Going under the microscope with underbilling
The scourge of underbilling in telecoms is higher than ever, according to recent research – how bad has it become, and what steps do telcos need to take to get to the root of the problem?
As we covered on our blog back in March, O2 was fined £10.5 million for overcharging customers for years due to an unresolved bug in billing. Yet according to a recently published report by a French revenue assurance firm, the scales of billing may be tipping in the other direction.
A study on billing error frequency by Araxxe has uncovered during a series of international tests that underbilling is the most common issue facing telecom revenue streams.
According to its research, underbilling is responsible for 72% of all billing errors, while cases of overbilling represented 23% of cases. The remaining 5% were the result of other issues, such as incorrect messages about roaming or bundle usage.
In fact, roaming was responsible for 55% of errors, compared with 45% which occurred when using home networks, reportedly due to “the complexity of roaming billing and the inability of operators to independently verify new plans and promotions.” And 59% of billing errors were related to voice services, compared with 25% being for data, and just 16% for SMS messages.
Comparing these results with a similar report by Araxxe in 2019, we can see the ratio of underbilling versus overbilling errors is increasing; previously, 65% of errors were undercharges, while 35% were overcharges.
Though businesses may be laser-focussed on preventing underbilling cases to protect their precious incomes, it’s overbilling that causes the most reputational damage, and may result in action by industry regulators.
O2’s aforementioned blunder – one it had been aware of for years – is just the latest example in a series of cases where CSPs have fallen foul of industry regulators because of a cavalier approach to billing, and it’s unlikely to be the last!
The TM Forum puts telco revenue leakage at 1.5% of earnings in its most recent revenue assurance survey. More worryingly perhaps is that only 54% of telcos are keeping tabs on their leakages, significantly down from 84% in 2018.
Now, with voice revenues increasingly under threat, telcos must ensure the accuracy of their billing processes, both for the benefit of their customers and the future of their own businesses.
In this “age of overcharging,” more than ever, telcos must make the right investments in their business support systems to not just add more systems and processes to identify issues, but to close any revenue assurance gaps at source.
Cerillion Enterprise BSS/OSS is a pre-integrated product suite with all modules built around a common technology framework and working together out of the box, helping to eliminate revenue leakage at source. Contact us now to find out more.