Mobile Industry Lost over $58 billion in Revenue in 2011

1 min read Networks & Network Services
A new report from Juniper Research finds that the mobile telecoms industry lost more than $58 billion last year – over 6% of global revenues – due to inadequate FM (Fraud Management) and RA (Revenue Assurance) processes.

The report 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.

The report, ‘Mobile Revenue Assurance & Fraud Management: Business Strategies & Forecasts 2012-2016,’ finds 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, they 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.

However, the report 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 4% of revenue in 2016, representing a net reduction of nearly $15 billion per annum compared with 2011.

According to report co-author Dr Windsor 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. Despite their initial costs, RA and FM systems demonstrate a strong case for return on investment.’

Other key findings from the report include:

• 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.