How is your VNO doing? Is it at the top of its game, or is it just about getting by? Either way, there are savings to be made.
In the past, analytics software, and the data scientists required to interpret the outputs, have been too expensive for VNOs to consider, but these tools are now available on a Software as a Service (SaaS) basis, and are often packaged with a managed service or consultancy. This means that the key to unlocking substantial savings for your VNO is more affordable than ever. Read on to learn how analytical insight can revitalise your VNO, regardless of its current state of health.
Optimising wholesale costs
Wholesale costs typically represent 40 – 50% of a VNO’s total expenditure, so optimising these costs is essential for revitalising your VNO. By analysing customer usage patterns and churn propensity, predictive algorithms can be deployed to match customer consumption patterns to wholesale buying decisions, reducing wastage and overpayment. Optimising wholesale costs can result in savings of 5-14%, which would represent 2.5-7% of your total costs.
Assuring revenues and wholesale costs
Revenue and wholesale cost assurance tools can be expensive, so VNOs may not have used them in the past, believing that the costs outweigh the savings. However, lower cost revenue assurance tools can now be supplied on a SaaS basis, often as a managed service or with consultancy. This means that you can get your hands on the data you need without having to fork out for costly specialist IT resources. Access to data enables you to focus on the revenue assurance challenges that your VNO faces, especially those that are most likely to produce quick wins, such as bad debt, roaming costs, network services reconciliation and wholesale invoice assurance.
The Communications Fraud Control Association (CFCA) calculated that the telecoms industry lost around $38 billion to fraud in 2015. VNOs are more vulnerable to fraud losses than network operators as their lack of expertise and limited budget to invest in and maintain the latest fraud detection systems leaves them at a competitive disadvantage. VNOs typically operate on very tight margins and have to pay the wholesale element of fraudulent usage, regardless of whether their customer also pays, so the results can be devastating. Fraud management tools operate 24/7 and combine early detection alerting with workflow functionality so that fraudulent or suspicious activity can be stopped long before it is spotted by a human operator.
The mobile market is saturated and there are few new customers to recruit, so if you want new customers, you must entice them away from your competitors; a costly endeavour. It is much cheaper to retain and upsell to existing customers. In fact, Bain & Company, the inventor of the Net Promoter Score, found that a 5% increase in customer retention rates increased profitability by between 25 and 95%. Churn prediction analytics can help you to understand why and when your customers are likely to churn, helping you to determine the likely effect of campaigns, product launches and new pricing strategies on your existing customer base.
Data analytics can quickly detect broken processes and data anomalies, and should be used to monitor and report on failing processes. As such, they can be used as a stepping stone towards full automation. VNOs should aspire towards full automation as well-automated processes are faster and more agile than those requiring human intervention. Automation reduces both the direct costs of employing staff and fixing their inevitable errors, and also the indirect costs associated with a slower time-to-market and increased customer churn as a result of convoluted and frustrating processes.
Having access to the right data, and to the specialists who can interpret it for you, will transform your VNO into a data-driven business. This will enable your VNO to grow and thrive, regardless of its current state of health.
 Global Telecom Fraud Decreases by 18%, Reaches New Low’, CFCA, http://www.cfca.org/pdf/survey/2015_CFCA_Global_Fraud_Loss_Survey_Press_Release.pdf