Debt, Payments and Handsets: How a Global Crisis Leads Revenue Assurance to Find a New Balance

The seemingly endless cycle of lockdowns and restrictions over the course of the year have prevented us from seeing loved ones and forced us to alter the ways in which we communicate. In a world where distance is a necessity, smartphones have never been more important in keeping us connected to our friends and family. In addition to this, until a vaccine has been made available to the whole population, it is likely that restrictions will remain and contact-tracing will play a large part in allowing us to return to some degree of normality. For this to be effective, smartphones need to facilitate the sharing of data and alert people when it is necessary to isolate or get tested. Indeed, our ability to live comfortably during these strange times rests on our access to smart mobile devices.

However, with the economic impact of the global pandemic, operators and consumers alike are managing increasingly tight budgets. This has made revenue assurance a necessity for operators as they are facing pressure on all sides – from a reduction in retail sales to an emphasis on supporting their customers through trying times. Businesses need to find a balance between protecting revenues and supporting consumers facing tough financial decisions. In some markets we have already seen a double digit jump in reduced payments to operators on mobile contracts. It is also increasingly difficult for operators to win new customers with one Gartner report revealing global smartphone sales have already declined 20% in the second quarter of 2020. All of this comes at a time when fraud and mobile-related cybercrime is on the rise leaving operators with a complex problem to deal with.

So how can mobile operators drive more revenue?

One of the biggest challenges for operators currently is how to get revenue flowing again. A good place to start when looking at this issue is effective device financing, in conjunction with intelligent device management. A sensitive approach to this will be key to ensuring that operators can achieve revenue assurance without cutting services to struggling customers, especially at a time when smartphones are considered a lifeline for many.

Traditional approaches used to encourage customers to pay their bills are often ineffective and risk customer resentment, as well as costing millions in customer care costs. With more intelligent device management, operators can create a more effective and productive process of customer engagement and one that does not risk alienating their consumers.

When times are hard, a nuanced approach is needed as opposed to an ‘all or nothing’ approach of cutting off customers with unpaid bills. Instead, using technology, operators are able to modify device functionality, reducing certain features remotely while not completely disabling their customers’ ability to contact loved ones or continue working. For example, operators have the choice to render smartphones into simple call and text devices for the duration of time when bills remain unpaid. In doing so they are able to encourage repayment without cutting off their customers completely.

Attracting new revenue sources

Consumer loyalty to mobile networks is a rare thing. Purchasing decisions are often based foremost on the device and then the cost of the contract. The better the deals operators offer to prospective customers, the better placed they are to win a large share of the market. However, as already suggested, the current economic environment has led to a reluctance to commit to new contract payments, and this is likely to continue for a while to come.

In addition to reluctance on the part of consumers, economic instability is also likely to impact on customer credit worthiness. It is currently estimated that between 30% and 70% of applications for postpay contracts with new devices are rejected. The challenge has now become offering more customers better contract deals, while reducing the risk of unpaid bills and payment delinquency.

Again, this is a challenge that can be addressed to some extent by improved device management. The security offered by device management allows operators to offer contracts to prospective customers who would currently be deemed to have too high a risk profile. Additionally, by having control over devices operators will also be able to lower prices without increasing commercial risk.

Countering device fraud

It is normal to see spikes in criminal activity during a time of economic hardship. This can range from petty theft to highly organised criminal networks. Smartphones have become a target for such behaviour as their value continues to rise and the traditional methods of locking devices have become antiquated in a more global world. Indeed, a recent survey by RAG estimated that handset theft costs operators 4 billion US dollars annually. IMEI blacklists are unfortunately restricted by geography, meaning that once a device has been trafficked to areas outside of their jurisdiction, it retains a lucrative resale value.

Now that smartphones can be managed remotely throughout their entire lifecycle, operators no longer have to rely solely on the IMEI blacklists to protect them against fraud and the threat of trafficking. The ability to completely lock the device no matter where in the world it may end up, rendering it useless, removes its value, acting as a deterrent to organised crime.

Operators setting themselves up for success

Today, mobile operators face many challenges and must balance external threats and the needs of internal stakeholders. Sales teams have targets to hit and are under increased pressure. Finance and fraud teams must ensure that risks are balanced and assets are protected. Device management goes a long way to meet these needs, giving confidence to operators and offering revenue assurance without increasing unnecessary risk.

Dion Price
Dion Price
Dion Price is the CEO of Trustonic, a world leader in mobile device security. Trustonic has offices in seven countries and counts some of the world’s leading car manufacturers, financial institutions and mobile operators as customers, in addition to all the leading Android handset manufacturers.

Dion has spent two decades in mobile operator, digital transformation, start-up, hardware manufacturer and consulting environments. His mobile experience includes two distinct periods at Telefonica UK and Telefonica Global, as well as with Brightstar’s Operator services business, which involved working with over 20 mobile operator groups worldwide.