Challenges and Typical Model Purposes
Telecom operators have enormously data volumes and many systems to handle the business, it is not unusual to see an operator having over 20 different systems just to handle billing of instance. They purchase companies, operate in different countries, often restructure organizations and product structures and offer a variety of products that change character faster then any other industry. Products are “produced” as single products but sold as offerings and packages, where many products are free. Previously we paid for having voice mail, for text messages and for data. Besides internal challenges with generating a profit and loss statement for segments, regions, products, offerings etc., telecom operators are often under auditing by national regulators, a process that can be very time consuming for an operator and it can be difficult to document all costs but with a Cost Transparent Model, all questions can be answered on the spot and a visit do not have to take many days.
National regulators require operators to prove their network costs and products costs and auditor require operators to prove costs charged from Group Service Operations (IT, Finance, HR etc.) to subsidiaries across boarders. Many of our Telecom clients have been audited as well and always without any findings or comments. National regulators around the world use well known world wide Telecom expert (as they claim to be) to help them doing the audit review and model evaluation, and never have they had any comment to the models we have designed and implemented, which not just makes us glad but also prove that we are making things right whether it is network costing, LRIC or charge-back or in-house service costing.
IT spends are huge within Telecom, and we often create IT costing and Charge-back models to create an insight to the huge investments and running costs, where one way to reduce expenses is to outsource, and before doing such a strategic decision, it is very important to understand your own expenses and the full cause and effect of outsourcing certain tasks. Read more in the In-house Services section.
Case example
One of EUROPE’S LARGEST TELECOM OPERATORS, who offers fixed and mobile phone, broadband and TV in 18 countries and is in top 5 in all countries within almost all areas, contacted us to help them design and implement a model and it was high priority, as their current spread sheet model had become too complex and they could not update it. They had used another consultancy but they could not come up with a satisfying solution. We designed and implemented a model together with the operator so they could do their year end closing and reporting. Afterwards we have extended the model several times adding more and more features as the internal interest and usage of the model increases. Today, the model is showing profitability for products and segments, solve LRIC and reporting to national regulators and it gives a full P&L per business unit (Consumer, Business and Operator). It gives the possibility to analyze costs for network platform from raw platforms to delivering platforms with direct and indirect costs, with and without IT systems and much more. The model have changed from monthly to quarterly runs and they have changed organizational and product structure several time over the year, all without the core model structure had to be redesigned. The model is operated and maintained by one person, and the model reporting is done one day after the financial data are closed.
Besides above model, we also assisted in making a calculating and settlement solution for TV. The solution calculating number of subscriptions for the different TV-stations and packages and use the different rates and rules from network stations to calculate the monthly payment.