enterprise
risk management of the
company. It covers all
revenue-related risks ranging
from revenue leakage through
to revenue recognition in the
financial statements. And it
manages people, processes,
and technology in an
integrated way to ensure
maximum revenues and
minimum costs.
5
Revenue Assurance Framework

Revenue Exposure
Revenue Leakage
Revenue Enhancement
Cost Saving
Preventive
Detective
Top-line
Bottom-line
Technology
Process
People
Placement and empowerment
in organization
Prioritized focus,
scope and frequency
Periodic reviews and
continuous monitoring
Quantification
GOVERNANCE
Enablers
REVENUE RISK ASSESSMENT
EVENT INDENTIFICATION
IMPACT ANALYSIS
Plugging of revenue losses and

process/control/system lapses
RECOVERY AND SUSTENANCE
Timely reporting and escalation
COMMUNICATION AND REPORTING
Methodology
Tools and analytics

Operationalization
Skill set
6
The RA Process
RA COVERAGE
Scope of Revenue Assurance whats in & whats out?

Operational
support
Cost
management
Risk
management
Controls
environment
EXTENDED REVENUE
ASSURANCE
Core Revenue Assurance
Objective
Strategy
formulation
Minimize revenue
leakage
Regulation
Revenue
management
reporting
Revenue Assurance Core Activities
Subscription Assurance
Usage Assurance
Rating Assurance
Mediation Assurance
Billing-Postpaid Assurance
Prepaid Assurance
Interconnect Assurance
Roaming Assurance
Business insight and Intelligence
Thirty party service Cost Assurance
10
Revenue Assurance Basics

Conveyance
Capture
Calculation
Collecti
on
As RA develops other areas of leakage are

identified throughout the metering and billing
process. Using a mix of data Analysis and
process improvement techniques RA is able to
move through the levels of maturity by striving
for continual improvement.
Monitoring and Reporting

Detect
Correct
Revenue Assurance focuses on each of these

areas in order to detect the leakage, correct or
fix the issue and then ensure that changes are
made to prevent that same issue from occurring
in future.
Ensure
The core principle for processing of data for metering

and billing follow four logical steps:
Capture recording the supply that is made
Conveyance the transmission of data from the
point of recording the supply to the point of
presentation to the customer
Calculation the calculation of the charge due for
the supply made
Collection the collection of the charge due from the
consumers of the service
Data Analysis is focused upon a known

leakage and offers quantitative results that the
team can monitor over time. At this point the
process improvement team are used to identify
the root cause.
Process Improvement considers the end to

end process. Through this end to end
understanding of the hand offs between
processes potential revenue leakages are
identified through risk analysis techniques.
These areas are then handed over to the data
analysis team to gather quantifiable results
11
Agenda
1
12
How to Assure Revenue
Identify key attributes of every service that is on operation that can affect revenue.
Identify the affected data sources associated with the key attributes (such as switches,
mediation components, roaming clearinghouses and interconnect operators).
Map the data sources to the information model.
Identify the data flows across the data sources, identify the location of the data sources
and to where the data is being send from each of these data sources.
Define controls to ensure the integrity of data related to revenue, across all data flows.
Define thresholds for loss at each point. This should be derived from the target threshold
on an end to end reconciliation, thresholds such as rejection tolerance and time to receive
CDRs.
Devise a mechanism to cross check with the first point to the last point in the data flow
(switch to billing system).
13
Fundamental
RA Strategies
Questions RA
Ask
How much usage is recorded

by your network?
Is all usage being billed?
Are all customers on the correct
tariff?
Are all tariffs been
implemented correctly?
Any unauthorized usage taking
place?
Do you know who is using
your network?
Are traffic and charges with
partners correct?
Is traffic being routed most cost
effectively?
Are you getting best prices
from your third party services?
Are your products profitable?
Identify products and services

Establish how services can be
used
Understand network
implementation
How and where usage data is
generated
Which end systems require
what information
Determine usage data flows
Determine accuracy of end-toend billing chain
Independent analysis of raw
usage data
Data reconciliation with
billing statistics
Identify discrepancies
Derive revenue impact
Build business case
Basic
Reconciliation
Approach
Network usage with billing

accounts database
Network usage with retail
billing statistics
Network usage data with
interconnect settlement
Network roaming network
usage with TAP-out/in
TAP-in with billing statistics
Orders database with HLR and
billing
Switch statistics with network
usage data
Signalling information with
network usage data
Trend analysis
14
Agenda
1
15
Sources of Revenue Leakage?
16
Product and offer management, Sales Order management and

provisioning Risk
Lack of revenue assurance

checks/testing prior to new
product/service launch
Non adherence to change
management process
Product and services not
designed to address all
known and potential fraud
risks and revenue leakage
risks
Lack of post launch
assessments and reviews to
assess the impact of new
products and services
Tariffs communicated to the
customers through
brochures, marketing
campaigns or through
websites different from the
billing system
promotion schemes
design/implementation issues may
lead to dealer commission fraud,
subscription fraud and high
acquisition cost
Zero minutes of usage subscribers
in the network indicating dubious
connections
First bill defaulters indicating
subscription frauds
False promises by the sales team
leading to customer dissatisfaction
resulting in disputes
Allocation of subsidized plans to
subscribers not entitled to same
Inactive recharge vouchers (RCV)
floating in the market
High quantity of active stock lying
at warehouse of recharge vouchers
Lack of related number process at
the time of sales (subscribers with
bad-debt / fraud history re-entering
the system
Subscribers provisioned in the billing

system improperly provisioned in the
network elements
Calls, SMS and other services (other
than content billing) allowed to
subscribers after termination date of
the subscriber in the billing system
Customer provisioned on Postpaid
billing but not on HLR and vice versa
Customer provisioned (configured)
on HLR but not on IN and vice versa
IN (Camel) parameters not assigned
for each MSISDN number on the
switch
Subscribers with inadequate balance
in the IN allowed to make a call or
send SMS
Customer profile in HLR does not
match with profile configured on IN
and Postpaid system (e.g. customer
has opted for GPRS, same does not
reflect on HLR)
Subscribers given access to premium
services against the business rules e.g.
international roaming, international
access
Incorrect bill plan allocation
17
Network management and usage Risk

CDRs may not be generated for all
billable calls, SMS and other services
Parameter on the switch for maximum
duration for calls and other services
allowed in the IN Platform / GGSN and
the Switch may not be in line with policies
of the company
Switch may not be sending/skipping the
signal to the IN (SCP/STP) which is
required to ascertain whether the
subscriber has adequate balance
IN may be incorrectly computing the
maximum available call time
Switch not disconnecting the call after the
call time is equal to the maximum allowed
time intimated by the IN Platform for each
call
Signaling of call related information by
the IN to the Switch and vice versa when
the call is commenced and ended may be
incorrect or not proper
Incomplete capture of call details
Incorrect configuration of destination and
short codes
Incorrect B-Table configuration
Not all Billable CDRs are generated by the

switch
Not all CDRs are transmitted from switch to
mediation
Delay or no transmission of TT files between
switch to mediation
No transmission of TT files between switch
to mediation
No site level redundancy for critical network
elements
High Network downtime of network
elements like MSC, SCP, STP, BSC etc.
High network downtime of billing systems
like SDP
Baseline configurations for the switch and
other critical network elements are not
formally defined
Inadequate controls over users for switch
management (e.g. user accounts of former
employees still active)
Inadequate storage capacity of switch and
mediation devices which may lead to loss of
CDRs
Sub optimal call routing

OSS traffic may not be encrypted, hence
confidentiality and integrity may be
compromised
IMSI information may not be encrypted
Network administrators may not monitor
the OSS network logs for any unauthorized
activity.
Clocks not synchronized across switches
and other network elements
(IN/SGSN/SMSC)
Duration mismatches in switch and IN/
Billing system time
Millisecond calls not rounded up
B-Party answered calls with zero duration
may not be charged
18
Rating and billing Risk

CDRs for all calls, SMS and other
services before the cut-off date may not be
received in Mediation device from the
switch.
Billable postpaid mobile CDRs may be
skipped during processing through the
mediation filter
Billable CDRs may be skipped during
processing through the Data capture filter
in the billing system.
Duplicate CDRs may be billed to
subscribers
Price plans being maintained in the billing
system may be incorrect
All destinations may not be maintained in
the billing system
Price plans in the Billing system may not
authorized/approved
All billable calls may not be rated
Subscribers may not be assigned to the
correct price plan
Rating algorithm may incorrectly compute
charges for each call, SMS and other
services
Roaming subscriber not being charged for
the roaming calls
Revenue for content services maybe

incorrectly computed and deducted from the
subscribers balance
Customers may be invoiced beyond the
legally billable limit
Services, subscriptions, other charges and
adjustments including discounts for the
invoice period may be incorrectly extracted
for invoicing (including content billing)
All billable subscribers may not be invoiced
All invoices may not be received by the final
customer
Revenue, accounts receivable and accrued
income in the accounting system may not
reflect in the billing reports
Revenue for the period may not be accrued
based on actual usage during the reporting
period
All unprocessed CDRs are not corrected and
reprocessed in a timely manner
Calls not being charged as per the tariff plan
local on net, local off net, international
calls, etc.
Customer not being invoiced for the
chargeable calls
Adjustments to customers may not be
authorized
Bonus adjustments and credits incorrectly
calculated
Prepaid trigger to restrict at defined

thresholds working inappropriately
Balance updated on recharge more/less than
the voucher value
Balance transferred by subscriber is not
equal to balance received by destination
Peer to peer transaction allowed when
source and destination are same which may
result in increase of balance of source
MSISDN
Round up error of duration recorded at
switch and IN (e.g. actual duration of call
recorded at switch may be 5 seconds, but
that recorded at IN may be 4 seconds)
Peak time calls being charged at non-peak
time rates
Call charge exceeds the subscriber balance
and the same does not reflect as a negative
balance
On net calls being charged off net rates and
vice versa
Incorrect setting for concessional
/discounted billing schemes
No real time rating of SMS CDRs causing
negative balances
No reconciliation between MoU as per the
switch and billing system
Whether you have adequate control over
exchanged test SIMs, TAP-In and TAP-Out
files
Collection , adjustments, Finance and accounting Risk

Subscribers whose services have been
barred due to crossed credit limit are
allowed by customer care to continue
services without paying bills
More CUG/FnF numbers are added for
subscribers from the back end by
customer care
No timely action on the inconsistencies in
the number of subscribers per the billing
system and switch
Inaccurate reconciliation of MoU between
the switch and the billing system
High usage customers not being
monitored
High usage roaming customers not being
monitored
Uncommon trend in calling pattern of a
subscriber not generating an alarm
Calls to barred/disputed countries not
being monitored
Infrequent monitoring of credit limits
assigned to subscribers
Credit limit to a subscriber is higher/lower
than the policy defined
Documentary proof for calculation of credit

limits not in order
Customer not barred on reaching stipulated
credit limit
Non monitoring of customers failing to make
the bill payment
No follow ups for defaulted customers (e.g.
no reminder Sms, no outbound calling, etc...)
Adjustment/waiver passed more than the
stipulated limit
Adjustment/waiver type passed not as per the
policy
High outstanding of interconnect operators
(e.g. an invoice has not been paid by an
interconnect partner for more than 180 days)
Recharge by a customer not reflected in his
balance
Adjustment/waiver type passed not as per the
policy
High outstanding of interconnect operators
(e.g. an invoice has not been paid by an
interconnect partner for more than 180 days)
Recharge by a customer not reflected in his
balance
Usage incorrectly captured in the revenue

report
Component balances for prepaid accounts
erroneously calculated
Deferred revenue balance incorrectly
calculated
Roaming revenue inaccurately calculated
Interconnect expense and revenue not
captured correctly
No allowance or wrong provision for bad
debts
Examples of Potential Causes of Leakage

Likely Network Problems
Missing A numbers
Missing records & Clock drift
Failure to track customer

activities properly
Inaccurate recording of call

duration
Itemised billing not activated
Routing prefixes
Unexpected records
Switch restarts
Communication failures
Non optimal routing
Likely Billing Problems
Maximum call duration
Poor Suspense Management & Late

Billing
Billing the wrong element(volume

rather than duration)
Multiple billing for the same call
Long duration calls discarded
Network terminated calls discarded
Incorrect tariff applied
Tariff not implemented correctly
Customers not linked to billing

accounts
Likely Mediation Problems
Failure to filter records correctly
Failure to balance batches
Failure to clear suspense
Incorrect application of customer

identifiers
Incorrect formating of CDrs
Dropped records
Duplicate Records
Removal of billable records

Mis-identification of call type
Out of date reference tables
Likely Collection/Dunning Problems
Failure to track old account
Misapplication of credit
Inefficient dunning practices &

policies
Failure to feed back dunning

lessons to marketing, sales and
product planning
Credit policy management
Errors on transfer from billing to

A/R.GL
Likely Sales and Marketing Problem
Over promising, too many special

request
Pricing below target Margin,

excessive discount
Poor product specification-cannot

bill products/Poor contracts
Sales to cash process breakdown
Abuse of shortcut or fast track

processes
Contract terms not passed correctly

to billing
Incorrect notification of billing start
Likely Product development Problems
Failure to plan for rate-plan update

to billing
Failure to build transaction

collection mechanism into the start
phase of product rollout
Failure to include the cost of

billing into the estimate of cost of
product introduction
21
Ranking of Sources of Revenue Leakage

Revenue leakage occurs mainly
around the core Revenue Assurance
processes.
Lack of process control and procedures

Data loss between systems
New products/services
The survey conducted by the leading

consulting firm where respondents (64
operators world wide) key concerns in
this context remain the absence of
adequate controls and procedures and
the loss of data in the revenue cycle.
Data loss between systems and the
implementation of new products and
services are also important sources of
leakage.
Rating errors
Tariff changes
System failure
Fraud (all types)
Routing and reference data errors
Issue with XDR integrity
Low
Medium
Source: Global revenue assurance survey by Ernst & Young, 2009
22
Percentage Loss of Revenue Leakage

Telecom operators are confronted with massive data sets and data flows that support their
billing processes. As these billing processes are typically highly automated processes
supported by multiple and complex systems, loss of data integrity during transfers and
processing can occur and lead to unreliable data flows.
Numbers are illustrative
Potential Revenue Opportunity
104%
All Attempted
Events
4%
Cash Flow
100%
Opportunity
losses
Billable
Events
4%
Services not
billed or misbilled
1%
95%
Correct
Charge
Adjustment
Billed
Revenue
Uncollectible Expenses
1%
Allowance
Adjustments
(Disputes)
3%
Write-offs
(Bad debt)
1%
90%
Fraud
Collectible
Revenue
Typically gap: 2%-15%

23
Leakage Estimated, Identified and Recovered

% of respondents with revenue and fraud leakage greater than 1%
% of fraud leakage
% of revenue leakage
17%
17%
Europ and America
30%
ASPAC
58%
18%
Africa and Middle East
0%
10%
20%
61%
30%
40%
50%
60%
70%
% of respondents with no information on leakage estimation
Europ and America
% of fraud leakages
% of revenue leakages
37%
5%
41%
ASPAC
29%
23%
18%
Revenue leakage (including fraud-related)

across the revenue chain remains a
challenge for operators. While operators in
developing markets face a wide range of
issues including the upfront challenge of high
revenue leakages, operators in developed
markets are faced with insufficient data to
accurately identify and recover most of the
estimated leakages.
The survey conducted by the leading
consulting firm where respondents were
asked about estimated revenue leakage in
their operations, 54 percent of RA Heads
indicated that revenue leakage was greater
than 1 percent of total revenue (excluding
fraud), and 15 percent indicated revenue
leakage of greater than 3 percent. Some
respondents in Africa acknowledged revenue
leakage greater than 10 percent.
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Source: Global revenue assurance survey by KPMG, 2009
24
Leakage Estimated, Identified and Recovered (contd)

Regional breakdown of revenue leakage identified
100%
90%
80%
44%
50%
81%
70%
60%
50%
40%
30%
20%
10%
0%
28%
10%
10%
30%
0%
28%
19%
0%

% Greater than 50%
Europe and America
ASPAC
25-50%
10-25%
Less than 10%
Regional breakdown of revenue leakage identified

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
63%
35%
55%
12%
23%
24%
0%
23%
29%
5%
5%
26%
0%
% Greater than 50%
ASPAC
25-50%
Europe and America

10-25%
Source: Global revenue assurance survey by KPMG, 2009
Less than 1
Forty percent of respondents estimated

that less than half of the total leakage is
identified by the RA function.
Sixty percent of respondents estimated
that less than half of identified leakage is
recovered from subscriber or partner
billing.
More than one-quarter of respondents
did not have information to estimate the
percentage of actual leakages identified.
Leakage identification seemed a bigger
challenge in developing markets where
large numbers of respondents from Africa,
the Middle East, and the Asia-Pacific
region indicated identification of less than
10 percent of estimated leakages. But
while identification of leakages is a hurdle
for a handful of operators, recovery of
leakages is a challenge across all
regions.
25
Revenue Leakage - Conclusion
For the majority of operators, recovery of leakages ranged from 2.5 percent up to 37.5
percent of the total estimated revenue leakage. This indicates that a large portion of revenue
leakage remains un-recovered. Although revenue leakage worldwide was generally 1-3
percent of revenues, the quantum of this loss even at this miniscule percentage is significant.
It is imperative for operators to assess the complete life cycle of capturing leakage data,
identifying the leakages and recovering them. Timeliness is also critical since leakages
recovered over an extended period of time are less likely to realize the potential value. As the
time between the leakage and recovery increases, the probability and size of the recovery
may decline.
1% revenue leakage over one billion of revenue is still 10 million.
26
Agenda
1
27
Average Balanced Mix of KPIs Utilized

Data Quality
Measuring the validity,
accuracy and coherency
within the operational
systems and databases,
eg., misaligned
customer records/total
customer records
Revenue Leakage
27%
57%
Measuring the
implication of revenue
leakage on the bottom
line, eg., recovered and
billed records/total billed
records
RA
KPIs
Process and Control
Efficiency and
Effectiveness
Measuring the efficiency
and effectiveness (result
oriented) of individual
controls, eg., value of
cases from control
X/total RA cases value
RA Management
10%
6%
Measuring the efficiency

and effectiveness (result
oriented) of RA
organization and RA
practices, eg., solved
RA incidents/total RA
incidents
It is good practice to have a wellbalanced set of KPIs covering four

aspects:
revenue leakage
data quality
Revenue Assurance
management
control efficiency and
effectiveness.
Most operators cite Revenue

Assurance KPIs around revenue
leakage.
Data quality KPIs are also used by
many operators (27% of KPIs
monitored). But KPIs around
Revenue Assurance management
(6% of KPIs monitored) and
process and control efficiency and
effectiveness (10% of KPIs
monitored) are not widely used.
28
Revenue Assurances Performance is Measured

Mainly via Revenue Leakage KPIs
Measurement via KPIs is common practice:
Almost all participants use KPIs.
KPIs monitored by the RA function

%100
90
80
70
60
50
40
30
20
10
0
Revenue Loss
Reported Value
XDRs Written Off
Billing Errors
Rating Errors
XDRs in Suspense
and Errors
Indications in place measuring Revenue Assurance

effectiveness
% 90
80
70
With a focus on all kind of data records

(xDRs) leakage, rating, and billing errors:
The number one KPI is total revenue
leakage.
Rating and billing errors are closely
followed up.
Quantity of xDRs recovered or recycled is
also used.
However, only 13% of respondents
mention average
revenue
per user
(ARPU) as a KPI in the Revenue
Assurance context.
60
Balanced scorecard and benchmarking are

not widely used:
Only 21% use a balanced scorecard.
Benchmarking is not widespread, due to a
lack of relevant benchmarks.
50
40
30
20
10
0
KPIs
Audits (Internal)
Audits
(External)
Bench-marking
Balanced
Scorecard
Others
Not Formally
Measuring
29
The Average Leakage Reduction Target is 1%

Level of accepted revenue leakage
Operators targets vary by geographical
area, but are commonly about 1%:
Middle East
North America
Asia
The leakage acceptance spectrum is wide

operators in Central and Latin America
tolerate leakage of only 0.51%, while those in
the Middle East accept an average of 1.75%
based on our respondents.
Average
South-East Europe
Western Europe
Africa
Americas
0
0.2
0.4
0.6
0.8
1.2
1.4
1.6
1.8
% of revenue
Average accepted revenue leakage by maturity level
Acceptance of revenue leakage also

varies by maturity level:
Less mature operators target leakage of
1.5% on average, while mature operators
accept less than 0.5%.
1.80
1.60
1.40
but 1% of a lot of revenue is still a

lot of money:
1.20
1.00
0.80
% of revenue
0.60
1% of US$1 billion is still US$10 million; so

operators still have room for further efforts to
reduce leakage.
0.40
0.20
0.00
M1
M2
M3
M4
M5
30
Revenue Assurance Technologies/Systems/Tools

Leading practice tools
RA Software
Typical controls performed with the tool

Trend analysis
Switch to bill reconciliation
Provisioning reconciliations
Independent Revenue Reporting
Test Call Generator (TCG)

Test calling with CDR generation and rating validation
Fraud Management System (FMS)
Near real time usage monitoring
Traffic pattern analysis
Probes
Data warehouse (DWH)
Generating independent traffic records which could be

reconciled with CDRs
Reconciliations
Trend analysis
31
Revenue Assurance Automation

%
80
% Manual + data warehouse

% Auto (in-house or commercial software)
70
60
50
40
30
During the survey conducted by the

leading
consulting
firm,
the
responses made from the all the
respondents in the context of revenue
assurance automation within their
own company were analyzed and
connected
with the firms best
practice which is showing clear
distinction between the manual and
automated controls of the major
revenue assurance domain.
20
10
0
Product and
Offer
Management
Order
Network
Management Management
and
and Usage
Provisioning
Rating and
Billing
Receivables
management
Finance and Customer

Accounting Management
Partner
Management
32
OPEX and CAPEX Analysis
OPEX RATIO
Opex per total subscriber connection

Opex per Minute
Opex per site
Opex % of revenue
Service Opex (Customer Care &
Billing, Service Creation &
Administration) as % Revenue
Network Operating Cost as %
Revenue
Marketing Opex/Gross Connection
Marketing Opex/Net Connection
Rental as % Network Opex

Power & Fuel as % Network Opex
Repair & Maintenance as %Network
Opex
Transmission as % Network Opex
Core Network as % Network Opex
33
OPEX and CAPEX Analysis
CAPEX RATIO
Capex (% Revenue)
Capex per total connection
Capex per Minute
Capex per Site
Capex-MSC/ Subs
Capex-BTS/ Subs
Gross Capex ( Gross Fixed Assets

+ Incremental Capex)
Spectrum Charges as % Revenue
License Fee as % Revenue
Capex (Intelligent network)/Prepaid Revenue

Capex (Core Network-Voice, SMS excluding Data)/Total Revenue
Capex (core Network-Data)/Data Revenue
IT infrastrucrure /Total Revenue
Transmission Backbone/Total Revenue
Product related CAPEX/Revenue from Product
34
70+ Key Telecom Financial and Management KPIs

Financial and Revenue
Marketing and Sales
Operating Efficiency
Usage and Subscriber
Growth Performance, Quality and Coverage
Financials
Gearing ( net Debt/ EBIDTA)

EBIDTA % Revenue ,PAT % Revenue
ROIC (EBIDTA/ Gross Capex)
FCF (EBIDTA Capex Tax) % Revenue
Capital Productivity (Revenue / Gross Capex)
P/E
Revenue
ARPU ( Average Revenue Per User)
ARPU Segmentation: Voice , Data , Aggregate
ARPU Segmentation: Prepaid, Post-paid , Blended
ARPM (Average Revenue Per Minute)
ARPM Segmentation: Prepaid , Post-paid , Blended
Average Revenue Per Call
Average Revenue Per Cell Site
Average Revenue Per Employee
Revenue Breakup (%)
Access: Connection, Subscription
Wireless Voice
Data ,Internet,Interconnect
Roaming , International Roaming Revenue
35

Marketing and Sales
Subscriber Acquisition Cost (SAC ) : Dealer

Commission, Terminal Subsidy, Sales, Marketing,
Distribution cost
SAC as % Revenue
SAC / net Addition
SAC / Minute
Sales Outlet
Company Owned Sales Outlet
Number of Retail Outlets or Point of Presence

(POP)
Customer segmentation
Analysis of subscriptions
Top N customers
Churn (No. of Subscriber who stopped using Services
or left particular network)
Total Subs
Subs Segmentation: Prepaid, Post Paid
Churn per month per segments
Subscriber per Employee (13,000)
Subs Share
Revenue Market Share
Minutes Market Share
36

Marketing and Sales
Number of BTS Sites

Number of MSC Sites
Number of Employees
MSC/ Subs
MSC/ BTS
BTS/ Subs (1000)
BTS/ Km2
Spectrum Charges as % Revenue
License Fee as % Revenue
Interconnect Cost as % Revenue
Labour Cost (% Revenue)
OSS/ BSS Ratio
Share of Net Adds Subs
Share of Incremental Revenue
Quarterly Sites Added
MRPU ( Marginal Revenue Per User)
Growth
Subs Growth
Revenue Growth
Services Revenue Growth
Services Revenue Acceleration
ARPU Growth
ARPM Growth
Subs Added / Retail Point of Presence (POP)
37

Marketing and Sales
Subscriber Usage
Usage
Minutes of Usage (MOU)
MOU Segmentation: Prepaid , Post-paid , Aggregate
MOU Segmentation: Incoming, Outgoing , Aggregate

Number of Outgoing SMS Per Sub Per Month
Minutes Carried Per Month (MON)
Number of recharges per subscriber
Average Data usage per subscriber per month( MB)
% Airtime Capacity Utilization
Minutes Per Site
Number of Calls
Number of Calls per Subscriber
Average Call Duration
Roaming Minutes
International Roaming Minutes
International Roaming Minutes Segmentation: Incoming ,
Outgoing
Top 50% Users Revenue %
Top 50% Sites Revenue %
38

Marketing and Sales
Subscriber Usage
Quality and Coverage
Coverage and Spread
Towns ,Area and Population Covered
% Traffic Within Own Mobile
Service Performance
RTT Delay (Ms) (800)
Application Through Put ( kbps) (25 Kbps)
Call Setup Time
Network Congestion
Point of Interconnection (POI) Congestion (<0.5%)
Connection Establishment (Accessibility)
Call Setup Success Rate (CSSR) (>95%)
Standalone Dedicated Control Channel (SDCCH) Congestion

(<1%)
TDH Congestion (<2%)
Connection Maintenance (Retain ability)
Call Drop Rate (CDR) (< 2%)
Worst Affected Cells for Call Drop Rate (<5%)
Connection with Good voice quality (>95%)
Service Quality
Prepaid Prepaid Service Success Rate
Number Portability Drop Rate
Handover Success Rate
Network Availability
BTSs Accumulated downtime (<2%)
Worst Affected BTSs due to downtime (<2%)
% of open and Closed and level of escalation priority required
Mean time to resolved
Work in progress & Customer service level statistics

39

Marketing and Sales
Subscriber Usage
Penetration
Penetration ( >5Years Population)
Penetration per House Hold
Top 2 Players Share
Top 2 Players Share Change
HHI Index
Pricing Long Distance/ Local Price Ratio
Average F2M Interconnect Rate
Average M2M Interconnect Rate
Sim/ User ( Number of Subscribers/ Number of
handset Sales)
ARPU ARPU % of disposable income
Mobile Revenue/ GDP
Regional Roaming Usage (Roaming Travelers / Intra
Regional Travelers)
Subs/Km2/MHz
Subs/Km2 (Urban)
Spectrum per Operator (MHz)
Country Telecom Sector
40
Agenda
1
41
Revenue Assurance Organization

Objective
To provide and sustain an effective enterprise-wide process that will independently
confirm the end-to-end completeness, accuracy, integrity and timely capture, billing and
reporting of all revenue generating events; while identifying emerging revenue risks
and/or opportunities with a view to mitigating/exploiting same.
42
The Revenue Assurance Organization: Insight

How to structure a Revenue Assurance organization to achieve success?
Many operators continue to struggle with questions such as these:
Where should the Revenue Assurance function sit within the organization?
How many people should there be within the Revenue Assurance organization?
What should RAs relationship be with functions such as fraud, internal audit, risk management, finance,
billing, and customer relationship management?
What should the organizational structure look like?
What type of roles and skills should there be in the team?
How can we build cultural awareness by linking RAs performance to wider Group targets?
Unfortunately there is no one-size-fits-all answer to these questions:
The objectives set for the Revenue Assurance function, together with the characteristics of the organization
as a whole, will shape the appropriate structure. The nature of the RA organization will be influenced by
factors including:
size of the organization
existing structure of the organization
risk culture
group structure
initial start-up point (where was it initiated?)
executive sponsorship
regulatory requirements.
43
Who will Assure Revenue?

Revenue Assurance Department
RA Director
Governance
Risk assessment
Strategy
development
Developing policies
and procedures
Compliance
monitoring
Management
reporting
Diagnostic
Building new
controls
Investigating RA
issues and perform
root cause analysis
Assist in risk
assessment
Revenue analytics &

control execution
Follow up on trends
Revenue forecasting
Root cause analysis
differences between
forecast and actual
Day-to-day control
execution
Fraud management
Managing the
telecommunication
fraud aspects
Project team(s)
Special project
team(s) to run larger
RA or Fraud projects
such as
implementation of
RAS and FMS
Core RA team
Ad hoc team
44
Revenue Assurance Function Maturity Levels
Strategy
Organization
Process
and tools
Maturity Level 1
Early
No formalized
strategy and limited
RA influence
Maturity Level 2
Recurring
No formalized
strategy, but some
RA successes
Maturity Level 3
Established
Formalized strategy
and influence at
executive level
Undefined RA
structure. Limited to
isolated and
personal initiatives
Early formalization
of the RA function,
but with low
influence
Defined and
recognizable team
focusing on RA
activities
Small team not

focusing exclusively
on RA activities
Skillset in
development
Availability of
multidisciplinary
skills. Training on
an ad hoc basis
Reactive and
instinct-based RA
activities. Only basic
RA tasks
Basic revenue
leakage-related
tasks performed
Major RA process
covered
Substantial manual
effort and end-user
computing tools only
Automation remains
fragmented
Some automated
RA processes
Maturity Level 4
Administered
Formalized
strategy with
strategic papers
and elements of
group integration
RA activities are
spread into the
organization and
monitored by the RA
team
RA staff have key
technical skills and
subject matter
expertise. Training
budgets are available
All revenue leakage

and fraud processes
are covered
Tools are widely
available
Maturity Level 5
Optimized
Strategy is riskbased, includes
cost reduction
parameters, and is
integrated within the
group
RA primarily
undertakes a
monitoring and
advisory role
RA staff also have
accounting and
auditing skills.
Formal training and
skills optimization
plans are in place
All RA processes
are covered
Optimized
automation of RA
tasks
45
Revenue Assurance Function Maturity Levels (contd)

Number of
respondents
20
18
During the survey conducted by the

leading
consulting
firm,
the
responses made from the all the
respondents in the context of revenue
assurance
function maturity level
automation within their own company
were analyzed in the combination of
the operators own self-assessments
from the survey questionnaire, with a
comparative
analysis
ranking
respondents
versus
the maturity
model.
17
15
12
10
7
5
2
0
M1
M2
M3
M4
M5
And it evident from the chart that 73%

of the revenue assurance functions
with in the respondents from around
the world were rated between the
maturity level 2 and 4.
Maturity level
46
The Revenue Assurance Strategy: Insight

Why have a strategy?
The need for a Revenue Assurance strategy which is in line with, and integrated into, the
overall risk management framework of an organization should be an obvious point. By having
a documented and publicized strategy, the goals and purpose of the Revenue Assurance
function help other departments within the business clearly understand what Revenue
Assurance is trying to achieve and why Revenue Assurance should be embedded into the
operating processes of the business.
This understanding is critical in delivering improved revenue capture, as without buy-in to the
strategy, the goals of Revenue Assurance will simply not be achieved.
47
Revenue Assurance Strategy

100%
In its early
stages,
Revenue
Assurance tends to focus on revenue
leakage and fraud. As it becomes
more mature, Revenue Assurance
Profitability enhancement gets increasingly involved in cost
reduction matters.
80%
60%
Cost reduction
Fraud
40%
Revenue leakage
20%
0%
M1
M2
M3
M4
M5
Maturity level

48
The Revenue Assurance Function is well empowered

within the Organization
Reporting line of the RA function
4%
6%
2%
4%
Chief Financial Officer

Chief InformationOfficer/IT Director
Headof Internal Audit/Audit
6%
Committee
Chief Executive Officer
12%
Risk and Compliance Manager

Billing Manager
66%
Chief Technical Officer
Revenue Assurance function positioning in

the C-Suite organization
4%
Same level
13%
43%
Level -1
Reporting to the CFO or CEO gives Revenue

Assurance access to senior management:
In most organizations, Revenue Assurance sits
under the finance function and reports directly to
the CFO.
Championing of Revenue Assurance by the
CEO/CFO is crucial to its success. In some
organizations, changes in sponsorship however
continue to affect RAs influence across the
business.
But Revenue
Assurance
managers
still cite
influence as a key challenge:
Although most Revenue Assurance managers are
CFO -2 levels and above, almost half cite their lack
of influence as a key challenge.
Level -2
40%
Below level -2

49
Collaboration with Other Departments is Progressing,

But Challenges Remain
Collaboration level with the RA function
Billing
Two conflicting factors impact Revenue Assurance's

positioning:
The need for across departments influence
IT
Network operations
Finance
inadequate
hierarchical
And the sometime
positioning of Revenue Assurance within the
organization which could limit RAs ability of action.
Technical departments (billing, IT, network) are key
collaborators, together with Finance.
Customer care
Internal Audit
Sales and Marketing
Risk and Compliance
Regulatory
Involved
It is believed that Revenue Assurance should:
Ad hoc
Other
0
10
20
30
40
50
60
70
80
Less than 40% of respondents have a

continuous relationship with internal audit, less
than 30% with risk and compliance, and less
than 20% with regulatory functions. This lack of
linkage makes it harder to implement a riskbased Revenue Assurance strategy.
90
100
Operate
as
a subset
of enterprise
risk
management
And benefit from formal links with the internal
audit, risk management and compliance functions.
More mature RA functions maintain strong ties and
synergies with other risk management functions.
50
People Capabilities of Revenue Assurance

What determines RA skills needs?
The wider the product mix, the greater the need for a mixed skills group
The more skills, the greater the size of the department and the greater the need for multiple
applications in order to provide coverage and assurance across the various product streams
Do you have to be able to respond quickly and adapt to constant change?
Do you need to ensure an appropriate presence and input at senior Level and across various
Change forums?
51
The Skills Paradox: A Finance Function with Mainly IT,

and Technical Competencies
Revenue Assurance people core skill
Billing, IT and Technical are Revenue Assurance

teams key skills:
Around 75% of respondents have expertise in
billing solutions and network, traffic, and switching.
Billing Solution Subject Matter Expert

Network, Traffic, Switching Subject
Accounting
Data Mining Subject Matter Expert
Auditing
Despite this, Revenue Assurance is seen as a finance

function:
The balance of skills will depend on the scope of
work delivered by Revenue Assurance.
Fraud Subject Matter Expert

others
0
10
20
30
40
50 60
70
Functional perception of the RA function
80
90
%
Part of the Core Finance

Risk and Compliance Function
Audit-like Function
Function within Billing
Policing Funtion
Start-up Revenue Assurance functions often use

consultant roles to identify areas for improvement,
plus basic technical skills.
More mature Revenue Assurance capabilities start
specializing in specific areas.
Reporting may be overlooked in the RA functions
early days, but is a powerful tool for gaining
influence.
Function within IT or Network

0
10
20
30
40
50
%
52
Value Contribution, Automation, and People are the

Top Organizational Priorities
RA performance self-assessment
A substantial majority of respondents believe they are
doing quality work, have sufficient competence and
knowledge, and are given enough responsibilities and
challenges.
Quality of Work Performed

Competence and Knowledge
Scope and Responsibilities
Effectiveness of Tools
However, they face four key challenges:
Influence and Authority

Budget Available
Availability of Resources (People)
Low
Poor
Medium
High
Excellent
Revenue Assurance challenges

35
30
25
20
15
10
5
0
Continue
Demonstrating
it brings added
value
Automation
Knowledge
Senior
Management
Awareness
Power,
Influence, and
Authority within
the
Organization
Budget
Others
Source Global revenue assurance survey by Ernst & Young, 2009
The idea that having a Revenue Assurance

function adds value to the organization has yet to
be proven.
The industry is struggling to recruit people with the
full range of skills needed.
Automation and implementing the right tools are
key for RA teams to focus on value-added
activities, and to establish an end-to-end capability.
Influence remains a key concern, reflecting the
potential conflict between RAs need for across
departments authority and its position in the
hierarchy.
53
Key Factors to be Considered
Collective responsibility for revenue assurance the root cause for revenue leakage
being the lack of coordination, it is important to have a separate team with clear responsibility
towards revenue assurance.
There should be a framework document for the revenue assurance activities. The
revenue assurance team should come out with a framework document with due consideration
for measurements and best practices
The revenue assurance team should also consider the external events related to the
reliability factors such as system failures, their impact and the effectiveness of the
contingency procedures.
Tracking and reporting as specified in the framework document should be strictly

implemented.
54
Thank You
Ikwe Gideon
gideon.ikwe@datahouseconsulting.com
www.datahouseconsulting.com
55

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Telecom Revenue assurance 101

What is revenue assurance?

How to assure revenue?

Sources , Type and Statistics of Revenue Leakages

Revenue Assurance KPI and Tools

Who will assure revenue?

Key factor to consider

Why is Revenue Assurance Required?

Effects of worsening market conditions

What is Revenue Assurance?

Revenue Assurance Processes: an holistic approach

In an ideal world, Revenue

Revenue Assurance Framework

REVENUE RISK ASSESSMENT

Plugging of revenue losses and

RECOVERY AND SUSTENANCE

Timely reporting and escalation

COMMUNICATION AND REPORTING

Tools and analytics

Scope of Revenue Assurance whats in & whats out?

Revenue Assurance Core Activities

Revenue Assurance Basics

As RA develops other areas of leakage are

Monitoring and Reporting

Revenue Assurance focuses on each of these

The core principle for processing of data for metering

Data Analysis is focused upon a known

Process Improvement considers the end to

What is revenue assurance?

How to assure revenue?

Sources , Type and Statistics of Revenue Leakages

Revenue Assurance KPI and Tools

Who will assure revenue?

Key factor to consider

How to Assure Revenue

Map the data sources to the information model.

How much usage is recorded

Identify products and services

Network usage with billing

What is revenue assurance?

How to assure revenue?

Sources , Type and Statistics of Revenue Leakages

Revenue Assurance KPI and Tools

Who will assure revenue?

Key factor to consider

Sources of Revenue Leakage?

Product and offer management, Sales Order management and

Lack of revenue assurance

Subscribers provisioned in the billing

Network management and usage Risk

Not all Billable CDRs are generated by the

Sub optimal call routing

Rating and billing Risk

Revenue for content services maybe

Prepaid trigger to restrict at defined

Collection , adjustments, Finance and accounting Risk

Documentary proof for calculation of credit

Usage incorrectly captured in the revenue

Examples of Potential Causes of Leakage

Missing records & Clock drift

Failure to track customer

Inaccurate recording of call

Itemised billing not activated