Revenue Assurance
Revenue Assurance and Anti-Fraud: Expertise and Technology
The author of the article is
Irina Glukhova
Irina Glukhova
January 29, 2024
The path from service provision to revenue collection for mobile operators is fraught with challenges: at every stage, the process faces disruptions, equipment conflicts, and system configuration errors. And, of course, fraud—a term widely used in the telecom industry to describe fraud-related losses.
In an interview with ComNews correspondent Irina Glukhova, Arsen Lazaryan, an independent expert in revenue management for telecom operators, shared his experience in managing profit processes and combating fraud.
— You led the Revenue Assurance and Fraud Prevention function in the Southern Macroregion of MTS for a long time. How do you see the current state of the market?
— The telecommunications industry is undergoing profound transformation, and at first glance, it may seem like revenues are stagnating and growth is slowing. However, in the era of total digitalization and the development of artificial intelligence (AI), more and more new products are emerging—a symbiosis of traditional telecom, IT, and AI. Due to this technological complexity, issues of fraud prevention and revenue assurance are reaching a new level, and the demand for these functions will only continue to grow. Increasingly complex business processes and equipment will be implemented to deliver services, creating limitless opportunities and a growing need for Revenue Assurance (improving the quality of data and processes to enhance profitability, revenue, and cash flow without affecting demand — editor’s note from ComNews).
— There are countless reasons for revenue leakage, as every operator has a unique set of services, systems, and business processes, which means they also face a unique set of errors, malfunctions, and fraud schemes. What are the main anti-fraud measures?
— Fraud prevention is critical for business. Disclosing sensitive information about these measures could harm the company, impacting its profits and reputation. Such information could fall into the hands of fraudsters who would undoubtedly exploit it. For this reason, fraud prevention remains a highly confidential topic. Timely response and prevention of fraud allow operators to avoid losses that can reach tens or even hundreds of millions of rubles.
I can say that the professionals working in these departments possess deep expertise. They are aware of all system vulnerabilities and meticulously monitor any changes in real-time. With your permission, I would prefer not to delve deeper into this topic beyond what I’ve already shared.
— What types of anti-fraud challenges have you encountered?
— Illegal termination of international traffic using GSM gateways, roaming fraud, A-number spoofing fraud, PBX hacking, and subscription fraud—this is just a small portion of the issues we’ve had to combat. Significant progress has been made in addressing these challenges, even to the extent of initiating criminal cases.
I would like to emphasize that the colleagues I’ve had the privilege to work with are some of the strongest experts in their field.
— Can you talk about revenue assurance? It’s not such a confidential topic, is it?
— Revenue Assurance is a business function designed to help operators achieve their budgeted revenue targets. Imagine a scenario where the budget is approved, and everyone understands the path to meeting the planned metrics, but something goes off course. On paper, the revenue should be higher, but in reality, it's lower. This is where Revenue Assurance comes in.
Due to the complexity of billing systems, the technical network, and imbalances in business processes during service delivery, some revenue is lost. To visualize it, think of a water pipe with multiple threaded connections. Water flows in with excellent pressure, but by the time it exits, the pressure is reduced. Each connection might be dripping water, causing leaks. The task is to place a bucket under these leaks to collect the lost water and channel it back into the pipe. The water represents revenue, and the pipe is the operator's infrastructure.
You might be wondering, how is this achieved? Control procedures are created to automatically monitor data at the output of one node and the input of another. This ensures that all information is correctly transferred from the switching equipment to the billing system and flows through its complex architecture without losses. If a problem is identified, a targeted control is developed to monitor each potentially vulnerable area and detect revenue leaks.
This is a complex task that involves employees from various departments within a telecom operator: IT, technical teams, finance, marketing, sales, and security. It depends on where in the process the revenue is being lost. The job of the Revenue Assurance team is to quickly identify the issue and facilitate cooperation between departments to resolve the incident as swiftly as possible.
Once the root cause of the issue is addressed, an assessment of its impact on budget performance is conducted. For the company's top management, the Revenue Assurance function acts as both an auditor and a strategic assistant, helping to uncover and address underlying problems, thereby safeguarding the business's revenue.
— What do you think is the most critical competency for employees in revenue assurance?
— Insightfulness. Yes, precisely that—experience and a trained eye. An expert can spot a problem from a distance, long before it manifests. They understand the chain reaction certain actions can set off. A revenue assurance specialist is like an experienced doctor. Imagine this metaphorically: telecommunications is a living organism made up of various organs. When the body is healthy, a person feels great, but even a slight ailment can throw everything off. The same applies to billing and network equipment. The only difference is that in this case, the “health” refers to the business’s revenue, and the “organs” are the various technical nodes of a telecom operator.
When the interaction between these components is disrupted—whether due to a malfunction, incident, or error—it results in revenue losses for the company. The task is to anticipate and mitigate risks before they occur. This is only possible with deep experience and a well-trained perspective. Today, as in years past, the challenge lies in the fact that there are very few such specialists, both in Russia and worldwide, and they come at a high cost. These are not just financial experts, IT professionals, or technicians. They are individuals equally well-versed in management reporting, billing systems, network infrastructure, marketing, and security.
A Revenue Assurance expert can explain why expenses are rising or revenue is falling—not in general terms, but with detailed insights. For instance: Problem A in billing caused revenue to drop by X%; Problem B due to a network outage led to a Y% loss in income; Problem C, related to subscriber fraud, increased the reserve for doubtful debts by Z%. Here's the proposed action plan.
For making well-informed management decisions, this kind of detailed analysis is invaluable, wouldn’t you agree?
— Do you think Revenue Assurance is exclusively a telecom concept, or can it be applied to other industries?
— You know, a few years ago, I consulted for a large e-commerce business with a turnover of several billion rubles. I was able to transfer my telecom experience to a traditional online store and demonstrate how revenue could be increased almost instantly.
Revenue generation processes are fundamentally the same across industries. In telecom, the core consists of switching equipment and a billing system, while in e-commerce, it’s a website with its engine. Sales, customer service, and logistics processes are very similar everywhere. I introduced the same analogy of the water pipe I mentioned earlier, and it turned out that the company was losing revenue during lead processing.
Essentially, a lead in any online business is a potential customer ready to purchase a product or service. But due to inefficiency and poorly coordinated business processes, leads were being lost. Meanwhile, the company was spending a substantial advertising budget to acquire these leads. Isn't that a classic case of Revenue Assurance? It's the same revenue leakage.
This is why I firmly believe that Revenue Assurance is a much broader field than we traditionally consider. It can be implemented in businesses across various industries. All it takes is the will to do so.
— What is the difference between Revenue Assurance and Margin Assurance? This topic is being widely discussed in professional circles today.
— Margin Assurance is a relatively new direction in revenue management. Its essence lies in monitoring not just technological issues and business processes but managing the profitability of customers, products, and services. These areas are partially interconnected. Let me explain as clearly as possible.
In Margin Assurance, we calculate the revenue for each customer by assessing how much the company earns from them. Simultaneously, we evaluate the cost side—how much the company spends to provide services to the same customer based on their actual service usage. From this, the profitability of each customer for the company is calculated. This analysis provides fascinating insights and helps marketing departments design effective strategies for managing the customer base. Different development and retention strategies can be implemented for various customer segments.
You might ask, how does this relate to Revenue Assurance? Here’s the connection: during the analysis of customer profitability, we might discover situations where actual costs are unexpectedly high. We investigate further and sometimes uncover technological issues that may not be detected by other tools.
In this way, Margin Assurance serves as an evolutionary extension and complement to Revenue Assurance. It not only addresses traditional revenue leakage issues but also enables deeper insights into cost efficiency and profitability, creating a more comprehensive view of the business.
— You served as the Chief Financial Officer of the South Macroregion at MTS. Would you say that your experience in Revenue Assurance helped with financial management?
— Absolutely. At the time, I faced several key tasks—enhancing investment efficiency and improving profitability. Funding was opened for the construction and modernization of the network in several regions of Russia, amounting to several billion rubles. Confidence in the efficiency of each business plan was essential.
I suggested applying Margin Assurance methods to evaluate the efficiency of each base station rather than simply relying on the OIBDA (Operating Income Before Depreciation and Amortization) of individual regional branches. We conducted a sort of ABC analysis. All cellular towers were color-coded and plotted on a geographical map. This proved to be a very insightful exercise that highlighted interesting aspects. In some areas, the rent was too high; in others, there were too few subscribers; and in some cases, the location was less than optimal.
Deep data analysis often leads to interesting and non-trivial solutions. You might invest the same amount of money into building a base station, but one might yield X rubles in profit while another yields 2X. The key is not to make the wrong call. This kind of granular approach allows for better-targeted investments and more strategic decision-making.
— As an independent expert and consultant, you're now helping entrepreneurs from various industries look at their businesses from an outsider's perspective. Would you ever consider returning to telecom?
— As they say, never say never. As an independent expert, I’m expanding my expertise across different industries. This has proven to be a very valuable practice, often revealing interesting insights that weren’t visible due to the long-standing perspective. I work with founders and top management teams, helping them restructure business processes and increase profits. This work brings me genuine satisfaction.
In addition, a few years ago, I launched an exciting internet project—the first yacht booking and entertainment platform in Russia. This allowed me to dive deep into digital marketing, which was a new area for me. Expanding one's horizons is always an interesting journey. It's a sort of well-paid hobby that brings a lot of positive emotions. Yachting is magnificent in all its forms.
— Could you stop for a moment to reflect on your professional achievements and contributions to the telecom industry in Russia?
— Everything I’ve shared with you today was implemented in practice and had a positive impact on the company's financial performance. Over more than 20 years in the industry, I’ve achieved a lot, but there are certain accomplishments that I’m especially proud of because they have had a direct impact on improving the lives of millions of people in Russia. In 2014, I managed the process of consolidating business plans for network construction across several Southern regions of Russia. As a result, we secured funding for the construction of a mobile network, allowing people in various towns, where there was no mobile coverage before, to start using mobile phones, which significantly improved their quality of life. This contribution not only had an impact on the telecom industry but also on the country’s population. Later, in 2015, I received a federal award for my contribution to the development of mobile communications in Russia.
Another memorable achievement was changing the principle of call tariffing for subscribers in the South, which was later replicated nationally for all subscribers in Russia. This generated tens of millions of additional revenue for the company and helped reduce expenses related to receivables. Additionally, I initiated changes to more than 40 tariffs and services, which resulted in significant economic benefits for the company. I also won the "Idea Factory" innovation contest twice. It’s difficult to list all my achievements in one interview—we’d need more than an hour to cover it all.
Arsen Valeryevich Lazaryan is an independent expert. From 2008 to 2021, he managed revenue in the Krasnodar and Southern Macro-Regional branches of PJSC "Mobile TeleSystems".
- In 2012, he was recognized as the best manager in the PJSC "MTS" recognition program.
- He was awarded departmental prizes in 2015 and 2020 by the Ministry of Communications and Mass Communications of the Russian Federation and the Ministry of Digital Development, Communications, and Mass Media of the Russian Federation for his contribution to the development of mobile communications in Russia.
- He is the author of numerous methodologies and initiatives in the field of revenue growth and the efficiency of telecom products and services, with proven economic results.
- Arsen is also a participant in national and international professional conferences in the telecommunications and communications industries.
The original article in Russian:
Revenue
Assurance
Assurance
© A.Lazaryan, 2022 - 2025
Revenue
Assurance
Assurance
© A.Lazaryan, 2022 - 2025