For anyone involved in the industry, big accounting fines leveled at Telcos which hit the headlines come as no real surprise. Whilst the scale of these incidents might be unusual, in reality the fact of telco accounting errors are depressingly normal.
Regular inaccuracy in telecommunications billing has become entrenched. The telecoms market, like many industries, has been undergoing rapid change as digital technology becomes a driving influencer. To survive and thrive, a lot of diversification has occurred. New services such as wireless, broadband, TV and digital, along with M&A activity have allowed Telcos to grow in challenging market conditions, but have created overlap, neglect and redundancy in billing and revenue management systems.
For example, some Telcos work from over 1,000 different systems, giving them an uphill struggle to create an agile system which is fit to compete against new innovators. For the many companies across the sector seeing static or declining profits, the need to create efficiencies is strong. But the current state of many back-end systems means that service providers have become trapped in a vicious cycle of overcharging and being hit by hefty fines as a consequence.
The difficulties of managing multiple back-end systems means that Telcos pass unnecessary costs onto customers with an average 5 per cent billing error rate, which amounts to £2.67 billion per year. Telecoms companies are under scrutiny as to whether customers' bills represent exactly what services they have received. According to the latest figures from the Ombudsman Services, there were 28,635 complaints in the telecoms sector last year, an annual increase from 17,917 in 2015. Over 11,000 of last year’s complaints were billing related, which increased from 7,410 . Putting an end to the overbilling of customers requires a unanimous market effort to implement self-regulation and better oversight over siloed systems.
Using next generation automation systems to modernise the back office is one solution to the issue. Technology can help businesses identify cost savings which significantly reduce customer billing complaints and the dissatisfaction associated with overbilling. Many Telcos are turning from their existing legacy revenue management systems to cloud based services in order to have a system which is fit to handle the multiplicity of services now on offer. Big Data analytical software, brought in on a Software-as-a-Service model, are helping to replace the many siloed legacy systems and create more accurate readings of billings.
Overall, however, the regulatory approach still remains blurry. There is a need for telcos to bring in self-regulating tools such as those that incorporate Big Data analytics, to ease the pressure and reduce the risk of dissatisfying customers, which can occur from overcharging them on their bill. Partnering with digital experts who have domain knowledge of the industry will support telco companies in their quest to become more agile and to take back market share from new entrants who are not hindered by old data management systems.