A recent report from Juniper Research (News - Alert) shows that the mobile telecoms industry lost more than $58 billion last year – over 6 percent of global revenues – due to inadequate Fraud Management (FM) and Revenue Assurance (RA) processes.  

The report entitled, “Mobile Revenue Assurance & Fraud Management: Business Strategies & Forecasts 2012-2016,” suggests that under a worst case scenario if operators fail to implement any remedial measures over the next five years, the scale of losses could rise five-fold by 2016.

As operators have been obliged to integrate a growing 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 unable to accurately 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.

According to the report, operators can minimize the outflows resulting from next-generation connectivity by using automated system solutions that provide end-to-end visibility of the revenue chain. With sustained investment, leakage will decline to four percent of revenue in 2016, representing a net reduction of nearly $15 billion per annum compared with 2011.

Report co-author Dr. Windsor Holden said, “As the industry moves more aggressively into a 4G/LTE (News - Alert) 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 show that revenue leakages will continue to be relatively higher in developing regions particularly in Africa & the Middle East, and 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.

Juniper Research was founded in 2001 by Wireless Industry Consultant Tony Crabtree, in the midst of the telecoms and dot-com crash. Juniper specializes in identifying and appraising new high growth market sectors within the mobile ecosystem.