Communications Industry Losing Billions Each Year Through Revenue Leakage
According to KPMG Survey

TORONTO, April 28 /CNW/ - Revenue leakage is costing the global communications industry an estimated US$40 billion each year, an average of 1-3 percent of total revenues, according to a recently launched KPMG International survey, Revenue Assurance in Telecommunications - Progressing or Preserving. About 60 percent of operators surveyed estimated that less than half of leakages identified were ever recovered from subscribers or partners.

"The Global Revenue Assurance Survey provides results on an international basis," said Kathy Cunningham, National Sector Lead Partner for KPMG's Communications and Media practice. "However, they are representative of what we see and hear from communications companies in Canada. This is of concern, as leakage of even 1 percent translates into tens of millions of dollars of revenue and ultimately net income. Given the increased competition in Canada and the rapid changes in what consumers are demanding and ultimately being billed for, the issue of ensuring you are billing all of the services a consumer is using becomes increasingly critical."

The survey covers 74 communications operators in 46 countries. It takes an in-depth look at how Revenue Assurance is managed in communications companies worldwide and assesses the operators' concerns and expectations for the future.

Leakage may arise from a variety of deficiencies in either recording or recognizing the source, type, or amount of revenue, such as billing at incorrect rates or charging local rates when long-distance charges should apply, and even faulty processes, as in situations where chargeable call records are not appropriately passed on to the billing systems.

The survey found that significant configuration changes in the network were rated as the most vulnerable to revenue leakage, followed by new product development and tariff configuration.

    
    Statistics indicate:

    -   About 40 percent of communications companies estimated that less than
        half of total leakage was identified by the Revenue Assurance
        function. Large numbers of respondents indicated that less than 10
        percent of leakages were identified. As a result, overall losses to
        the industry worldwide may be significantly higher than estimated

    -   More than 45 percent of respondents ranked "prepaid accounts" as the
        most vulnerable revenue stream susceptible to leakage

    -   60 percent of respondents acknowledge that they are hampered in their
        efforts to reduce revenue leakage because their Revenue Assurance
        teams lack the necessary skills to be effective.
    

KPMG has spokespersons available to provide commentary, write articles, and present on the findings and issues discussed in Revenue Assurance in Telecommunications - Progressing or Preserving, as well as to provide analysis and strategies to help stem leakage.

About KPMG

KPMG LLP, the audit, tax and advisory firm (kpmg.ca), a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 140,000 professionals, including more than 7,900 partners, in 146 countries.

The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.

For further information: Media Contacts: Mark Klein, Manager, Media Relations, KPMG, [phone], [email protected]; Julie Bannerjea, Head of Media Relations, KPMG, [phone], [email protected]