Proof Before You Buy

There are still many telcos who buy revenue assurance software without proving that the software can be made to work (and deliver some value) first. No matter how rigorous a competitive tender process is, there is no substitute for a proof of concept. Any reliable vendor will be happy to show that their product really can be made to work for the potential customer. Although the software will be implemented for only a limited scenario and for a limited period of time, there is no better way to confirm the effectiveness of the revenue assurance product. It also shows that the vendor's staff have the necessary technical and management skills to realize success. Best of all, it gives the customer an insight into what the eventual financial benefits will be. But a proof of concept is not just of benefit to the customer. A proof of concept also helps the vendor. It gives the vendor a heads-up on how easy it will be to work with the customer's staff and to integrate systems in practice. Telco staff who are unhelpful, or who have limited knowledge, will probably lead to a more extended deployment project, pushing the vendor's costs up. Good vendors have no reason to resist delivering a proof of concept prior to signing a deal; only poor vendors will want to rush to the sale and avoid a proof of concept. My old mate Guy Howie of BIAAS has been working double-time recently, backing up my thesis that good vendors will want to validate their product through a proof of concept. BIAAS has completed twelve - a round dozen - proofs of concept in recent weeks. At that rate, it cannot be long before the rest of us have nothing left to prove... ;)

Subex To Launch User Forum

The problem with online forums is that most people do not treat them like forums for discussion. Instead, they treat them as a free way to get somebody else to do their work/thinking for them. For every hundred people who ask a question, there is maybe one person who has both the knowledge and inclination to answer a question, which leads to rather one-sided discussion. You know the kind of thing: "can anyone advise how to do such and such?"; "we are doing this project, can anybody send me documents of similar project they did?"; and "please send me any work you have done so I can give you no credit and pretend to my boss that I did it in order to secure a pay rise". One suspects that the Romans would not have had much of an empire if the discussions at the Roman Forum had been so lackluster.

One-sided conversations tend to be the problem if people are expected to take time answering questions out of sheer generosity. If, however, the person answering the questions is being paid to do so, you can expect there to be a lot more answers. Why pay someone to answer questions? One good reason would be to strengthen the relationship between a vendor and its customers. For "strengthen the relationship" you may also substitute the words "reduce the risk that the customer will look - and pay - for advice from elsewhere". Which must be exactly the thinking behind Subex's latest venture: an online forum for its users.

Subex has announced they will launch their user forum in March. Doubtless the forum will be a cost-effective way of dealing with queries about how to use their software, reducing some of the burden of dealing with telephone inquiries. But it is also a great way of persuading customers to turn to Subex for any other advice they may need, even if it does not relate to software they have already purchased. Any software business knows that whilst revenues for software might be high and relatively predictable, you can really boost margins by adding some consulting sales on top. Of course, customers are wary of getting advice from people with a reason to recommend more software as the solution to every problem. But Subex can guess that for every hundred questions they answer, one will evolve into a consulting sale. If the money goes to Subex, and not to another firm, then the forum will be a smart way to augment their business. My money says you can anticipate that other vendors will soon follow Subex's lead by setting up their own forums.

Oil Leaks and Revenue Leaks

As well as discussing telecoms revenue assurance, I seem to have an occasional series of posts about how revenue assurance has become a phrase used to represent similar activities in quite different industries. Previous posts have identified airlines, banks and even governments as unexpected converts to the revenue assurance philosophy. Now we can add the oil industry. According to this article from Oil Online, revenue assurance can be applied "from wellhead to sales points". I guess that might be the oil equivalent of from switch to bill... ;)

Brunei Water Bills In Error

New billing systems, incorrect bills. It is a familiar story, across many countries and many industries. Here is yet another example, this time from the water utility in Brunei.

Is There A Need To Regulate Billing Accuracy?

The UK has spent the last 12 months or so (I lose track because these things take so long) reviewing the UK regulations for billing accuracy. As a result, a regulation that used to be written as a long document looks set to become a regulation written as a very long document. What stands out, though, is not the alterations to the UK approach, which in the end have been minor, but how different the approach of the UK is to almost every other country. In short, intervention to audit and prove metering and billing accuracy is the exception, and not the norm. Furthermore, national regulations for telecoms retail billing accuracy rarely need to be backed by legal force. Germany and India have taken a stance that is based on classic regulatory intervention, of imposing rules because the industry cannot be trusted to manage itself. In contrast, Australia's approach is based on a cooperative agreement that was created by the industry without waiting for the regulator to prod them into action. In Hong Kong a mandatory regulation lasted just a few years and then was dropped, to be replaced by a completely voluntary code in 2006. The Hong Kong regulator, OFTA, justified this in a statment in December 2005 which said:


"OFTA has been monitoring consumers’ complaints in respect of the services provided by various telecommunications operators and providers... Among the cases that complainants requested OFTA to intervene or investigate, only 15% were related to billing disputes. Further examination revealed that those related to billing and metering inaccuracies occupied only an insignificant portion of these disputes."

The conclusion seems pretty final. In Hong Kong, mandatory auditing is unnecessary because the number of issues are trivial. In contrast, the UK continues to act like mandatory auditing is essential for customer protection. Hong Kong copied their mandatory code from the UK's, after taking advice from the UK's former monopoly auditor for metering and billing, BABT. We are confronted with two improbable scenarios: (1) that both regulators have got the balance right, because UK telcos are inherently bad, and HK telcos are inherently good, or that (2) one of the regulators has got the balance wrong. Given that the UK stands in relative isolation in requiring mandatory audits, and that HK tried mandatory audits but concluded they were not necessary, I think national regulators like the UK's Ofcom need to do a better job of explaining why regulatory intervention is necessary when other regulators see no need.

Tecore Enter Simbox Detection Market

News from the Mobile World Congress is that Tecore Networks, the mobile networks vendor, has launched a new simbox detection product. For a quick briefing on simboxes and mobile gateway fraud, take a look here. Entering the fraud detection and prevention market is an interesting departure for Tecore, but it makes sense. Mobile gateways are a problem worldwide. Even in Western countries simbox use can fall into legal gray areas, making it hard to take action against the seemingly legitimate businesses that use them to siphon revenues away from network operators. There is obvious potential to further exploit simboxes in the developing countries that are Tecore's focus. Because simboxes are used by service providers to undercut the prices of their competitors, they might aid the rapid growth of mobile phone use in the developing world. However, the short term benefits to consumers must be offset against the loss of revenue to the builders and owners of mobile network infrastructure, which in turn means further network deployment will be slowed. In the long run, that is not good for providers, customers or the economies of the countries where they live.

Resell Your Cell

So you craved a new iPhone and eventually succumbed to temptation. What should you do with last year's must-have cellphone, now gathering dust in your desk drawer?

1) Never, Ever, Throw Your Cellphone Into The Trash

Cellphones contain a whole lot of good stuff (from a recycling point of view) and nasty stuff (as far as mother earth is concerned). Instead of throwing the phone into the garbage, find another way to dispose of it. Here are some of the ingredients that went into your cellphone: lead, beryllium, tantalum, arsenic, copper and... brominated flame retardants (gulp). I will leave it to your imagination to work out which can be recycled and which are best not dumped in a landfill!

2) Sell To A Specialist Business

A lot of businesses have emerged that are willing to buy old cellphones. These business aim to refurbish and resell the phone, often to customers in the developing world. Most will give you a quote on-line, and you get paid when they receive the phone through the mail. Chances are you will get the best price for your old phone by shopping around these businesses. Some of the better-known firms in the USA are:

There are many many more sites, most with names that are variations on the buy/sell-my/your-cell/phone.com theme. If you want the most cash, then get on the web and be prepared to click around for the best deal. But be realistic - a phone that was cheap when you got it five years ago is not going to become more valuable over time. This is why most people end up saving themselves the trouble of selling a phone for a couple of bucks and instead opt to...

3) Give To Charity

Many worthy causes have linked up with commercial operations, turning the donation of an old cellphone into an act of charity. Here are a few varied examples focusing on the USA. There are many other charities and not-for-profit organizations that have similar schemes.


  • CollectiveGood http://www.collectivegood.com will recycle phones and provide donations to the charity of your choice. Many charities with phone recycling schemes have CollectiveGood as their logistical partner. Phones can be posted directly or dropped off at Staples and Fedex/Kinkos stores.

  • Recellular have a similar program to CollectiveGood where donated phones result in charitable donations.

  • Ecophones http://www.ecophones.com partners organizations like schools so they can use phone recycling as a way to raise funds. Ecophones pays for every phone, even if it is broken, and offer free collection as an alternative to free postage.

  • The Dian Fossey Gorilla Fund http://www.gorillafund.org/conservation/fieldnews_item.php?recordID=16 uses the money raised from recycled phones to protect Gorillas. Recycling is doubly beneficial as the mining of ores used in phone manufacture has destroyed the natural habitat of some gorillas.

  • Call To Protect http://www.wirelessfoundation.org/CalltoProtect provide refurbished phones to victims of domestic violence for use as an emergency lifeline. Other phones are sold and the proceeds used for educational programs to counter violence in the home.

4) eBay

Did you read what I said above about being realistic? If you are one of those people who must always have the latest super-duper gadgets, then you can make good money reselling all your not-quite-latest super-duper gadgets on eBay. The rest of you might as well just sell it direct to a business unless you happen to have business connections in Brazil or Bulgaria, because the chances of finding an interested customer will not be great.
To successfully sell on eBay, the key thing is offer a handset that is still new enough, and still fancy enough, that somebody will regard it as a premium toy to play with it. So the device must be high-end and probably no more than 18 months old. If you offer a device with functionality that has already entered the middle or low-end product ranges of major manufacturers, your chances of making more money via eBay are reduced. Also consider if your phone had a good reputation and is well-liked. If user reviews were terrible when the handset first came out, chances are there will be nobody searching to buy one second-hand a year later. But particular manufacturers and devices will attract strange cult followings that will boost the resell value. For example, anything made by Apple can be assumed to beat the averages. But if your phone is dated, scratched, and does what everybody else's does, forget about it. Saying all that, you may want to ignore what I say because there are plenty of chumps out there...

By the way, never ever buy a device in the expectation you can make good money from selling it after you have used it. First, just opening the box knocks 40% off the value. If you are like me, you will have dropped, scratched, bashed and chipped the device plenty enough to account for the remaining 60%. Second, you cannot tell what will be fashionable, and what will be unfashionable, by the time you sell the device. Whilst some selling points continue to appeal years later, others make a big bang and disappear soon after. I bought one of the first WAP-enabled phones - enough said? Finally, if the phone does retain significant value, it must be because it retains novelty or rarity value. So the phone must be made in relatively small numbers compared to demand, and rival manufacturers must never produce good alternatives. If that is true, it is very likely that you paid a premium to buy the phone in the first place. Selling the phone later on just means recouping some of the premium you paid at the outset. So buying to resell is not good economic sense. You are better off buying a phone you like and assuming that once the money is spent you will never get it back. Anything you do get back is a bonus, either for you or your charity.

5) Give To A Friend

Your phone is unlocked, it is pretty new, and you want to do something good for the environment. Why not give it to a friend or family member? Remember that the manufacture of new phones leads to the mining of precious minerals. It also takes energy to make the handset, and then to transport it. If you sell the handset, more energy is spent on transporting it. All of that could be saved, lowering your carbon footprint. There may be someone you know who is considering getting a new phone. Instead of encouraging them to buy yet another new phone, which will probably end up gathering dust in a drawer in a few years' time, think of the environment and encourage them to use one of the spare handsets you own. Recycling can begin at home! Giving a second-hand gift may not seem very generous, but if it saves the earth your friends and family may appreciate the thought.

6) And Finally

Do delete the contents of your phone's memory before you sell it or give it away. Most recycling outfits will blank the memory of phones as part of the refurbishment process, but there is no reason to take chances. Your contact numbers are unlikely to be as desirable to the paparazzi as Paris Hilton's, but somebody out there may want them. Numbers used to be saved to SIMs, but these days the device itself tends to store numbers and a whole lot more, so be thorough about blanking the device's memory before your recycle. Details like phone numbers, addresses, emails, and possibly far more, depending on how sophisticated your device is, can be a boon to criminals involved in identity theft. Got a few pictures of you stored on the memory? Best to delete those too before somebody decides to pretend to be you on the internet. People store all sorts of data on their phones. Criminals realize that details like the names of your children or the date of birth of your spouse may also serve as your passwords. And your friends will not appreciate it if their numbers get in to the wrong hands, leading to prank or abusive calls. If nothing else, people often forget to back up information and then regret it later, so be methodical about ensuring you copy all the data you need and delete it from the phone as you do. There are plenty of dubious people out there, so take no chances!

Blog Competition

Blogs about revenue assurance? This is not the only one. Be sure to check out Dr. Gadi Solotorevsky's new blog at http://ra-blog.org/. Gadi may work for cVidya, the software vendor, but the content is thankfully marketing free.

Digicel Buys ECtel RA Solution

Digicel, the new kid on the block that is shaking up the mobile market in the Caribbean and Central America, has bought ECtel's RA solution for all 24 of its national operations. The implication is very straightforward: consolidated purchasing of revenue assurance technology is cost-effective for a geographically distributed group of telcos. Israeli vendor ECtel will doubtless have some technical challenges in tailoring their product to the different circumstances of each Digicel business unit. However, the cost of this is small compared to the wastage represented if each unit was to acquire or develop its own solutions. Standardization makes as much sense for revenue assurance as it does for the underlying OSS/BSS.

Rather teasingly, ECtel's press release states the proof of concept "identified substantial revenue losses". This implies the product may have already paid for itself. There is a less positive way of saying the same thing: Digicel did not know how much it money it was leaking, and could have found those leaks through a one-off audit. Unfortunately, without more details to substantiate this claim, we will never know...

cVidya Targets Dealer Commissions

There is a lot you can do if you have data and know what to do with it. Software firms that focus on revenue assurance come from a background of trying to generate high value from relatively low levels of investment in the mining of telco data. The potential for expanding beyond revenue assurance is obvious. Israeli firm cVidya are keeping pace in the race to diversify revenue assurance software into a wider range of products. Most recently, they launched a new product that allows mobile SPs to check the commissions paid to their dealers. Intra-business assurance is a new frontier that has yet to be fully exploited. Assurance departments have tended to have narrow remits oriented around retail or wholesale billing and settlement, but the principles equally apply to many other kinds of transactions with external parties.

The challenge for a business like cVidya is to broaden their sales pitch at a time when some quarters still doubt the value proposition behind core revenue assurance. That will not stop them trying. The Israeli firm has often demonstrated the happy knack of finding a USP that will resonate with customers. This article in Mobile Europe sees cVidya CEO Alon Aginsky trying to pull off the trick once again. If it works, you can expect cVidya's competitors to respond with their own push into dealer management.

Subex Losses Narrow

Subex, the revenue assurance vendor, has announced Q3 results with losses reduced from the previous quarter. Whilst the software giant based in Bangalore may have turned a corner, there is still a long way to go before the company's profit and loss statement returns to full health. Thanks in part to the acquisition of Syndesis, Subex's revenues have grown greatly, but so have costs. At the end of Q3 in 2005, personnel costs represented 45% of revenues. In 2006, the equivalent ratio was 59% and in 2007 personnel costs represent 72% of revenues. This has depressed margins. Other costs have also grown. Debt finance costs Subex thirteen times what it did in 2005. So whilst Subex is a much bigger business, it will need to severely slim its cost base if it is to generate strong cashflows and get EPS back to the levels enjoyed in previous years. Subex's shareholder presentation confirms that Syndesis integration is on track and that cost restructuring is being acheived. However, it is hard to tell if cost cutting will be enough. Whilst Subex is upbeat about its order pipeline, there is no indication in the data as to whether the competitive environment is improving or worsening. If Subex has reduced prices to secure its orders, then margins will be eroded at a fundamental level which cannot be easily compensated for through cost reduction. However, if competition is eroding margins, then Subex's competitors will be in the same boat. Subex at least has the right strategy for dealing with stormy weather. So long as it can keep cashflows on an even keel, building and diversifying its revenue streams is the right strategy.