A new paper published by Stratecast, a division of Frost & Sullivan, in conjunction with revenue assurance solutions provider cVidya, has revealed potential cost savings service providers and operators can achieve if they address the issue of inter-carrier revenue leakage. In the wholesale market, inter-carrier revenue leakage represents approximately 3 to 5 per cent of service provider’s total costs for traditional voice products, and in the range of 7 to 11 per cent for broadband products. The paper* explores the challenges of billing errors and disputed invoices both for retail service providers and wholesale network operators and the financial implications on the Telecoms industry.
The paper identifies frequent inventory updates and contract discrepancies as key areas of concern. Resolution is often time-consuming and manual in nature, even for traditional services. The emergence of next generation services adds another level of complexity to the problem.
The paper highlights the potential cost savings available to operators who adopt tools, such as cVidya’s EZTrust Partner Invoice Reconciliation Solution, that can automate the process of data gathering, aggregation and comparison and provide network operators and service providers with full visibility into cash flow. Automating these processes helps mitigate risks and reduce overall operating costs, allowing financial managers to spend time on more strategic issues, accelerate ‘time to results’ and lead to speedier resolution of disputed invoices.
Susan McNeice, Global Director of OSS/BSS Competitive Strategies for Frost & Sullivan’s Stratecast division and author of the report comments: “The issue of wholesale revenue leakage is an ongoing problem for the Telecoms industry. In a world of $US 2 trillion annual telecom spend, this is easily a multi-billion dollar problem. In these difficult economic times, when organisations across the globe are looking for ways to improve cash flow management, the need for improved visibility and predictability is essential. Wholesale billing errors are costly, both in financial terms through lost revenue and also through damaged relations between operators and service providers. Revenue assurance and cost management software, specifically designed to address inter-carrier reconciliation can help to ensure leakage is prevented, disputes are resolved speedily and overall operating costs are reduced.“
Alon Aginsky, CEO of cVidya comments: “The findings bring to the forefront this previously underrated, but potentially huge, issue of inter-carrier revenue leakage. The costs savings that service providers could potentially make is staggering and would positively impact on their cash flow. With this in mind, businesses should be looking to invest in revenue management solutions, which are specifically designed to tackle the problem. We have recently launched the EZTrust Partner Invoice Reconciliation to meet just this need, providing a platform for both wholesale and service providers to automate dispute management and reconciliation processes. The system is designed to improve operational efficiencies by automatically verifying and correlating invoices and managing billing queries and disputes against services delivered.”
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*“Improving the Predictability of Wholesale Costs & Revenues – An Executive Brief” published by Stratecast, June 2009, by Susan McNeice Global Program Director Communications Infrastructure & OSS/ BSS Software, Stratecast (A Division of Frost & Sullivan)