Q4  2007

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The ATS Network & Billing Update is published by Advanced Technologies & Services, Inc. (www.atso.com), a revenue and service assurance solutions provider. This free newsletter is a guide to telecommunications OSS, billing, and revenue assurance news and other telecom industry analysis.  To unsubscribe, contribute an article, or for offbeat news, please scroll to the end. Feel free to forward this newsletter to your friends and co-workers!

In this issue:

	Where Else Can Revenue Assurance Go?
	Top Ten: Emerging Markets Carriers
	Survival Of The Fittest: CLECs battle brand recognition and increased consolidation
	OffBeat News: Cell Phone Service Will Find Toilets

Where Else Can Revenue Assurance Go?
By: Peter Mueller, VP of Operations, ATS

When we started ATS in 1996, the telecom world was still coming out of the post-divestiture doldrums and becoming ever-less-regulated. Until that point, carriers increased profitability by increasing rates. Why? Because profit margins were mostly targeted by Regulatory bodies and ‘maintained’ by rate increases. If a company got too lean, there was actually an incentive to spend more, so as to trigger a rate hike.

With lessening regulations, carriers in the late 90s were forced to look at true profit-and-loss statements for the first time, and worry that every single Call Record was finding a way to a bill. “Revenue Assurance”, as we know it, was born! Finding the extra 2-5% of revenues and having them fall straight to the bottom line often meant the difference between profit and loss, stock gains or not and budgets for capital improvement or not.

The next few years of RA (between 1999 and 2002) saw the market flooded with competitors as new capital chased anyone with a business plan. There’s not much else to write about what happened next, as we’ve heard it all before, but one day – BOOM – far fewer competitors were around.

Since 2004, we’ve seen some interesting trends. While the Bells worried about the CLEC-onslaught, they were somewhat outflanked by the VOIP providers and Cable companies. Their ‘penetration rates’ consequently dropped but their Average Revenue Per Unit steadily climbed as shown below:

How did this happen?  Well, they ‘locked in’ their best customers to triple-plays and bundled long-distance packages so that future drops in carrying LD traffic could be pocketed as profit.  So, today’s customer who buys a “Nationwide Calling Plan” might be spending more on a per-minute basis, yet still feel as if they’re getting a better deal.

So, let’s review.

Over the last 10 years, we’ve seen expansion, then implosion, of the number of competitors in Wireline space, followed by drastic changes in pricing plans (‘flat vs. per minute’) and culminating in an extended period of consolidation of the major Wireline carriers.   The surviving carriers are, as a result, competitive, nimble and profitable.  The RA question of the day is “Given this, what new challenges will RA be asked to tackle?”

We predict that Revenue Assurance will adapt to these trends in the following ways:

1. RA will soon add to its mandate:  Market Analysis, Customer Retention and Churn Management.
    
2. RA groups will inherit these mandates because, in the process of going after leakage for years, they’ve already done the following:
    
   1. Set up ‘data paths’ to several relevant billing, switching and call record sources.
   2. Developed internal, cross-department relationships spanning finance, network, billing and marketing.
   3. Become accustomed to P&L issues, once trends are presented in a quantitative fashion.  (Is Customer X becoming more/less profitable?)
       
3. RA vendors will fan out, adding these capabilities to their software suites.  (At ATS, we are already underway with something called “Market Watch.” Expect more details in future columns…)

To conclude, the traditional role of Revenue Assurance as “Revenue Leakage Identifier and Corrector” will continue as it always has --- as the ‘easiest’ way to increase corporate earnings since this type of revenue is usually ‘cost-free’.  However, given the increased sophistication of the marketplace, and of competitive tactics, the valiant groups that spearheaded ‘leakage prevention’ will be forced to reckon with new challenges as well.   We see these groups turning their necks towards the Marketing and Sales Departments over the next few years.  When they do, they’ll carry with them the alliances and experiences they’ve gained from Billing and Network to tackle some of the most challenging issues yet.  After all, preventing ‘leakage’ revenue from missing the bottom line and keeping customers’ revenues on the top line are, in the end, equally worthy goals. 

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Top Ten: Emerging Markets Carriers
Courtesy of Light Reading

The growth of telecom services in emerging markets has attracted the interest of the biggest worldwide carriers, all of them grappling with mature markets at home, including the likes of Vodafone Group plc (NYSE: VOD - message board), France Telecom SA (NYSE: FTE - message board), and Portugal Telecom SGPS SA (NYSE: PT - message board). But who is their competition? And which are the largest carriers operating solely in developing countries?

The table below shows the Top 10 emerging markets carriers by revenues (converted into U.S. dollars) for the six months to September 30. And from the links at the bottom of this page, you can read more about each carrier's size, scope, and competitive situation. But first, here's the Top 10 list:

Click Here for the full story

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Survival Of The Fittest: CLECs Battle Brand Recognition and Increased Consolidation
Courtesy of Telecom Magazine

Life’s never been easy if you’re a Competitive Local Exchange Carrier (CLEC). For one, there’s the brand recognition issue. My mother-in-law still thinks AT&T — or what used to be the legacy New England Telephone (now Verizon Communications) — is still the local phone company.

This is not just a problem in the bustling suburbs of New England. Richard Banks, general manager of Milverton, Ontario, Canada-based Mornington Communications Cooperative, which is branching out of its traditional ILEC territory to deliver fiber-to-the-home (FTTH) services, says that even in the rural communities it serves, brand recognition carries a lot of weight.

“The challenge is in trying to develop a value statement for potential customers because they’re looking at you as the new guy,” he said. “They are saying, ‘why would I go with you when I got this guy that’s been providing me service for 50-60 years, so what are you going to do that’s better?’”

Click Here for the full story

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OffBeat News: Cell Phone Service Will Find Toilets
Courtesy of Cellular News

A new service promises Londoners they'll never have to spend much time looking for the loo. Westminster City Council, which covers London's bustling Oxford Street, the West End, Big Ben and the Houses of Parliament, on Thursday launched "SatLav" — a toilet-finding service for cell phone users.

Tourists, theatergoers, shoppers and pub patrons in London's West End can now text the word "toilet" — and receive a text back with the address of the nearest public facility.

The system, which covers 40 public toilets, pinpoints the caller's position by measuring the strength of the phone signal. The texts cost about 50 cents, and most of Westminster's toilets are free.

Click Here for the full story.

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