The global mobile industry lost over US$58 billion last year due to billing errors and fraud, with Africa and the Middle East worst hit according to new research
The report from Juniper Research, entitled ‘Mobile Revenue Assurance & Fraud Management: Business Strategies & Forecasts 2012-2016,’ found that mobile operators lost over six per cent of global revenues due to inadequate fraud management and revenue assurance (RA) processes.
In Africa and the Middle East, 15 per cent of revenue is lost annually, compared with one per cent and 2.8 per cent in Europe and North America respectively.
The report suggests that losses could rise five-fold by 2016 if operators fail to implement any remedial measures over the next five years.
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, according to the report.
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.
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 predicts that leakage will decline to four per cent of revenue in 2016, representing a net reduction of nearly US$15 billion per annum compared with 2011.
“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,” said report co-author Dr Windsor Holden. “Despite their initial costs, RA and FM systems demonstrate a strong case for return on investment.”
However, the report does predict that revenue leakages will continue to be higher in developing regions, particularly in Africa and the Middle East.
www.juniperresearch.com/reports/mobile_revenue_assurance_&_fraud_management
