Asia Pac telco industry leaks billions in revenue each year

The Asia Pacific telecommunications industry is missing out on between $US6 billion and $US12 billion in revenue each year, according to the latest PricewaterhouseCoopers Revenue Assurance Survey.

Luke Sayers, PwC Asia Pacific infocomms leader described the situation in terms of "revenue leakage" resulting from unconnected calls, unprofitable products, billing errors, uncollected accounts and fraud.

Twelve per cent of telcos surveyed believe that more than five per cent of their revenue is lost each year, while 33 per cent believe the figure to be between two and five per cent. A further 33 per cent of companies are not able to measure the amount of lost revenue each year.

Conducted in mid-2002 to gauge the level of revenue assurance in the telecom industry throughout Asia Pacific, PwC's Revenue Assurance Survey canvassed chief financial officers at 28 companies across 12 countries. These CFOs were from mobile and fixed line voice and data communication providers.

Some 71 per cent said they have some form of revenue assurance function in place, but only seven per cent believe their efforts have been successful. A further 20 per cent are unable to evaluate the success of their programs.

"Carriers are not measuring the results of their programs and aren't able to fully understand that an effective revenue assurance program can capture significant revenue and benefit shareholders," Sayers said.

One-third of executives surveyed consider billing operations to be the area of greatest revenue leakage, followed by ordering and activation (23 per cent), and network operations (17 per cent).

"The accuracy of billing processes continues to plague the industry, particularly in light of the increasing complexity and volume of product offerings," Sayers said.

"More than 50 per cent of executives surveyed are still using manual methods to check the accuracy of their tables, with only 36 per cent taking advantage of automated tools. Twelve per cent are simply neglecting to check the accuracy of their tables.

"Specialised and independent verification tools need to be implemented to tap into revenue leakage successfully in this area," Sayers said.

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