Revenue leakage high in Africa

BUSINESS

A new report from Juniper Research has found that mobile network operators face losing nearly one-quarter of revenues – nearly USD300 billion – to a combination of fraud and billing error by 2016.

However, it argues that through the implementation of revenue assurance and fraud management solutions, network operators will be able to substantially reduce the scale of potential global leakage by more than USD250 billion by that time.

The report, ‘Mobile Revenue Assurance & Fraud Management: Business Strategies & Forecasts 2012-2016,’ found that as the level of billable events has increased – operator-billed revenues totalled more than USD900 billion last year – networks have in turn experienced an upsurge in leakage across the revenue cycle from sales to network configuration, rating, and billing.

The report notes that while such leakages are often the result of system error – ranging from incorrect billing to chargeable call records not being transmitted to the billing system for rating and charging – networks are also experiencing a sharp rise in fraudulent activity.

According to the report, revenue leakage levels are currently highest in the Africa and Middle East, where there are particularly high rates of interconnect bypass fraud (under which fraudsters avoid paying call termination fees) and SIM cloning.

However, according to report co-author Dr Windsor Holden, the introduction of a more formalised risk management approach will significantly alleviate these issues. “By consolidating and automating its operational processes, the MNO can establish 360 degree visibility of the complete revenue chain in order to detect hidden losses or fraudulent activity rapidly. What is required is a combination of real time analytics and proactive business intelligence,” he said.