Fraud and problems with billing systems could cost mobile operators as much as US$300bn/year by 2016, with African telecommunications providers suffering the most, a new research study has found.

The report, from the UK’s Juniper Research, reckons fraud and billing errors will cost operators nearly 25% of revenues within the next four years.

The report, entitled “Mobile Revenue Assurance & Fraud Management: Business Strategies & Forecasts 2012-2016, found that as the “level of ‘billable events’ has increased — operator-billed revenues reached more than $900bn last year — networks have in turn experienced an upsurge in ‘leakage’ across the revenue cycle from sales to network configuration, rating and billing.”

Although such leakages are often the result of system error — ranging from incorrect billing to chargeable call records not being transmitted to the billing system for rating and charging — networks are also experiencing a sharp rise in fraudulent activity, Juniper says.

According to the report, “revenue leakage” is highest in Africa and the Middle East, where there are particularly high rates of Sim-card cloning and interconnection bypass fraud, where fraudsters avoid paying call termination fees.

However, according to report co-author Windsor Holden, the introduction of a more formalised risk management approach could “significantly alleviate” these problems.

“By consolidating and automating their operational processes, mobile network operators can establish 360-degree visibility of the complete revenue chain in order to detect hidden losses or fraudulent activity rapidly,” Holden says. “What is required is a combination of real-time analytics and proactive business intelligence.”

It argues that through the implementation of revenue assurance and fraud management solutions, network operators will be able to reduce the scale of potential global leakage by more than $250bn by 2016. — (c) 2012 NewsCentral Media