Managing ‘Cost’ must be an integral part of telecom Revenue Assurance

Business must be sustainable. A company can be profitable yet bankrupt if the cash reserves are not in the right order. The state of telecoms w.r.t spending does not seem to give a clear picture as to how much the business is sustainable — costs are sky-rocketing where margins are shrinking. One may argue that, that investment in telecom business, means that the break-even would happen over a long period of time — but my question is how long? and if it takes really long for a break-even, what are the key factors that can help to improve the share-holder value? Cost containment is probably one of the ways to create a sustainable business for telecom operators, and it must be a part of revenue assurance.

Revenue is top line– but how good or effective is the top-line is a measure that can be realized only when the bottom line is also accounted with it. Only when revenue leakage is stopped and the costs are optimized, can a business be called sustainable when there is a clear view of the profit margins. If you look at it, accounting for revenue assurance without the effect of cost on the network, is almost as useless as buying a car without the engine– the body of the car may be spotless (revenue figures of telecom) and the car may also have a strong chassis (the business of telecom), but effectively the car is is useless.

In my opinion, accounting for the cost factor is what revenue assurance lacks today. Effectively, these are not two separate forms of ‘assurance’. Cost assurance or cost management must also include the effect of revenue loss due to leakage and thus include the entire activity of revenue assurance.

Is there a thin line of discrimination between cost and revenue assurance? I intend to say no, as either of these alone does not give the proper picture of the state of the business. Be it assurance, or be it optimization or management, effect of activities that intend to affect either of revenue or cost must go hand in hand. In another article in my blog, I tried to find what assurance, management and maximization meant. I believe the broad term of assurance or management should ideally be ‘Risk Management‘ encompassing all the activities within itself, otherwise effectively it just becomes a ‘marketing’ gimmick without much value add for the telecom operators.

Like always– this is completely ‘in my opinion’. Do let me know what you think of it.

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

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This entry was posted in Revenue Assurance, Revenue management, Risk Management, telecom. Bookmark the permalink.

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