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KPMG Survey Reveals Major Telcos Weary of Revenue Leakage from Emerging Technologies

A new global survey from KPMG International has revealed that major telecommunications companies believe the transition to mobile commerce (m-commerce) services and adoption of emerging transformative technologies will have a substantial impact on revenue leakage.

KPMG found that 74 percent of the polled respondents believed that the transition to m-commerce would have the greatest impact on the telecoms industry, while 71 percent believed the industry will be impacted the most by converged services. The respondents also believe that new revenue streams as well as the associated network and billing systems essential for these services will contribute to revenue leakage.

In a release, Carl Geppert, Global Telecommunications & Advisory Lead and a partner in KPMG, the US member firm of KPMG International, said that, "The pressure on the revenue assurance function to detect and prevent leakages and recover losses has never been greater.”

Currently only half of the telecom companies around the world have successfully linked revenue assurance performance with senior management pay. Survey data collected from across Europe and the Americas, where prepaid and data services have surged, found that leakage of revenues have doubled since 2009 while revenue leakage reported by telecom companies from other regions across the globe have gone down.

Carl Geppert said that, "If we want revenue assurance to be taken seriously at the very highest levels, we must be prepared to incentivize senior executives for targets such as leakage prevention, detection and recovery. Currently, most organizations have established leakage thresholds with the associated key performance indicators at the operational level, but that accountability has yet to be fixed at the management level."

The success rate of the revenue assurance function in monitoring leakages has been different across different regions. In the survey 41 percent of respondents reported failure in identifying more than half of total leakages. While telcos in Europe and the Americas were more successful in identifying leakages, the rate was much lower across Asia Pacific. The rate of recovery however, was found to be similar with 40 percent respondents saying they successfully retrieved substantial losses from subscribers and suppliers.

Carl Geppert said that, "Currently most revenue assurance teams ultimately report to the CFO, who is a powerful sponsor to get things done. However given the volume of fraud and revenue leakage in the industry, the function should also have broader visibility at the very top of the organization."

Edited by Juliana Kenny