Lindy do telecommunications_revenueassurance

Telecommunications Revenue Assurance
By Lindy Do
ACC 626

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Table of Contents
Note to Practitioner ...................................................................................................................................... 3
Introduction................................................................................................................................................... 4
Telecommunications Industry....................................................................................................................... 4
Revenue Leakage........................................................................................................................................... 5
Poor Operational Processes and Procedures............................................................................................ 5
Poor Systems Integration .......................................................................................................................... 6
External and Internal Fraud....................................................................................................................... 6
Average Amount of Revenue Leakage ...................................................................................................... 6
Revenue Assurance Strategies ...................................................................................................................... 7
Outsourcing Revenue Assurance............................................................................................................... 7
Fixing Root Causes of Revenue Leakage ................................................................................................... 8
Revenue Assurance Process Maturity....................................................................................................... 8
Implementation of Strategies ................................................................................................................... 9
Challenges Facing Revenue Assurance.......................................................................................................... 9
IP-Based Services..................................................................................................................................... 10
Billing Complexities ................................................................................................................................. 10
Interconnection Arrangements............................................................................................................... 11
Future of Revenue Assurance ..................................................................................................................... 11
Revenue Operations Center.................................................................................................................... 12
Key Performance Indicators.................................................................................................................... 12
Revenue Assurance Market..................................................................................................................... 12
Conclusion ................................................................................................................................................... 12
Appendix 1 – List of Revenue Assurance Providers .................................................................................... 14
Appendix 2 – Revenue Assurance Maturity Levels ..................................................................................... 15
Appendix 3 – Specific VoIP Issues ............................................................................................................... 16
Appendix 4 – The Revenue Operations Center........................................................................................... 17
Glossary....................................................................................................................................................... 18
Bibliography................................................................................................................................................. 20

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Note to Practitioner
This paper will provide an overview of one of the largest issues facing the telecommunications industry which
is revenue assurance. Billions of dollars are lost annually through revenue leakage because of faulty internal control
processes, systems and fraud. As an auditor of a telecom company, you will need to understand the industry and
the factors that affect their revenue cycle in order to design audit procedures and to gain sufficient and appropriate
evidence that supports the fact that revenues recorded are not materially misstated. After reading this paper, you
should be able to identify the environmental and company-specific risk factors to account for in your audit plan.
Revenue assurance is the umbrella term that describes the activities that a telecom company will undertake in
order to ensure that their processes and procedures minimize revenue leakage. Global spending on revenue
assurance services and products is expected to grow to $934 million in 2008 up from $508 million in 2003 (Hankins,
2004). Much of this money will be spent on outsourcing the revenue assurance function to third party vendors
since 68% of telecom companies are using such vendors (SubexWorld, 2007). Because you will be relying on these
outside parties’ performance in your audit, a section 5970 report would be required which reports on the
operational effectiveness of the controls at that third party. If a section 5970 report cannot be obtained, you will
have to perform more substantive audit work on the client. The audit plan should be adjusted accordingly.
This paper will alternate between using the terms telecommunications company, telco, service provider,
operator, and carrier, which all mean the same thing. Also, please refer to the glossary for a definition of terms
used in the paper.

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Introduction
Revenue assurance is the umbrella term that describes the activities that a telecommunications company will
undertake in order to ensure that their processes and procedures minimize revenue leakage. This leakage occurs
when revenue that has been earned by the company, such as when services are rendered to the customer, but lost
on its way to the billing systems so that the customer never gets invoiced. Many telecom companies do not like to
talk openly about revenue assurance. This is because it is a process that can identify the amount of money they
lose as caused by their inaccurate BSS/OSS networks. In the past, the problem was largely ignored; because trying
to assess the problem would only point out to a telecom executive that the errors in the systems were wasting
their shareholders' money (Wieland, 2005).
However, some of the myths that surrounded the revenue leakage issue such as that the problem is too big
and complex to address or that the amount of revenue lost is not really that much (Geppert, 1998), that allowed
executives to ignore the problem have been proven to be not true. Today, there are many revenue assurance
providers and products which can help minimize losses. SubexAzure's fifth annual “2007 Global Operator Attitudes
to Revenue Management Survey” estimated that the average leakage rate was 13.6% of revenues (SubexWorld,
2007). Since the 2007 global telecom market revenue is estimated at $2.3 trillion (Business Wire, 2007), this
represents a $313 billion annual loss for the market. Even for an average company making only $6 billion annually,
that's a loss of $816 million that could be prevented. Telecom service providers know that they cannot continue to
ignore this problem and thus a market for revenue assurance products has developed.
This demonstrates the significance of the revenue leakage problem and indicates that companies will need to
actively seek a solution in order to minimize their operational losses. This paper will describe some of the strategies
that have been proposed to combat the problem but before that, an overview of the telecom industry is provided
along with details regarding the sources of revenue leakage. The actual corporate implementation of these
strategies is then discussed followed by current challenges facing revenue assurance and lastly, a section describing
the future of revenue assurance is provided.
Telecommunications Industry
Historically, the telecom industry has been globally regulated with significant barriers to entry. Carriers were
guaranteed certain profit regardless of their operational expenditures so they could afford high cost processes,
including revenue leakage, and still make money (Levine, 2005). As a result, the carriers did not prioritize the
development of efficient or accurate processes that control the data flows through their systems (Pratt, 2006)
which contributes to the current high rates of revenue leakage reported by telcos. Also, the volatility of the
telecom industry resulting from privatisation, merger and acquisition activities, continuously changing technologies
(Evans, 2004), along with intense competition, which really only began in the last five to ten years due to the

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Telecommunications Act of 1996 deregulating the industry (Pratt, 2006), has forced managers to revaluate their
system processes for leaks and find ways to plug the holes to improve performance and maximize revenues.
Another major factor that increased the demand for revenue assurance was the 2002 Sarbanes-Oxley Act.
This required the CEO and CFO to sign off on the integrity of the financial statements, which includes assuring that
revenue is measured accurately (Stanislaw, 2005). Other external drivers for revenue assurance are the customers
who require accurate, complete and timely invoices and shareholders who demand effective controls over business
operations (Evans, 2004) to increase their shares’ value. To meet all these demands, a company must identify the
sources of their revenue leakages and provide for a solution to patch up the holes.
Revenue Leakage
Due to the massive volumes of low-dollar and complex micro-transactions that stream through the multiple
processing systems of a typical telecom company and then trying to meter the information at various control points
and recombining them into coherent, personalized billings without any errors is basically impossible (Lombardi,
2000). Although leakage may be inevitable, identifying the main sources can help find solutions to minimize them.
There are three primary revenue assurance problems; they are the unbilled customer (which occurs when the
system does not recognize them), the mis-billed customer (those who are billed the wrong amount for services
consumed), and stranded network resources (the false identification that equipment is unavailable which then
causes unnecessary investment in new equipment, i.e. stranded terabytes of unused but potentially billable traffic)
(Aginsky, 2006). In a typical telecom company, there are many specific sources of revenue leakage; they are
described below followed by a discussion regarding the average of amount of revenue leakage.
Poor Operational Processes and Procedures
There are many sources of leakages, most of which stem from poor operational processes and procedures.
For example, leakage can occur even before a single call is made by the customer when there are human errors in
the service activation process where the order details are first entered into the billings system (Pratt, 2006). Human
errors can also impact the invoicing system by having incorrect information entered into the rating engine (Pratt,
2006), for example, long distance charges of 9 cents per minute are entered as 8 cents per minute or by entering
the wrong termination date for pricing promotions. Such errors would affect many customers and cause the
telecom company to lose large amounts of unbilled revenue. Also due to poor operational processes, a carrier may
be oversupplied with connectivity. For example, there may be unallocated resources that are not being recycled
from customers who have left and cancelled services (Morisy, 2007).
Another source of leakage is due to errors in the usage processes (the mediation and billing systems) involving
call detail records (CDRs). Considering that a typical telecom company handles around 170-200 million CDRs a day
(Evans, 2004), leakage can occur anywhere along the network as the CDR is transported from the switch to the
mediation system to the billing system, whereby the CDR is misrouted, corrupted or misidentified (Pratt, 2006).

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Poor Systems Integration
Another reason why leakage is such a large issue is related to a company’s network of systems. Most telecom
systems were built based on 1970s technology to support a very structured and rigorous regulated market
(Lombardi, 2000) and does not work well in today's environment due to the required flexibility to accommodate
the fast-paced changes occurring with technology and in the industry. Large telecom networks are not actually one
system but a set of different disaggregate legacy systems that have either evolved over time or are the result of
merger and acquisition activities (Ryan, 2000). Integration of the different back office systems is often done poorly
because management do not have the resources to undertake such a project and also because they were not made
to work with each other in the first place. The gaps between the systems are usually handled manually so the
potential for inconsistencies, errors and leakage is especially high (Srivastava, 2005).
Other times, revenue leakage occurs due to errors occurring during upgrades and changes to the network
systems. Telecom carriers are under pressure to introduce new, complex services and pricing promotions quickly,
without fully resolving back office issues in order to properly bill for them, which creates further weaknesses in the
system (Levine, 2003; Cronin, 2004). Many errors also occur at the point of interconnection between two carriers
since the interfacing systems were not designed to work with each other (Tulloch, 2003). This can also cause the
problem of phantom traffic whereby revenue can be lost due to the inability to identify the originating carrier and
therefore interconnection fees cannot be billed (Dell, 2006).
External and Internal Fraud
Telecom fraud involves the theft of services or deliberate abuse of the network because the perpetrator
intends to avoid or reduce charges for services used (Jacobs, 2008) and has been cited as the number one factor for
operator losses in 2007 (SubexWorld, 2007). Fraud can occur externally by other carriers (intentional phantom
traffic) or other outside sources (Guerra, 2005) or internally by a carrier’s own employees (by providing discount
rates to friends and family) (McClelland, 2004). This is a big problem because it can erode margins, consume
network capacity and jeopardize customer relationships. The main type of fraud is subscription fraud whereby
users sign up for services and use the account for national and international calls with no intention to pay. Another
type is premium rate service fraud where operators of those 900 number lines organize fraudulent calls to their
numbers to inflate incoming traffic and increase their revenues (Johnson, 2002).
Other scams involve cloned mobile SIM cards where an existing customer’s hardware is replicated and used to
make calls on their account without them knowing until they get their monthly bill (Johnson, 2002). Another
problem is that many telcos set up offshore are to launder money (by charging low rates and then closed down)
which would affect interconnection revenues because these companies are usually shut down quickly without
paying those fees (Global Telecoms Business, 2004).
Average Amount of Revenue Leakage
Some telecom executives want to know what the average amount of leakage is so that they can compare their
companies to that figure. However, actual leakage reflects peaks and valleys rather than a steady flow and ideally

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over time, the peaks should become less severe but given the continuous changes in the industry, companies have
not been able to focus on driving down leakage (Shaw, 2006). Expected leakage varies and is based on many
factors, such as customer segment, organization maturity, changes to the network and sector specific risks. Most
leakage is correctable; the challenge lies in its initial detection and identification (Shaw, 2006). The next section will
discuss some revenue assurance strategies can help with this process.
Revenue Assurance Strategies
A revenue assurance strategy includes all the activities that a telco does to ensure that aspects of systems,
policies, process, and procedures that impact revenue is addressed. The core elements of a good revenue
assurance strategy includes performing a risk assessment in order to prioritize high risk areas, integrating revenue
maximization techniques and implementing key automated tools, creating a revenue responsible organization,
embedding quantifiable monitoring mechanisms and having committed champions (Browning, 2003).
The strategy should emphasize having a holistic, end-to-end approach, meaning that a review of the full
revenue cycle is done to capture more leakage events than when doing separate and disjointed assessments (Shaw,
2006). There should also be an independent and dedicated revenue assurance team consisting of cross-functional
team members. Revenue leakage is usually treated as a billing issue, however one department is not responsible
for all elements on the invoice (Lombardi, 2000), and therefore, an organization-wide charter for revenue
management is required rather than treating it as the sole responsibility of that single group. The long term
effectiveness of revenue assurance strategies will depend on the enterprise’s mindset as cultivated by the
champions (Shaw, 2006). The right leadership team and corporate culture which have accountabilities do not
tolerate revenue leakage is crucial to success of revenue maximization strategies (Browning, 2003).
The first step to providing revenue assurance would be the development of clear, measured, and accountable
day-to-day processes along with key automated tools that can prevent leakage, such as training employees on data
entry and change control procedures. Reactive controls should also be developed for those problems that cannot
be prevented (Lombardi, 2000), for example, software can build alarms into the systems so that errors can be
detected as they occur. Quantifiable monitoring mechanisms should also be embedded into the system, such as
tools that can provide for trending analysis, reconciliation to control totals and performance of recalculations to
confirm accuracy of data derived from the system (Sobol, 2003). Automated software tools are keys to a revenue
assurance strategy due to the scale and complexity of telecom billings. They can catch errors and proactively
address them before they move downstream to leak revenue or cause customer dissatisfaction (Srivastava, 2005).
Outsourcing Revenue Assurance
To keep costs under control and not sacrifice performance, many telcos are working with third party revenue
assurance providers instead of performing activities in-house. The benefits include that they will always have up-to-
date, sophisticated systems and expertise while charging only on a pay-as-you-go basis (either by percentage of
savings or transaction volume). It is also always quicker to implement because the IT facilities, operations and

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support team are already in place (Cronin, 2004) and there are many quality vendors offering their services (please
see Appendix 1 for a list of vendors). SubexAzure’s 2007 survey reported that 68% of operators use third parties
and would lose 30% less compared to those who perform revenue assurance in-house (SubexWorld, 2007).
However, many third party vendors just identify the leakages by collecting data from the network and comparing
with information generated by the billing system and do not actually work to prevent the errors (Levine, 2003).
Suggestions on how a telco can eliminate the root causes of revenue leakage are described below.
Fixing Root Causes of Revenue Leakage
A major task is to ensure that the data integrity of CDRs and IPDRs are maintained throughout the end-to-end
processes. In order to do this, a telco must fully understand their organization’s usage data management
requirement and network topology and how it delivers its services. They must be able to quantify the scale of the
problem, have a method to resolve the discrepancies, and a way to measure and report periodically along with a
coordination of changes required (Ibbett, 2003). An example of an audit methodology to ensure integrity would be
test-calling procedures. Frauds are difficult to prevent but if telcos have good procedures in place to detect unusual
account activity, they can at least cancel those subscriptions.
The BSS/OSS systems also need to be integrated and streamlined in order to reduce errors and increase
efficiency (Wieland, 2004). The mediation systems are especially important now, because with IP-switched
networks (which is discussed in more detail in the next section) instead of the old circuit-switched networks, a telco
must pull call and event data from different network elements in the distributed IP environment (Guerra, 2005).
The system needs to be able to identify and isolate erroneous data, inspect and correct it and then recycle the
exception back for re-processing (Guerra, 2005). Some international companies have advanced mediation systems
which help them cut down on revenue leakage. For example, South Korea’s SK Telecom performs value-based
billing whereby they charge the subscriber what they are willing to pay by tweaking content rates so price sensitive
subscribers can download an otherwise expensive movie at an off-peak time, say 3 am with a hot bill available
within five minutes of the subscriber’s session (Baker, 2005). Buying an advanced off-the-shelf mediation tool from
these international companies can be helpful. Another way to improve a telco’s BSS/OSS systems is to decrease the
number of different systems in their infrastructure to cut down on errors due to poor systems integration. For
example, Verizon’s executive director of strategy says his company currently has 18 different billing systems serving
72 lines of business but plans to bring it down to only five billing systems in the future (Wickham, 2003).
Revenue Assurance Process Maturity
The typical revenue assurance maturity pattern seems to place early efforts on “low-hanging fruit” (i.e.
validity of interconnection fees) followed by identification and repairing root cause of leakages (i.e. data integrity
and process optimization) (Finegold, 2006). This is an important note because revenue leakage is inversely related
to the maturity level of a telco’s operational control infrastructure; as the control environment becomes more

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comprehensive and preventative in nature, the potential for finding sizable revenue leakage declines (Shaw, 2003).
Please see Appendix 2 for a chart that identifies the characteristics of a telco’s maturity level.
In the end, a good revenue assurance system should have a broad range of applications in order to act as a
flexible toolbox, capable of handling current and future needs and must support the growing requirements for
commercial and financial transparency and ability to respond quickly to regulatory changes (Stanislaw, 2005).
Implementation of Strategies
Revenue assurance programs provide many benefits, most obviously by increasing revenues, but leakage is
still accepted in the industry. The problem is that every telco is in the same boat, as Keith Willetts, chairman of TM
Forum states, “operators benchmark against each other but not against Dell or Wal-Mart” (Limbach, 2006). Other
reasons include the monopolistic heritage of the industry where accountability is low priority, falling margins are
causing operators to try to reduce costs instead of focusing attention on revenue leakage, and are busy trying to
comply with Sarbanes-Oxley that they may not see the link between it and revenue assurance (Limbach, 2006).
Historically, many operators did not have a dedicated revenue assurance department or even a dedicated
budget (Limbach, 2006) with reasons being that no one likes to admit to revenue collection deficiencies or fraud on
their networks and many saw the revenue assurance functions as a cost centre instead of a an earnings generator
(Cronin, 2004). However, today’s views of revenue assurance is more of a board level discussion than before
because they can see the recovered revenue hitting the bottom line numbers much faster than by introducing a
new service (Global Telecoms Business, 2007). The trend now is that there is more of an enterprise versus project
approach now. Even though multi-disciplinary teams were encouraged from the beginning, many companies still
viewed revenue assurance as a project by the IT department that targets a single business function without
thinking about how it may other areas of the company. However, many C-suite executives are now sponsoring
revenue assurance efforts and having it span the entire organization from human resources to processing as well as
networking and billing (Hankins, 2004). For example, CIOS are also now more focused on corporate financial
performance more on top-line, by increasing revenue, and not just bottom-line cost savings (Karpinski, 2008) so
they will work to ensure the BSS/OSS systems are functioning properly.
Challenges Facing Revenue Assurance
Carriers are not just the telephone company anymore but a communications company (Hutton, 2004). With
data of multiple types, in various formats, and including various third party content (such as ringtones and games),
crossing a variety of disparate platforms, BSS/OSS and operating systems, it is very difficult for telcos to converge it
all into one form (Aginsky, 2006). In order for these next generation providers who deliver voice, video, data, and
internet, to properly and reliably bill customers (Hill, 2006), revenue assurance is required. Some specific issues
related to these challenges are discussed in the following.

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IP-Based Services
The rapid development of broadband makes revenue assurance even more important now. This is the largest
growth area for every telecom operators since it includes services such as VoIP (please see Appendix 3 for specific
VoIP issues) and online gaming, which use data packets or IPDRs and not CDRs (Global Telecoms Business, 2007).
CDRs are largely homogenous and standardized while IPDR usage records have more complex elements such as
transport medium, data volume, packet originator, destination and quality of service metrics (Levine, 2005). This
makes it more difficult to track and bill, especially for incumbents who built their entire billing and accounting
infrastructure around circuit-switched voice calls and because many CDR concepts are irrelevant in the IP world
(Vasquez, 1999). Telcos will need sophisticated mediation tools such as the architecture called IP Multimedia
Subsystem (IMS). IMS can unify the networks of the future and is designed to bring all services (voice, video, and
data) under one IP based delivery platform and enable precise control over service delivery (Milner, 2006).
With IP based networks and internet based services, telcos will also have to face additional threats such as
hacking, denial of service attacks, spam and viruses, worms and Trojans (Johnson, 2002) and provide for mitigating
controls to prevent their networks from going down.
Billing Complexities
Not only must a telco be able to track usage, but they must also juggle complex billing rules around individual
prices (Levine, 2005). The speed of new technology and marketing does not afford time for processes to improve
and keep up with new and pricing promotions (Hankins, 2004). In the past, companies would offer two new
services per year but now it is more like ten new services launcher per month (Nairn, 2004) and many operators
offered picture messaging for free because they could not bill for it (Tulloch, 2003). An example of further
complexities in billing for price promotions is when bundling different services together, there is a sophisticated
pricing schemes such as a discounts sliding scale based on how many services are subscribed to (Wilson, 2005).
Bundling is complicated by the multiple billing systems and provides more opportunities for losses if a telco’s
BSS/OSS systems cannot properly bill for services rendered (Hankins, 2004). In order to properly bill for services,
telcos must ensure that their billing systems are integrated. For example, consolidated or aggregated billing is
rarely complete because it is difficult to reduce the weak links in a provider’s fragmented systems environment.
Telcos must also work at integrating their product-oriented legacy systems with new customer-oriented
systems (Lombardi, 2000); because pricing regimes are very complex nowadays, they must manage the risk of
overcharging customers which if exposed can be very damaging to reputation (Lee, 2007). Revenue assurance
processes have usually been centered around products but now have a customer focus whereby their satisfaction is
very important to companies now. If customers can be kept satisfied, a telco can reduce their churn rates, lost of
future revenue and customer acquisition costs (Hankins, 2004).
Billing systems that are customizable will become competitive tools, enabling service providers to react more
rapidly to changing market and technology conditions in building new service bundles and getting them into the
network quickly (Wilson, 2005).

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Interconnection Arrangements
As business models become more complicated, so do interconnection arrangements. This includes roaming
agreements and third party content provider contracts. With regards to third party content providers, who provide
services such as ringtones and music downloads, telcos can lose revenues when they cannot collect revenue from
the customer but still have to pay content provider for their services (Lucas, 2004).
The potential for leakage increases exponentially with proliferation of content offerings, the number of
suppliers, different arrangements and rapidly changing products. Reconciliation of data is important because as
data volumes increase, the risk of inaccuracy increases as well (Global Telecoms Business, 2006). Content owners
also need quality management at the BSS/OSS network level because if their content is delivered defective to
customers, their reputation is damaged as well. They will also seek more transparent reporting regarding
information such as subscriber uptake and impact of cross-platform marketing (Finegold, 2006). Revenue assurance
products are required in order to ensure that a telco’s revenue stream is properly disaggregated so that the
amount belonging to the telco and the amount owed to each third party content provider is allocated properly.
Problems occur for roaming contracts when international calls are made on the network and interconnection
fees are paid but that carrier does not actually have a roaming agreement with roamer’s home network and so
there is no way to recover the revenue for those calls (Wieland, 2005). Roaming revenue (about 10% of total
operator revenue) is very difficult to manage due to constant changes of contracts between countries, the high
volume of data traffic and the complexity of information transfer. However, the roaming business processes must
be accurate and up-to-date in order to protect roaming margins, which are already lowered by intense competition
(Ferrerira, 2006). Another problem that occurs with mobile networks involves prepaid cards because credit
deductions are not always done in real-time and customer can continue using the card even after they have
expired. Revenue assurance products should be able to address these issues in the future as well.
A key question many telcos are asking themselves is whether they should focus their revenue assurance
activities on their biggest current market (voice) or on growth area (IP-based content) which will generate greater
revenues in the future. BSS/OSS systems need to be able to reconcile information such as IP address, network
topology, data packets with billing schemes, pricing tables and information about customers. If flexible revenue
assurance procedures are not implemented now, it will be challenging to retro-fit them once problems occur
(Global Telecoms Business, 2007). The last section of this paper will discuss the future of revenue assurance.
Future of Revenue Assurance
The telecom industry is constantly changing making it more difficult to perform revenue assurance. However,
there are new developments such as the “revenue operations center” (ROC) for the CFO which is akin to the
network operations center to the CTO (Burkitt-Gray, 2006), IMS, which was described earlier, and key performance
indicators which will assist in stopping revenue leakage.

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Revenue Operations Center
It is not a product but a concept where different software solutions come together along with the people,
processes and hardware to form a facility whereby revenue integrity can be ensured through continually
automated tracking of KPIs (Milner, 2006). It can allow the telco to address abnormalities, process throughput
problems, and revenue leakage before they impact profit (Nicholson, 2008). The drive behind ROC is its focus on
financial performance versus the network and could show the impact of different departments on a product
thereby tracking operational efficiency across the entire organization, not just department by department. ROC can
monitor functions and resources in a company’s control and also those that are included in the supply chain, such
as content providers and other third party resources (Gerwig, 2008). Revenue assurance used to happen after the
event but now, given the competitive landscape and tight margins, it needs to be as real-time and proactive as
possible (Aginsky, 2006) which is where the ROC fits in the picture. Please refer to Appendix 4 for more details on
the ROC concept.
Key Performance Indicators
Due to the TM Forum, some operators have started benchmarking. When it used to be that no one wanted to
share their leakage information, now an industry standard can be specified (Global Telecoms Business, 2007). This
standardization of measuring leakage required because operators measure different ways. There are two types of
KPIs, the business ones such as average revenue per bill cycle and trending of bill revenue per geographical region,
and operational ones such as quality of service and CDR/IPDR volume tracking (Hankins, 2004). The TM Forum
requires corporate membership but once joined, a full list of KPIs can be assessed on their site.
Revenue Assurance Market
As ownership of services move from operators to third parties, the telco will become the medium whereby
these services are provided to the customers. Operators will spend less time on the development of products and
more time on the development of the infrastructure to support those products. This new generation of networks
means that operators are now just a bridge to all these services which means very low profit margins. This ensures
that revenue assurance function is going to grow ever more important (Global Telecoms Business, 2007).
As operators realize the value of a more holistic, enterprise-wide approach to revenue assurance, they are
looking for integrated platforms and frameworks which include not only software but also services that identify and
resolve problems and modify processes to minimize further leaks. Until recently, vendors offered only single-
purpose tools that solved an operator’s specific problem but with the advent of the ROC, it is predicted that once
the market stabilizes, takeovers will occur in the highly fragmented market, and vendors will be able to provide
more comprehensive solutions for their clients (Levine, 2005).
Conclusion
Revenue leakage will continue to increase due to the dynamic telecom environment; however, if companies
can implement a successful revenue assurance program, any revenues found internally will have an immediate

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impact on bottom line numbers. If not, telcos will be throwing away shareholders’ money and investors will price
this risk into valuations or will move elsewhere. Operators should make sure they are setting the right, flexible
technology to cope with current and future business and technological requirements in order to compete and
survive into the future.

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Appendix 1 – List of Revenue Assurance Providers
The auditor of a telecom company should be aware of the various vendors that their client may engage. This list is
taken directly from the Billing & OSS World directory of revenue assurance providers. Please refer to their website
at BillingWorld.com for more details.
Revenue Assurance Providers
Business intelligence Compliance monitoring Cost management Risk management
Accenture
Alliance Telecom Solutions
BusinessFusion Inc.
Comarch Information
Technology
CSG Systems
DataZA System International Ltd.
Element Customer Care
ENABIL Solutions
Equinox Information Systems
Focus On Telecom
Omniware Solutions Inc.
SDD
Subex Inc.
Tekno Telecom LLC
Vertek
Accenture
Comarch Information
Technology
DataZA System International
Ltd.
Focus On Telecom
Subex Inc.
Tekno Telecom LLC
Vertek
Accenture
Advanced Software Concepts
(ASC)
BusinessFusion Inc.
Comarch Information Technology
DCA Services Inc.
Focus On Telecom
SDD
Subex Inc.
TTI Telecom
Vertek
XINTEC SA
Accenture
Advanced Software Concepts
(ASC)
BusinessFusion Inc.
Comarch Information
Technology
Ltd.
ENABIL Solutions
Focus On Telecom
Subex Inc.
Vertek
Credit monitoring Fraud Interconnect billing Sarbanes-Oxley compliance
Accenture
BusinessFusion Inc.
Focus On Telecom
Fusion BPO Services Inc.
Subex Inc.
Vertek
XINTEC SA
Accenture
Comarch Information
Technology
Comptel Corp.
Ltd.
ENABIL Solutions
Focus On Telecom
SDD
Subex Inc.
Tekno Telecom LLC
XINTEC SA
Accenture
BusinessFusion Inc.
Cerillion Technologies
Comarch Information Technology
Communications Data Group
Comptel Corp.
CustomCall Data Systems
ENABIL Solutions
Focus On Telecom
FTS - Formula Telecom Solutions
Ltd.
Intec Billing
SDD
Subex Inc.
SunTec Business Solutions
Suntech
Tekno Telecom LLC
Vertek
Accenture
BusinessFusion Inc.
Comptel Corp.
Ltd.
Focus On Telecom
FTS - Formula Telecom
Solutions Ltd.
Intec Billing
MetraTech
Subex Inc.
Tekno Telecom LLC
Vertek

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Appendix 2 – Revenue Assurance Maturity Levels
Revenue Assurance Maturity Models (RAMMs) are useful as evaluative tools and can provide a company the basis
on how to set up their own revenue assurance program. The table below lists the details of the five phases of the
metamorphosis of a typical revenue assurance lifecycle. The practitioner can perform an evaluation of their client’s
revenue assurance maturity level and set audit risk accordingly.
The table is taken directly from the Billing & OSS World article, “Making Revenue Assurance Maturity Models
Practical.” Please refer to this article for more information.
The Five Stages of Maturity
Level 0 No revenue assurance practices, processes, policies or tools are in place.
Level 1 Basic revenue recovery consists of ad hoc, manual audits, generally driven by a small, voluntary team or
by individual efforts. Some revenue is recovered.
Level 2 Basic project and process management involving repeatable tasks is implemented. Point solutions are
installed to detect and correct certain types of revenue leakage. Business rules and audits are defined.
A project-level team is in place, but project prioritization remains best-guess.
Level 3 Revenue recovery shifts to revenue assurance, where greater automation is introduced to move from
auditing to continuous monitoring of revenue streams. Business rules for detecting and correcting
leakage are implemented systematically into existing processes. Teams are focused more on analysis
and correction than simple identification, driven by technology tools that help prioritize areas of
greatest leakage and potential ROI. Business analytics and dashboards are implemented to quantify and
forecast revenue assurance performance.
Level 4 Leakage is quantitatively understood and controlled. Formal processes and controls are in place.
Financial streams undergo regular, systematic analysis. Tools are expanded across the enterprise. An
expert revenue assurance team is in place, and it educates and builds participation with other product
and functional groups across the enterprise. Operational assurance metrics and dashboards track root
causes of leakage, rather than just leakage itself.
Level 5 Revenue assurance shifts to revenue management. Revenue assurance practices, processes and tools
are analyzed for performance and continuous improvement. The focus is on cross-functional, cross-
organizational efficiencies and communication. Tools and processes are enhanced to identify potential
problems and take preventive action. All new services are designed with revenue assurance controls
built in or factored in.

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Appendix 3 – Specific VoIP Issues
VoIP services produce many revenue assurance issues for telecom companies. Practitioners should be aware of
these issues when they are auditing their client. The following is a table of the main issues as summarized from the
Billing & OSS World article, “Top 10 Revenue Assurance Problems with VoIP.” Please refer to this article for more
information.
Top 10 Revenue Assurance Problems with VoIP
1 It's More Than Just
Switch-to-Bill
For VoIP, the RA model will have to be network-to-bill; scattered network elements
need to be collected and into a next generation, more complex mediation systems,
rating engine and billing system.
2 Order-to-Network
management
A bundled package is ordered and delivered; however, some services weren't
received by the customer so they are not willing to pay that portion of the fee. How
does the network know what was missing and how does collections account for this?
3 Order-to-collections Also known as fraud and credit management; user authentication in a VoIP mobile
setting is weak plus user self-provisioning, unauthorized Wi-Fi access.
4 Access charges "VoIP currently does not pay access charges to terminating carriers; but once this
loophole is closed, the terminating carrier will charge at the highest rate, as is done
today for terminating traffic with calls that lack origination information. A future
potential for fraud is that if a VoIP phone is cloned and calls made, the company will
have no revenue but a large access charges bill.”
5 Taxes VoIP is not currently taxed but once the government starts, a RA issues arises
because the provider won't be able to accurately determine whether traffic is
intrastate or interstate because of the VoIP non-geographically based phone
number. It is a lose-lose situation if taxes cannot be calculated correctly (i.e. the
government will be after the company if undercharging but if overcharging,
customers may launch a class-action lawsuit).
6 IP-based content
trading partners
If end users do not pay for the services (either intentional or because they didn't
order it or the QoS was poor), the company still has to pay the content provider and
incur the expenses from customer service calls and collection calls.
7 Enterprise market Large billings with corporate customers will abound with the proliferation of IP-
based services.
8 Sarbanes-Oxley CEOs/CFOs must certify to the integrity of internal controls (i.e. the billing systems);
RA will become an issue if companies start charging VoIP services by usage instead of
today's flat-fees, auditing the elements from network-to-bill will be difficult and
expensive.
9 Regulation VoIP regulation uncertainties related to E-911 and CALEA mandates.
10 Rush to market Revenue assurance problems are more difficult to solve after than before a new
product is launched.

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Appendix 4 – The Revenue Operations Center
The revenue operations center brings together different software solutions along with the people, processes and
hardware to form a facility whereby revenue integrity can be ensured through continually automated tracking of
KPIs. Auditors will have to obtain a section 5970 report from these third party vendors. The table below details the
various components of a typical center.
The table is taken directly from the Billing & OSS World article “ROC On: Creating the Revenue Operations Center to
Maximize Profit.” Please refer to this article for more information.
ROC consists of the following key functional areas:
Fraud management Monitor, detect, and correct unauthorized consumption of resources.
Risk Management Decreasing risk of subscriber default and other A/R issues.
Service Provisioning &
Inventory Assurance
Ensuring services are provisioned as required to meet subscriber commitments, that
fulfillment processes are accurate and efficient, and that resources are consumed and
documented with greater precision.
Usage Integrity
Assurance
Employing revenue assurance techniques to ensure service usage is properly accounted
for and reflected in a range of planning and operations management processes.
Billing Assurance Ensuring billing accurately represents all expected revenue and can be tied to resource
utilization to maximize the monetization of network resources.
Margin Management Tracking transaction-based costs and revenue to understand overall business
performance of individual products and services in order to identify other margin-
affecting and cost issues, such as out-payments, SLA penalty payments, customer
rebates, bad debt write-offs, etc.
Tracking and Analysis of
Data Collected
This framework must also have functions that can track and trend the data collected,
calculate thresholds and targets, mine for profitability profiles and KPI analysis and
tracking, and reporting and dashboard abilities tailored to the particular users' needs.

of 21
Glossary
Broadband - refers to data being transmitted where multiple pieces of data are sent simultaneously over a
telephone or cable line.
BSS (Business Support Systems) - this term refers to dealings with customers with activities such as taking orders,
processing bills, and collecting payments.
Bundling - a price discount promotion which prices together a number of different services which if subscribed to
separately would attract a higher price.
C-suite - This refers to the corporate titles conferred on individuals identifying their function within the
organization. Common titles are Chief Executive Officer (CEO) and Chief Financial Officer (CFO).
CDRs - records of telephone exchanges made on the network, including call start time, duration of the call, and
receiving and calling number along with other information required for the company to properly bill the customer.
Churning - describes customer loss; the different types of churn are voluntary, involuntary and internal.
Interconnection - the physical linking of a carrier’s network with that of other carriers in order to exchange traffic.
IPDRs (IP Detail Records) - provides information about IP-based service usage that can be used by the BSS/OSS
billing systems to charge customers for services rendered.
IMS (IP Multimedia Subsystem) - architectural framework for delivering IP multimedia to mobile users.
KPIs (Key Performance Indicators) - financial and non-financial metrics used to help an organization define and
measure progress toward organizational goals.
Mediation systems - converts CDRs and IPDRs into a data type that is usable by the billing systems.
OSS (Operations Support Systems) - computer systems used by telecommunications service providers to describes
functions dealing with the telecom network itself, such as configuring network components and managing faults.
Phantom traffic - unidentifiable and un-billable network traffic sent to a carrier that lacks information to identify
the originating carrier.
SubexAzure – it is now called just Subex; it is an information technology company providing BSS/OSS and fraud
management solutions for telecom operators. They commission an annual revenue leakage survey called “Global
Operator Attitudes to Revenue Management Survey.”
Test calls - is a revenue assurance technique that replicates events on a teleco’s network to identify potential
revenue leakage areas.
TM (TeleManagement) Forum – this is the telecommunications industry’s association of web and media companies
focused on end-end service management.

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Trending – a technique used for comparing summary value of data element over specified period of time. Amount
of change is statistically evaluated to determine normal ranges with abnormal results scrutinized for possible
process or content errors.
VoIP (Voice-over Internet Protocol) - a protocol optimized for the transmission of voice through the internet.

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