February Announcements Confirm Vendor Trends

Two unrelated announcements in February served to confirm two major trends in the revenue assurance market.

Growth in managed services

Subex has announced yet another managed services deal, this time connected to the deployment of their ROC Fraud Management System in a Middle Eastern operator. They are also deploying their RA system. See their press release here.

Market segmentation: chasing the smaller telcos

WeDo has launched BASE, an RA tools offering that is designed with Tier 3 mobile service providers in mind. This is aimed at the large number of telcos with less than a million subscribers, and predominantly sell services on a prepaid basis. You can see the press release here.

Conclusions

RA vendors, like the rest of RA, have picked a lot of “low hanging fruit” and are working to broaden their menu of products and services. One way to do that is to refine their offerings to make them more palatable to the telcos that were less well served in the early days of RA. In particular, smaller telcos need solutions that are agile, cost-effective and require less up-front investment to get them working. The trend there is towards delivering software, whether on-site or through the cloud, at an affordable price. This means the vendor must also seek to keep deployment and configuration costs low, so they can still earn a viable margin on each deal. The other trend is towards longer-term and more extensive partnerships between vendor and customer. The vendor is contracted to manage the service for several years, instead of just getting a big one-off payment on installation to be followed by a thin tail of licence fees. This reduces the risk for the customer, whilst helping them to limit their capex and headcount. The main benefit for the vendor is they get more stable income and earn margins based on the whole service they provide, not just on the software they develop. Even when the managed service contract expires, the vendor will benefit from improved customer loyalty, as swapping supplier would also mean changing the team of people running the service. Vendors also suffer fewer headaches caused by those telcos that used to buy RA systems without investing in the people needed to run them.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.