Risky Business - Article in Total Telecom Plus by Alun Lewis

Operators have risk assessment strategies and tools in place, but as they are forced to diversify they are in danger of not managing risk across the organisation.

Telecoms service providers still are failing to take an overarching view of risk assessment and management, leading to revenue losses and customer dissatisfaction. rapid diversification, as service providers increasingly are driven to partner with application and content companies and open up their core infrastructure and systems, as well as growth into areas such as mobile money, M2M and cloud services, are increasing operators’ exposure to risk.

Industry organisations are developing methodologies to try to unravel and quantify the many elements of risk and develop standardised models (see box). But by focusing on specific areas many operators are missing the big picture and the gaps that exist in their current risk management activities.

Assessing the level of risk is the first step towards putting a successful plan in place. “The spend on risk management in telecoms—including revenue assurance, fraud and margin management—is estimated to be around $700 million in 2011 and growing at around 4%–5% each year,” says Anandan Jayaraman, chief product and marketing officer at revenue management specialist Connectiva. “with the tight budgets that service providers have to operate under these days, it’s essential that some form of triage is carried out to focus on those risks that will have the most impact and that are resolvable through the intelligent use of tools and teams.”

Jayaraman believes that it’s possible to break risks down into a 4x4 matrix according to frequency and impact. “There may be problems with calling rate plan configurations that are high frequency but have a relatively low impact on the overall business,” he says. “There may be relatively low frequency activities involving fraud, and here service providers can use tools to drill into the large data sets involved to find anomalous behaviours and carry out appropriate correlations to identify offenders. While you need to have operational teams focused on these issues, you also need more analytically minded teams with a broader remit to anticipate [unexpected] vulnerabilities.”

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About Connectiva Systems

Connectiva Systems is a subscriber data monetization software company whose analytics solutions enable telecom, media and utility companies reduce revenue leakage, minimize fraud, lower churn, improve operational effectiveness and increase overall profitability.

Leading global service providers ranging from 2 million to 100+ million subscribers and in a variety of segments across mobile, cable, wireline and business services have partnered with Connectiva to realize more than $500 million in value. Connectiva has won numerous awards and has been consistently recognized as a thought leader in telecom analytics.

Headquartered in New York City, the company is privately held and has offices in Bonn, Dubai, Kolkata, Kuala Lumpur, Lagos, London, Manama, Mexico City and New Delhi.