Revenue Assurance Discussion: A Bad Case of CAMEL Fraud in Cairo

datePosted on 11:39, August 5th, 2010 by grapa

Once again, we finished another great week of running our Core Xtreme Revenue Assurance training class in Cairo. With fifteen people from Africa and the Middle East, it was another fantastic session for everyone involved.

A I have mentioned before, it always amazes me how each time we teach this class, we end up focusing on different issues than in previous sessions. This week, it seemed that the biggest issues were surrounding issues of margin assurance, specifically in areas of content and interconnect margins, as well as the margins for BTS’s and MSCs. We also had some in-depth discussions about the roles of regulators, and their stake in revenue assurance issues (due in no doubt to the fact that we had three regulators attending the class).

However, the biggest and most involved discussions were concerned with problems that carriers are facing with the “leading edge” business model deployments, specifically the almost epidemic of CAMEL Fraud and Revenue Loss conditions, and the utter chaos that seems to be surrounding GPRS and billing for it.

As we covered in the class, it is critical that the revenue assurance professional understands that the real key to effective revenue assurance is to stay aware of three things:

  1. A continuous revisiting of the actual Revenue at Risk. For the revenue assurance manager, the first job is to make sure they understand how much money is at stake. This after all, is the only way that the manager can set priorities and allocate the appropriate level of time and energy to each of the hundreds of issues that need to be addressed.
  2. To stay aware of the continuously shifting technology and business model environment that we live in. There are a few rules that you can count on in this business, but one of them is “The older the technology, the more stable and manageable the revenues” and conversely, “The newer the technology or business model, the more unstable and difficult to manage it is”.
  3. To stay loyal to the foundational principle that GRAPA sets out, which is that our primary job is to monitor and manage the degree or risk to revenues and keep it in line with management’s appetite for risk.

How then, does this pertain to our two main subjects for the week, CAMEL Fraud and GPRS.

To begin with, both technologies are about the same age. They have both been under standards review for many years, and yet, for the most part, both have recently crashed into the forefront for telco focus.

GPRS is the technology which allows GSM subscribers to enjoy real time, always on broadband internet access for a low fee. The key to GPRS is the installation of new network infrastructure known as the GSN (the SGSN and the GGSN) which makes it possible for handsets and USB dongles to turn devices into GSM based broadband internet channels.

While the GPRS technology itself seems to be working well enough, what is absolutely unclear is how telcos are billing for it. In country after country, we hear reports that while management is investing heavily in the deployment and promotion of GPRS, very few of the revenue assurance teams are allowed access to understanding how it is billed or how it can be assured.

As a result, while telcos run up the subscriber numbers, and the packets delivered by GPRS systems, the actual integrity of the revenue collected is seriously in doubt. In some countries, the engineers have completely given up. They simply offer a “flat rate” monthly fee, and then try to control the damage through a “fair use policy”.

In other countries, engineers are continuously modifying their billing models, shifting from s-CDRs, to g-CDRs, to both, to Radius to Diameter servers in a constant and chaotic effort to “get it right”.

The good news, for revenue assurance people, in this case, is that the product and business model is in its infancy, and therefore: The risks of loss are really opportunity costs (if you don’t collect for 100 packets, how much money did you really lose?). The usage and revenues are still quite low, so you have some time to figure it out and minimize the damage before it gets too far out of hand.

CAMEL Roaming, on the other hand, is a completely different situation. CAMEL roaming (also known as Prepaid Roaming), is an exciting technology (and business model), that allows prepaid customers to roam on the networks of other carriers without requiring them to buy new SIMS, or to gain postpaid accounts. For the vast majority of carriers CAMEL roaming has only been undertaken in the last year.

However, while CAMEL offers a lot to carriers in terms of revenue opportunities, it also brings with it a huge amount of risk. In the case of CAMEL the biggest risk being felt by most carriers occurs when they get involved in CAMEL agreements before truly understanding the technology or the business model, OR they get involved with partners who do not understand it.

In these cases what can happen is prepaid customers from your network roam on another network running up huge roaming fees, and you, because your network is not configured properly, are not able to collect for it. The net result in this case? You must pay a huge Roaming Settlement fee to your roaming partner, and you are unable to collect from your customer.

For those of you who have not yet experienced this problem, it may seem that the risk would be small, and that the likelihood of you suffering from it remote. But the reality is, that month-on-month, we at GRAPA are hearing more and more cases of this kind of foul up, and the reported losses have been in the millions of dollars. In this case, the problem is that even though this is still a new technology, with an immature business model, the risks to the telco are HUGE.

The reasons the Revenue at Risk is so high is because CAMEL agreements involve partners and when things go wrong, partners still expect to be paid. CAMEL losses, like interconnect losses, represent cash out; a major loss in many ways.

So what we have, is a perfect opportunity to understand and appreciate the value that revenue assurance brings to our chaotic environment, and a great example of how to apply the principles and methodologies promoted by GRAPA to good effect. The future of telecoms always has been, and will continue to be, in the area of new technology and new business model deployment. The telco that sits back and rests on it laurels is the telco that does not survive in the long run.

However, it is exactly because of these severely competitive environments that telcos are often pushed into the deployment of technologies that represent far greater than normal risks. It is then that the revenue assurance professional, with his or her battery of forensics, corrections, controls and compliance tools can be of the greatest value to management.

The future of GPRS and Roaming is a foregone conclusion. Both will quickly become dominant sources of revenue for a large number of carriers around the world. The future of the revenue assurance professionals in these companies, I hope, includes an aggressive approach to these technologies and business models, as they figure them out and master their billing and assurance challenges. And that is what it is really all about.

I know that there is at least one group of revenue assurance professionals who are up to the challenge and armed with the tools, and those are the people who just got their Revenue Assurance Certification in Cairo. Well, that’s enough for this week. Until next time, this is Rob Mattison saying…“be safe”…..

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