Friday, 30 March 2012 02:06

Mobile telecoms lose $58 billion due to fraud management deficiencies: report

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A global report on the mobile telecoms industry has found that the industry lost more than $58 billion last year, or over six percent of its revenues, due to inadequate fraud management and revenue assurance processes.

In its report on the industry, Juniper Research suggests that, under a 'nightmare scenario' whereby operators fail to implement any remedial measures over the next five years, the scale of losses could rise five-fold by 2016.

According to report co-author Dr Windsor Holden, the survey of the mobile telecoms industry found that, as operators have been obliged to integrate an ever-expanding array of devices  and to simultaneously manage a surge in cellular network traffic, billing systems have failed to keep pace.

As a result, Dr Holden says, companies in the industry are increasingly unable to 'accurately or efficiently capture the large volume of transactions that occur on the network.'  'The complexity has magnified the scale of revenue loss, resulting in bad debts and a greater opportunity for fraud,' Dr Holden adds.

The report, however, recommends that operators can minimise the outflows resulting from next-generation connectivity by implementing automated system solutions that provide end-to-end visibility of the revenue chain. With sustained investment, the report finds that leakage will decline to four percent of revenue in 2016, representing a net reduction of nearly $15 billion per annum compared with 2011.

According to Dr Holden, as the industry moves more aggressively into a 4G/LTE environment, telcos risk 'undermining any revenue actually earned from value-added services by continuing to not invest in appropriate business support systems,' adding that despite their initial costs, 'RA and FM systems demonstrate a strong case for return on investment.'

Juniper's report reveals other key findings, including:

'¢    Revenue leakages will continue to be relatively higher in developing regions, particularly in Africa & the Middle East

'¢    Solutions are exploiting a single repository of data to reduce TCO (Total Cost of Ownership) and are integrating a number of complementary applications as the industry moves towards Business Assurance.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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