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Fraud Management for Telco Operators

January 15, 2017 | By : George Sabry

The current Era that the Telco operators face is the Era of Revenue assurance and fraud management.
Knowing the Telecommunications industry situation, stopping a revenue leakage is no more a luxury; it is a mandate because the EBITDA and the revenue margins are under a strong pressure to drop.
Looking to the other end, you will notice that the Providers of Revenue assurance and Fraud management solution have reached a dead end and no more growth is noticed in their business. Almost all of them are looking for growth in other industries than the Telecommunications.

This situation is a bit strange

“Telco operators still have a need for revenue assurance and fraud management solution. Despite that, almost all Telco operators have already one of the revenue assurance solutions running on their BSS.”

This reflects that need is not fulfilled in the right way.

Analyzing this situation, the following reasons are raised:

  1. Existing Revenue assurance and fraud management solution is holistic, general, and treating the whole subject dimensions in a generic way.
  2. Existing Solutions require more effort to setup, implement, operate and manage just to catch the revenue leakage.
  3. ROI (Return on Investment) for low ARPU (Average Revenue Per User) with small customer base Telco operators is not appealing (Average Fraud Loss is 2.09% from the revenue as per 2013 Global Fraud Loss Survey, CFCA Communications Fraud Control Association).
  4. Existing solutions provide the cases of the revenue leakage without providing the root cause behind it, where it may take ages from the Telco operator fraud team to discover the root cause and fix the problem.
  5. Existing solutions are reactive and discover the revenue leakage case after it happens.
  6. Existing solutions are not integrated with IT infrastructure and do not follow any IT security regulations.

From all of the above, and for the solution providers to start leverage the need, they have to re-engineer their solutions before a new entrant will come with an innovative solution and kick them out of business.

Re-engineering has to be done as follows:

  1. The solution has to tackle a well-defined and concrete problem(s)/case(s).
  2. The solution must not stop on showing the case; instead, the solution has to show the root cause of the case to speed up the recovery and the future fix.
  3. The solution should work in a pro-active mode, i.e., catch the case before generating the leakage.
  4. The solution should integrate with IT infrastructure and follow the IT security standards.
  5. The solution has to benefit from the new Technology trends, e.g. , predictive analytics, Big Data, machine learning, cloud and so forth.
  6. ROI for the solution has to be appreciated with the small customer base and low ARPU Telco operators.

It is a critical, and costly transformation for solution providers, taking into account that this transformation is mandatory for them to survive in this business line.

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