financial assurance in the global telecommunications marketplace

Optimizing the Bottom Line

Financial Assurance in the Global Telecommunications Marketplace

Troy Morley– Operations & Monetization (O&M) Strategy Analyst

Stratecast | Frost & Sullivan

Analyst Briefing Presentation10:00 a.m. EDT – October 15, 2014

© 2014 Stratecast | Frost & Sullivan, all rights reserved.

Proprietary and Confidential to Stratecast.

Abstract

�Financial Assurance—Given the continued global adoption of Smartphones and mobile devices, one could envy the financial position of Communication Service Providers (CSPs). However, market saturation in many areas is pushing prices down—reducing revenues—while network and other costs continue to increase to support all these new data-hungry devices. This briefing will focus on the monetization tools suppliers are offering global CSPs in the segment Stratecast refers to as Financial Assurance.

�Key Questions:

• What is Financial Assurance?

• Isn’t Revenue Assurance old-school?

• Are we still dealing with fraud?

• How do we optimize our bottom line?



Today’s Presenter

�Stratecast focuses on the business strategies of the communications industry. Mr. Morley examines the Monetization (BSS) market in the Operations & Monetization (OSS/BSS) practice, and has done so for nearly a decade.

�He has authored or co-authored over 75 publications concerning problems relative to the O&M marketplace. He covers the Monetization functions, including Financial Assurance (Revenue Assurance, Fraud Management, Margin Assurance) and Billing (Mediation, Rating & Charging, Core Billing, Policy Management, Interconnect & Settlement, Partner Management).

Troy Morley – Strategy Analyst Operations & Monetization (O&M) Global

Strategy PracticeStratecast | Frost & Sullivan



Agenda

�What is Financial Assurance? Where did it come from?

�What is the state of this market and where is it going?

�What was that about optimizing our bottom line?



Revenue Assurance:

Stop Revenue Leakage;Internally & Externally

Revenue Recovery

Revenue Verification; Internally & Externally

Revenue Assurance

$$

$ $$

Revenue Assurance• An essential function in CSPs for decades, but leaks

continue to occur• Continual change to networks and O&M, as well

as new services and partnerships• With change comes the risk of new leaks, so Revenue

Assurance is never “done”• For “mature” CSPs, leakage may be less than 1% of

revenue, while less mature CSPs may have leakage greater than 5% or even 10%

• Regardless, even the most optimistic estimates of global leakage are in the tens of billions of dollars, with less than half of that ever recovered.



Fraud Management

Fraud Management:

Stop Fraudulent Use; Internally & Externally

A Form of Cost Assurance

Fraud Management:• Also been around for decades• Types of fraud continually evolving, requiring both an

automated means to detect and mitigate AND cooperation within the industry

• Communications Fraud Control Association (CFCA) fraud loss estimates for 2013:

• 2% of revenues• $46.3 billion



Margin Assurance

Margin Assurance:

• New area, brought about by advances in analytics technology: Real-time or near Real-time, Purpose-Built Analytics

• (Profit) Margin = (Revenue – Cost) / Revenue• Increase Revenue, Decrease Cost = Optimized Margin• Revenue Assurance � Increase Revenue• Fraud Management � Decrease Cost• Margin Assurance: Analytics to Increase Revenue, Decrease Costs, Optimize Margins

• No “standard” set of functionality

Margin Assurance:

Fuzzy Middle Ground;

Increase Revenue, Decrease Cost, Optimize Margin



Revenue Assurance:

Stop Revenue Leakage;Internally & Externally

Revenue Recovery

Revenue Verification; Internally & Externally

Financial Assurance

Business, Networks, and Supplier Operations

Cross Functional Purpose-Built Analytics

Data Management Platform

User & Platform Management

Process & Workflow Mgmt

Data Acquisition & Management

Trend & Pattern Recognition

Reporting & Data Visualization

Fraud Management:

Stop Fraudulent Use; Internally & Externally

A Form of Cost Assurance

Margin Assurance:

Fuzzy Middle Ground;

Increase Revenue, Decrease Cost, Optimize Margin



Agenda






The Financial Assurance Market and Where it is Going

Almost 30 Global Revenue

Assurance Suppliers

Almost 20 Global Margin

Assurance Suppliers

Almost 30 Global Fraud Management

Suppliers

Over 30 Global Financial Assurance

Suppliers



Communications Industry – Business Model of Yesterday (and Today)

While the network remains important today, the key is using technology and the network to provide customers a positive experience. This means doing business differently than

in the past. It means using customer insight effectively in a new business paradigm.

Our Connected

World

Fixed-Line

MobileIP �Voice�MMS / SMS

�2.5G Data (GPRS/EDGE)�3 G Data (UMTS)�3.5G Data (HSPA)�4G Data (LTE)

Mobile�Routers�Switches�Databases

IP

�Voice�Broadband DSL

�Cable

Fixed-Line

Network TechnologySource: TAM, TMF GB929

Fulfillment Assurance Billing

Customer Management

Service Management

Resource Management

Supplier/Partner Management

Enterprise Management

Product Management

Market/Sales Management

OSS / BSS

• Consumers• Small Medium Business

• Enterprise

• Fixed-line Voice• Mobile

• Broadband Data

Focus on Customers

Focus on Technology



Market Changes Have Created Today’s New Business Reality

Convergence of these drivers and other market changes are creating a completely new business landscape, one that requires a reexamination of the role that the monetization

and customer insight processes play today and for which they will play in the future.



A View of the Old Model



New Business Models – Real-Time Wholesale and Retail Business Accountability



Change = Opportunity

• Change will Increase Opportunities for Revenue Leakage and Fraud

• Change will Increase Pressure on CSP Margins

• Change will Increase Opportunitiesfor Financial Assurance Suppliers

• Stratecast Forecasts Through 2018:• Strong Growth for Revenue Assurance• Strong Growth for Fraud Management• Very Strong Growth for Margin

Assurance



Agenda






Some Examples of Margin Assurance Solutions



Financial Assurance: Tools to Optimize the Bottom Line

Financial Assurance = Revenue Assurance + Fraud Management + Margin Assurance• Increase Revenue, Decrease Cost = Optimized Margin• Revenue Assurance � Increase Revenue• Fraud Management � Decrease Cost• Margin Assurance � Increase Revenue, Decrease Cost



Next Steps

Develop Your Visionary and Innovative SkillsGrowth Partnership Service Share your growth thought leadership and ideas or

join our GIL Global Community

Join our GIL Community NewsletterKeep abreast of innovative growth opportunities

Phone: 1-877-GOFROST (463-7678) Email: [email protected]



Your Feedback is Important to Us

Growth Forecasts?

Competitive Structure?

Emerging Trends?

Strategic Recommendations?

Other?

Please inform us by “Rating” this presentation.

What would you like to see from Frost & Sullivan?



https://twitter.com/FS_ITVision

Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, and Twitter

http://www.facebook.com/FrostandSullivan

https://www.linkedin.com/groups/Future-Growth-Opportunities-in-ICT-4876870

http://www.slideshare.net/FrostandSullivan



Questions and Answers



Contact Details

financial assurance in the global telecommunications marketplace

Technology

financial assurance

globalfinancial assurance

linefinancial assurance

segment stratecast

financial assurancegiven

policy management

global leakage

monetization bss market