From RA Virgins to MVNOs

Today’s guest post comes from Daniel Peter, who recently contributed to a spirited exchange of comments about unbiased reporting of revenue assurance news and views. I challenged Daniel, commenting that if he wants a good independent source of RA insights, he should “get off the sidelines and do something about it”. To Daniel’s credit, he has risen to the challenge! Daniel is a Senior Account Manager at Mara-Ison Connectiva, having remained with the software vendor and helped to manage its restructure and takeover. In parallel, Daniel is studying on the Executive Business Analytics program at the Indian Institute of Management Calcutta (IIM), and his dissertation on the Corporate Response to Recession (2008-09) was published LAP Lambert Academic Publishing. In today’s post, Daniel tells us why he admires Richard Branson, and raises questions about implementing revenue assurance in MVNOs.

Cover of Richard Branson's Losing My VirginityRichard Branson’s Losing My Virginity is an inspirational book. It’s the story of Branson’s life and I thoroughly admire his adventurous story of boldness and his skill in intelligent risk taking. At the age of only 16, he started a youth-culture magazine, followed by a record shop, then a record company, and all the way through to launching an airline and a space travel company. I came across the book during my college days; I read autobiographies of great leaders and Branson’s story continues to fascinate me.

It’s very interesting that Branson has also ventured into telecom, the industry that I’m part of. This made me curious to learn in what way Virgin Mobile is different from other telcos and also to find whether revenue assurance was an ingredient to his success. One of his successful ventures is Virgin Mobile. Started in 1999, Virgin Mobile was the first Mobile Virtual Network Operators (MVNO) to become a commercial success. It first launched in the United Kingdom and then around the world.

Now Virgin Mobile has evolved. For instance, the US unit has been folded into Sprint, the mobile network. And yet, Virgin Mobile’s name lives on in the US because Sprint continues to promote it. The Virgin business gets some powerful free branding from this deal. The US Virgin Mobile even carries the iPhone. Now, while a lot of MVNOs have struggled and failed, Virgin Mobile has largely succeeded and established a global presence. The crucial factor in Virgin’s success was the decision by top managers to maximize topline growth. In other words, Virgin insisted on using RA practices and processes from the beginning. Isn’t this his success formula?

And this is rather curious because here you have someone like Branson – a known risk taker who likes to fly in balloons across the Atlantic – yet with his MNVO, he was determined to implement revenue assurance. Doesn’t this show the importance of RA in MVNOs? This also made to curious to find more about MVNO from RA perspectives.

Now I checked mvnodirectory.com, and Wikipedia, and found there about 645 active MVNOs in the telecom world. And when taking a look at the agendas of a few MVNO-specific conferences such as the MVNO World Congress in Berlin, Germany, and MVNO Networking Congress in London, UK, I was shocked to see that Revenue Assurance was not on the agenda. What’s more, none of the major providers of revenue assurance and fraud management systems was sponsors for these conferences. So this made me curious about the RA practitioners: are they not focused on serving the MVNOs?

Now the MVNO Business model is different from MNOs. RA controls have to be different. Not all MVNOs have full access to the usage records; some deploy their own MSC, SCP and IN; operate on thin margins and their largest expense is the fee they pay to the MNO.

Dan Baker pointed me to a Black Swan interview he had with Mark Yelland, a UK based RA expert focusing on the tier 3/4 and MVNO space. Yelland talks about the major cash flows problems an MVNO faces, “if the MNO is holding a lot of records in suspense that are not being billed, it might be only 1 percent of the MNO’s total portfolio, but it could be 80 percent of the MVNO’s business…”. Yelland suggests operators try standard software tools like Excel and MS Access to get the RA process started. I agree, and I would further say that with new technologies available today, small operators can easily put together a cost effective tool with specialized RA functionality easily.

So to conclude, I have a couple of questions to ask the talkRA community. If Virgin Mobile finds RA essential, why shouldn’t MVNOs be a growth market for RA tools? Why are RA solution providers not pursuing the MVNO business? Many of the MNVOs are established brands and can afford to invest in RA.

Daniel Peter
Daniel Peter
Daniel Peter is Vice President of Analytics at Gamma Analytics. He heads Gamma’s Data Science group working with customers in advanced predictive model development, business data analytics, data science, and product strategy. He also has significant expertise working with Fortune 500 companies for Connectiva Systems and Hewlett Packard.

Daniel has a Business Analytics degree from IIM Calcutta, Masters in International Business from Kedge Business School, France, and MBA from Loyola Institute of Business Administration, India. He is the author of: “Corporate Response to Recession (2008-09)”. He speaks and writes on telecom topics and can be reached at daniel@gammanalytics.com