Telecom fraud growing: survey

Fraud is the largest area of revenue leakage for telecom operators, according to a new survey.

Average fraud losses resulting from all types of fraud, including external fraud, internal fraud and fraud by other operators, grew from 2.9% of operators' total revenue last year to 4.5% this year, said the survey by UK research firm Analysys.

The study, which is in its fifth consecutive year, surveyed 96 telecoms carriers around the world with subscriber bases ranging from under 10,000 and over five million.

In addition to fraud, the other three primary sources of revenue leakage cited by respondents are poor processes and procedures, poor systems integration, and problems associated with applying new products and pricing schemes.

Together this has driven the overall levels of revenue leakage among global telecoms operators from 12.1% last year to 13.6% this year.

On a geographic basis, operators in Middle East and Africa suffered most, experiencing more than 20% losses, while Asia close behind at just below 20% and CALA at more than 15%. Western Europe ranked lowest in losses at about 7%, following by CEE at 8% and North America just about at the average at 13%.

Sanjeev Gadre, VP of marketing at Subex Azure, which sponsored the survey, said it showed that the potential for revenue leakage from NGN services was a concern for almost all operators.

This, he noted, combined with increasing merger and acquisition activity within the industry, made it imperative for operators to centrally manage and address the revenue management challenges.

Revenue management needed to become "a high-level strategic initiative" in order for operators to compete in the changing telecom marketplace," he said.

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