Small Telcos Should Demand Fraud Cover From Wholesalers

If you have not seen it yet, check out the interview given by fraud management specialist Jan Dingenouts for Black Swan. I will not repeat everything Jan said, but he made some key observations that resonate with my own views.

  • In a larger telco, it is hard for a team of 20 or 30 employees to acquire and maintain a broad enough range of revenue protection knowledge and skills. In small telcos, the two or three people responsible for fraud management and revenue assurance have no chance of maintaining comprehensive awareness of all the relevant risks. This is not a criticism; even hard-working super-geniuses cannot understand every complicated cause of fraud and leakage. Employees of small telcos need to draw on outside help to maintain a desirable level of risk coverage.
  • Big wholesalers need to provide more fraud protection for their small retail telco customers.
  • The nature of bargaining power means it is harder for a smaller business to make demands of a larger supplier. However, small telcos need to factor losses from fraud into any assessment of the cost of routing traffic via various wholesalers. If they insist on better fraud cover, they will eventually get it from their current wholesale partners – or from the wholesalers they switch to.
  • A small telco that belongs to a group has increased bargaining power if the group has the intelligence to exercise its bargaining power. But irrespective of who owns which telco, it makes sense for small retail telcos to speak to their peers and collectively drive up expectations for how wholesalers prevent and respond to fraud.

Jan Dingenouts is a new name to me, but this interview gives me the impression that Jan is a plain-speaking no-nonsense consultant. I hope to hear more of his advice in future.

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.