“Buy or Subscribe?

”
Why you should consider a Revenue Assurance managed
service approach
An Araxxe Whitepaper

www.araxxe.com
February 2018
 TABLE OF CONTENT

1. Revenue Assurance Managed Services…………………….p3

2. The Case for Revenue Assurance Managed Services……p7

3. A Case Study……………………………………………………..p9

4. Why use Araxxe’s Revenue Assurance Managed

Services………………………………………………………………p12

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1. Revenue Assurance Managed Services

Revenue Assurance Managed Services enable an operator to outsource part of the operational
functions of the revenue assurance department to a third party. Revenue assurance outsourcing is
usually done to improve performance and to reduce total costs of operations..

Under a managed services agreement, the service provider takes responsibility for providing a set of
agreed services at a specific Service Level. Typically, the outsourcing telecom operator remains
accountable for the end result of the revenue assurance operations and for the functionality and
performance of the managed services. Service providers will typically charge up-front for the set-up
costs of the operations, and then bill an on-going fixed or near-fixed monthly fee.

Outsourcing of revenue assurance functions (partially or integrally) involves both benefits and risks.
Both parties should be carefully assessed before a decision to outsource is taken. Several potential
benefits and risks are described below. Please note that the list is not intended to be exhaustive.

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1.1 Potential Benefits
Potential benefits of revenue assurance
managed services:

Overall Cost Benefits

Revenue assurance managed services can
provide significant capital and operational
cost savings. Above all, it means predictable
costs for the telecom operators.

Increased Productivity
A key benefit of a managed service is that telecom operator resources can focus on their
core business: they are able to investigate, analyse and correct billing errors rather than
spending time to perform test transactions with the test call generator.

Billing & Revenue Assurance Expertise

A managed service gives access to a skilled revenue assurance team using appropriate tools
and applying best practice observed from within industry / client community. This can also be
an opportunity to assist operators with limited or no revenue assurance management tools or
skills.

Operations according to worldwide standard

Subscribing to a managed service is a way to make sure controls are performed according to
international standards. In the area of Revenue Assurance three standards are particularly
relevant: ISAE 3402, ETSI TS 102 845 and ISO 27001.

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Extended Monitoring Scope
Subscribing to a managed service can trigger a review and optimization of the entire
revenue assurance strategy and approach for a Telecom Operator. It can also be an
opportunity to expand the scope of their revenue assurance activities, e.g. a larger
testing scope in roaming situations, quicker testing when launching new offers to the
market…

Easier (and more regular) Service Maintenance

Software / Hardware upgrades are included in the service. The service provider has
maintenance checks to ensure everything is running smoothly and there are no
problems that could potentially lead to service interruption.

Flexible contracts
If the managed service does not provide the telecom
operator with added value anymore, it is easy to stop
the contract. If software / hardware has been bought,
the telecom operator can only stop executing test
transactions which is a waste of the initial investment.

In practice Operator feel a bit stuck to what software

or hardware they have purchased but stop investing in
it because it does not deliver value ; this leads to the
worst situation something that does not create value is
maintained in operation. With a flexible yearly
outsourcing contract, if the vendor does not deliver,
the operator can always look elsewhere because
hardware and software are owned by the outsourcer.

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1.2 Potential Risks

Potential risks of revenue assurance managed services:

Security issues
There are risks regarding the transmission of data and how it is handled by the service
provider: loss or disclosure of sensitive or confidential data.

Loss of control
Outsourcing means, by definition, that revenue assurance services are conducted by a
third-party (the service provider); the telecom operator is no longer in control of the
quality or of the people. This may lead to a loss of operational management control for
specific cases.

Lack of knowledge and expertise

Chosen managed services provider may lack billing and revenue assurance
knowledge and expertise. This also may lead to poor quality of service from managed
services provider.

Difference in culture
Difference in culture between the telecom operator and the service provider may lead
to poor communication. Similarly, the fact that the telecom operator and the service
provider are based in different locations might lead to lower productivity.

Unclear terms and conditions

If the terms and conditions are not clearly defined and understood, hidden costs and
legal issues may arise.

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2. The Case for Revenue Assurance Managed Services

Factors to Consider
The factors that should be taken into consideration by telecom operators for a revenue
assurance managed services business case justification are:

• Capital investment cost savings (Capex vs Opex)

• Operational cost reduction
• Revenue assurance knowledge and skills improvement
• Business process optimisation
• Accountabing standards
• Best practices from shared operations
• Information security compliance

The business case development can be done together by the telecom operator and the
service provider.

Key Success Factors

Key success factors for the effective implementation of revenue assurance managed
services:

Selection of trusted service provider

When it comes to outsourcing, trust is key. Carefully selecting the managed service
provider. Be sure to ask the right questions: check not only their Credentials but also their
internal processes (hiring process, security protocols, incident management and change
management processes).

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Appropriate and clear definition of managed service scope
The managed service scope must be clearly specified and shared between the telecom
operator and the service provider. The defined scope must reflect the expectations of the
operator in an appropriate, unambiguous way.

Clear communication and operational procedures

It is key to establish and secure a stable dialogue between the telecom operator and the
service provider. Communication should concern any updates in the systems, new issues,
new trends and performance results.

Agreement of responsibility matrix

The roles and responsibilities between the service provider and the telecom operator should
be clearly defined. Clear contact points defined both at the telecom operator’s side and at
the service provider’s side: who, when, how to contact. The definition of responsibilities of
the service provider should also be backed by Service Level Agreements (SLAs) and Key
Performance Indicators (KPIs)

Trial period
Last but not least, a trial period is highly recommended: a trial period of up to three months
without any obligations for the service provider or for the managed service provider. This
period enables to check the workflow and procedures testing along with the SLA / KPI
calibration.

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3. A case Study

Let’s consider a telecom operator that needs a Billing Verification Solution based on Test
Call Generation. This operator should analyse at least two scenarios:
➢ Buying a test platform
➢ Subscribing to a managed service

A – Non-financial items 1/2

Buying a platform Subscribing to a managed service

Scope - Test Call Generators - The technical configuration is done by

(TCG): number of TCG units Araxxe before service launch, including
depending of the monitoring rate plans analysis and test campaign
Born by operator

needs design

Included
- Hardware installation - Billing error analysis and financial
impact estimates are also included in
- Test call management
the scope
software
- Service can be used to monitor the
- Call generator monitoring
launch of new offerings or the migrations
system
of technical platforms and systems.
- Initial training on-site
Implementation 8 to 12 months 6 to 8 weeks
time
Monitoring of - Monitoring of roaming - The managed service is live today in a
roaming require to buy more TCG large panel of countries, enabling the
Born by operator

units and install them monitoring of roaming when needed.

On-demand

abroad (hosting, support,

- Client pays only for what is needed
maintenance)
and requested (no tests, no fee)
- Organization selecting the
option “Buy” usually limit
their monitoring scope to
domestic tests (sometimes
on their home network only)
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Non-financial items 2/2

Buying a platform Subscribing to a managed service

International - Fees to buy subscriptions to - The managed service includes a

Born by operator
destinations international mobile / fixed large portfolio of test numbers
telecom resources to perform available for testing: international

Included
calls toward a representative numbers, fixed / mobile numbers,
panel of international premium rate numbers…
destinations.

Maintenance -TCG units are not - Roll out of new technologies and
and automatically updated when a upgrade of TCG units (robots) are
Born by operator

evolution new technology is included in the managed service

Included
implemented.

-Need to buy the

corresponding hardware
upgrades. For instance:
moves 3G → 4G → 5G and
corresponding new modules.

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B – Financial items

Buying a platform Subscribing to a managed service

Budget CAPEX OPEX

Initial €200,000 to €800,000 €0

investment
Further Hardware and Software: €80,000 to €250,000 per year
yearly fees depending on the monitoring scope
15 - 20% of initial fees (€30,000 -
€150,000) Full flexibility: possible to change the
monitoring scope anytime to meet the
+ additional Hardware upgrades
up-to-date business needs; possible to
+ additional Software updates suspend the service anytime too.

Training and Professional services: -

around 10 man-days per year
(€15,000)
Operational costs to operate the -
platform: around 2 Full Time
Equivalent.
1 technical profile (IT engineer)
1 business analyst profile (RA)

CAPEX
OPEX

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4. Why using Araxxe Revenue Assurance Managed Service

Araxxe has an established track record and is the recognized leader in revenue assurance
managed services.

We provide our clients with both the technical capacity and the business know-how to deliver
a world-class revenue assurance managed service, within an ever-shrinking budget.

Let the telecom operator team focus on its core business and be more productive.

As a result of complex retail offers (e.g. data bundles), managing a test call generator takes
a lot of time. Spending this valuable time to correct billing errors & improve the billing
experience for your subscribers has much more added value than struggling with a system
to generate test transactions.
BE MORE PRODUCTIVE

A managed service model also includes unlimited access to billing experience.

When subscribing to a managed service model, the telecom operator will also benefit from
Araxxe’s huge experience in managing international call campaigns on top of accessing
information around billing errors encountered amongst our global client base. This expertise
is not always available within the operator organization. In case the telecom operator
purchases hardware only, this experience needs to be built inhouse or purchased elsewhere
(external consultants managing the hardware purchased by the customer).

- Access to billing experience -

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A managed service offers multiple other elements, creating added value for the
telecom operator.

On top of the local equipment, the telecom operator gains access to robots (test call
generators) installed abroad, a set of 2.000 global telecom subscriptions managed by Araxxe
allowing the telecom operator to test international calls, premium rate services and other
tariff plans. In a hardware model, the telecom operator needs to deploy its own test
infrastructure and telecom resources!

Shared network infrastructure leading to cheaper investment.

The test call generators and support infrastructure are shared amongst all Araxxe
customers. As a result of this, the telecom operator only pays in line with his hardware
usage!

No hidden costs.
In case the telecom operator purchases hardware, additional costs such as equipment
upgrades, software updates, yearly maintenance fees, equipment hosting costs, internal
project costs, additional FTEs to manage the solution…, need to be budgeted. This is not
the case in a service model. You pay as you go!

Compliance with International Standard

We deliver our revenue assurance managed service in an automated way through

standardized procedures (compliant with international standard such as ETSI TS 102 845,
ISAE 3402 and ISO 27001), specialized tools, reports for management and Service Level
Agreement agreed with the telecom operator. It is possible to determine- at any time-
whether the business objectives set are being achieved and are in line with the client
expectations.

ISAE 3402
ISAE 3402 is an assurance standard developed by the International Auditing and Assurance
Standards Board. The International Standard on Assurance Engagements (ISAE) deals with
assurance engagements undertaken by a professional accountant in public practice. They
provide a report about the controls at a service organization that will be used by user
entities and their auditors. This report is likely to be relevant to user entities’ internal control
as it relates to financial reporting.

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ETSI 102 845
ETSI 102 845 is a technical standard developed by European Telecom Standard Institute for
billing verification. The standard provides a model for designing and operating the checking-
up on metering and billing processes of Service Providers. As the verification approach of
the standard is end-to-end (i.e. using a "black box" approach from the actual electronic
communications generation to the checking-up on their billing), these requirements are
applicable to the metering and billing of any kind of services offered by the Service
Providers. The standard defines a standardized checking process that could be implemented
by any stakeholder and is auditable by a third-party, leading to trustworthy performance
indicators about the integrity of billing issued by a Service Provider.

ISO 27001
ISO 27001 is a technical standard developed by International Standardization Organization
for ensuring information security. The standard is designed to ensure the selection of
adequate and proportionate security controls that protect information assets and give
confidence to interested parties.

Return on investment!

Araxxe revenue assurance managed service includes test campaign management, billing
verification and financial impact estimation of the billing errors detected by the service. We
have developed a standardized methodology to evaluate the business impact of any spotted
billing error or interconnect fraud. It thus becomes effectively possible to verify the quick
return on investment resulting from both revenue recovery and cost optimization.

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Subscribe

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About Araxxe

Araxxe is a French company founded in 2005. We deliver End-to-End Billing Verification and
Interconnect Fraud Detection solutions to Communication Companies worldwide. We
operate managed services supported by an integrated infrastructure of software, hardware
and people.
Our unique network of robots is spread across 170 countries and has access to 3,700
telecom resources. Araxxe product portfolio includes Subscribers Billing Verification (for
Mobile, Fixed, Pay TV Services, Outbound Roaming and Data Bundles), Wholesale Partners
Billing Verification and Interconnect Fraud Detection (such as SIM Box, OTT Bypass and
A2P SMS Termination Abuse).

Contact us
Frederick van de Weghe
Chief Commercial Officer
Frederick.van.de.weghe@araxxe.com
+32 478 800 696

Araxxe SAS - Immeuble Britannia - Building A

20 Boulevard Eugène Deruelle, 69003 Lyon, France