The next sea of change could be around the corner for Telco revenue management

Commonality is a boon or a bane? This is a simple question I am faced with when I try and “search” for the causes of revenue leakage and possible assurance methods in a telecom network. As a matter of fact, the common causes of loss are discussed and re-discussed in never ending circles– and that seems to be the ‘bane’. My question therefore is — beyond the ones continually discussed which include usage anomalies, configuration and provisioning anomalies, partner and order management issues and such, could there be causes which impact revenues of business with a game changing effect? and I am inclined to believe there are much deeper impacts and reasons of revenue loss. Let me try and out forward some thoughts regarding the same. What if the entire business model for telecom operators takes a 180 degree turn?

The business and market share for 4-in-1 boxes with phone, fax, photo-copier, scanner has been nearly killed by the growth in better technology for communications. Email being the game change over fax.You might be thinking why I brought this up? The answer is simple– is there the game changer of technology around the corner that is going to give a new outlook to the service providing and telecom business as a whole- may be something vital as the email that almost killed fax? My understanding says ‘yes‘ and this time we may not be able to ignore the same as it is right on front of our eyes.

When Google announced the availability of ‘call the phone’ service from Gmail (read the article here, if not on the Google blog) the issue struck me! What happens to the existing business with the subscribers for the telecom operators? and what happens to the corresponding revenue management methodologies and concepts?? One might argue- this is nothing new as Skype has been here for quite long. By all good approximations, Total number of Netizens around the globe =20% almost equivalent to the Chinese population of 1.3 billion. (**calculation and information sources provided below) .If I assume, almost everyone of the netizens is a Google user– that makes the ‘subscriber base’ of Google nearly 20% of the population of the Globe– a staggering 1.3 Billion subscribers— all connected via ‘Global Backbone’ of the internet. I, as a user would love to make calls especially if they become cheaper than otherwise local or international calls.

The situation forces me to bias myself to Google’s capability and say that in sometime in future the entire subscriber base would actuallly be that of ‘Google’ and not of the telecom operators. The question then is, how do operators and telecom service providers survive ?? It is not that grim. Google would probably use the infrastructure backbone of the service providers and operators themselves. No doubt they are pushing for net-neutrality with Verizon. In this seeming winds of change Telecom operators and service providers could be acting as the ‘infrastructure’  provider for the services in an n-sided business model.  Thus the sources of revenue and therefore the business model as a whole would be drastically different from what it is today.

If the business model as a whole changes, what would one do with existing methods and technologies of revenue assurance and well to the broader extent (without getting into boundary conditions) of revenue management. The outlook and methodologies may need to have a complete change. The question probably could be, should the telecom operators even own the ‘subscriber base’ as a whole? Possibly– but the cost of the infrastructure could be way to high w.r.t the returns. But someone will obviously need to own the ‘billing and accounting’ for the subscribers. It may be lead to the emergence of a completely new form of business where ‘companies’ may just own the billing and accounting for the service offerings provided to the end subscriber- whereas the telcos provide the complete back-bone support and move in an almost B2B business  and away from the B2C business.

The challenges for revenue assurance and broadly revenue management could be primarily focused on ensuring proper revenue sharing in an n-sided business model moving away form usage (and to some extent) configuration anomaly related revenue management.

As I always mention, the thoughts and ideas I portray in my articles are completely based on my personal study and understanding and thus could be far away from facts and what other think about the same. I request anyone who reads my blog to share their thoughts– outright rejections of my concepts,  or acceptance- partial of full. All of your comments are welcome.

(PS: Please point out grammatical, spelling errors and or typos. I would be happy to correct)

** My Calculations for arriving at the number of netizens:

Population of world roughly : 6.7 billion (source)
Population of China roughly : 1.3 billion (source) [empirically 20%]
Total netizens of the China empirically: 20% of population of China (source)
Therefore if China represents nearly 20% of the world, approximately Total number of Netizens around the globe =20% almost equivalent to the Chinese population of 1.3 billion.
This entry was posted in Google, Revenue Assurance, Revenue management, telecom. Bookmark the permalink.

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