Lunch Time Teaser – 06

This month’s LTT comes from Guy Howie, who has joined the talkRA quiz team. Guy is a Director at BIAAS, the supplier, since 2006, of the GNRM database solution which ensures accurate and maximum National and International Retail call billing. BIAAS also provides specialist expertise in call margin data warehouses for the telco sector.

The challenge

You work for AceTelco. Following a meeting with product management to discuss the P&L, the CFO explains he has growing concerns with the margins on some types of Non Geographic Calls. In particular, he suspects a potential problem specific to Freephone Non Geographic calls which Transit the network. Normally, AceTelco does not transit these type of minutes for trading purposes, but they are thought to be transiting the network because the 0800 numbers have been ported out to another telecommunications operator a few years ago.

As the Revenue & Margin Assurance Manager, you have a great reputation for finding leakage. You have always suspected material undetected errors in the Interconnect Billing System, as it contains millions of price points, and generates huge revenues. It has traditionally been outside your RA scope and neglected by top management with numerous staff changes over the years. You see this challenge as a great opportunity to start changing this tradition.

You have access to more detailed reporting on call margins, which no-one has ever really understood.  These reports are derived from a system which extracts all Interconnect Rated Records relating to a call, and then combines these into one line in a database to reveal the net wholesale revenues and costs and also the margins for each individual call.

The CFO wants your opinion after lunch:

  1. Is there a real loss and if so, how much in the last month?
  2. What exactly, if anything, appears to have gone wrong?
  3. What do you recommend happens next in order to prove any suspicions about the errors?
  4. Do you have a view on the overall size of any possible loss and can it be recouped?

You have just been provided with the following information: A margin Report for the Freephone Transit Calls in May 2013, summarised by destination number by your analyst. And some Interconnect Prices relating to the outbound operator, from the product manager.

You also have the following limited knowledge about Interconnect.

  • ‘remember that in the Interconnect world ‘Freephone is the other way around, so be careful with the minus and plus signs’
  • ‘transit calls don’t tend to generate high margins, but they can be great for overall revenue figures.’
  • ‘Interconnect contracts normally state that if there is a billing error, you can go back 6 years’

Please email your answer to [email protected] – the answer will be revealed in two weeks time, along with the name of the first person with the correct answer.

From time to time, Commsrisk invites special guests to make an expert contribution.