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News
Issue #2002 - 21 (June 2002)
(Updated June 5, 2002)

MARKET OUTLOOK & TRENDS

U.S. Wireless Operators Looking to Lose $7-Billion, study says

The leading U.S. wireless operators could lose an estimated $7-billion in revenue leakage, according to San Francisco-based Kabira Technologies, a provider of software solutions for convergent networks.

In its announcement, Kabira Technologies said that based upon research from multiple third-party consultancies, information from technology and solution partners, experience gained from deployments in wireless networks, and using a weighting system across 32 wireless operators, its analysts have estimated that losses in the U.S. are just under 10 percent across all revenues for those carriers.

Revenue leakage is defined as potential revenue that cannot be billed for services delivered to customers. Leakage tends to be lower in single technology networks with simple service plans, whereas leakage grows as operators combine networks and offer more complex services.

Kabira identifies seven sources of leakage, including:

  • Collection Failures: Failure to poll and collect data; protocol mid-stream failures during collection, and failures due to lost inventory.
  • Overrun Error Logs: Unidentified records go to error logging for later disposition. Error log overruns occur when the logging reservoir reaches its maximum capacity and discards older error records.
  • Billing System Rejection: Bad record submission; out-of-date billing interfaces, and modern packet types being sent to legacy billing platforms.

Kabira’s vice president of marketing and technology strategy Grover Righter offers wireless operators a few words of advice: "While some operators lose more than 10 percent of revenue through leakage, not all of that can be recaptured cost effectively. Most wireless companies would benefit from working with solution providers to recapture the ‘low hanging fruit’ in their networks, which translates to about 5 percent revenue recapture as a reasonable target."

For more information: http://www.kabira.com

MobileInfo.com’s Comments & Advisory:  We are not surprised at the level of leakage that does occur. Any effort to plug these leaks would be welcome by network providers but we would warn business case developers to keep in mind that 5% revenue recapture may be high. It may require extraordinary efforts.  All industries have a built-in wastage as a business cost. 

Note: This news release may contain forward-looking statements. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.


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