Prepaid Billing Revenue Assurance

Billing Systems

Billing systems are the central hub of a Telcos revenue generation activity. It connects all the services provided by the Telco, with the customer usage of those services. Telco billing systems have typically lagged behind service innovation, resulting in either no billing or poorly constructed billing frameworks. This makes the billing system a central candidate for revenue leakage.

Prepaid Assurance

The prepaid business model works contrary to standard telecommunications approach to tracking and billing revenues.

This makes revenue assurance for prepaid services extremely challenging, yet profitable for most Telcos.

Revenue assurance for prepaid services can include:

Assurance on physical distribution of prepaid cards and vouchers – this is historically a very high fraud area
Assurance on IN operations
CDR reconciliation – of the MSC and IN

Prepaid Revenue Management Process

The prepaid revenue management process works in reverse to the postpaid service, and includes three additional elements.

Customers pay prior to use of the service. This reduces the risk of not being paid, but increases the complexity of revenue realisation.

The process includes the production, retail and management of stored value vouchers, which historically have been subject to high levels of theft.

Gaining payment from third party retail distribution channels. This aligns with cash flow risks associated with post-paid.

Providing assurance on the distribution and management of vouchers is a process that is best borrowed from the retail industry. Retails have been buying and distributing small items of high value for many years. Some of the techniques employed to assure this revenue stream include:

Inventory and Distribution Management Systems- these systems are created to track vouchers across their entire lifecycle, from creation, purchase, distribution until their ultimate activation by the customer. This type of inventory management can provide an incredible increase in confidence regarding voucher management, and has resulted in the identification of many leakage points for customers in the past
Voucher Tracking and Audit- many times, organizations need the help of an outsider, to simply review their voucher management operations, and determine if there is a problem or not. In order to accomplish this, the auditor needs to understand how the entire voucher management process works, and where the weaknesses and vulnerabilities in that process might be.

Intelligent Network [IN] Assurance

Telco Intelligent Network Revenue Assurance

Prepaid operations present unique challenges for RA analysts.

Normal post-paid CDR mediation check & reconciliation process is bypassed by the intelligent network.

Instead, accounting operations are executed in real time by a system with no manual intervention possible. It is essential to ensure that this software is functioning properly.

IN Assurance Activities

In addition to checking CDRs, there are several levels of assurance required to assure the correct operation of the IN. The biggest vulnerabilities in the operation of the IN include:

Internal fraud - employees entering invalid vouchers, or programmatically altering voucher balances.
Programming errors - fail to accurately decrement the voucher database

Methods of IN assurance include:

Voucher Balance Reports - a snapshot of starting balances for all customers at a specified time [daily, weekly, or monthly] plus reports on all of the additions voucher balances, keeping track of all decrements made against these balances. This reduces both fraud and program error.
Customer Audit Reports- same kind of reporting as voucher balance reports but on an individual customer basis.
Test Calls – using selected accounts and specific phone calls to predetermined phone numbers, of predetermined duration. The voucher management database is reviewed to ensure the appropriate accounting occurred within the system

Reconciliation of MSC and IN [CDR Reconciliation]

The only way to ensure that all customer calls are accurately accounted for the IN is by reconciliation of the CDRs created by the MSC against the CDRs generated by the IN.

This can be done by modifying the process to establish a mediation feed that will identify, filter and prepare all of the prepaid CDRs coming from the MSC. Note: many network managers disable the generation of CDRs at the switch in order to minimize CDR traffic. Hence, it will be required to establish a limited number of feeds, for a limited period of time to generate sufficient input for the required reconciliation.

Establish an IN CDR feed for a limited time period
Create parallel databases - one to store IN CDRs and another to store MSC CDRs
Create a set of reconciliation reports to compare the two sources, and identify any discrepencies

NEXT: Fraud Assurance