Raf final cy
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This 5-day certification program provides a comprehensive introduction to revenue assurance based on GRAPA standards. Day 1 focuses on revenue governance, including the value of revenue assurance, the GRAPA framework, and the revenue assurance lifecycle. Attendees will learn the rational for revenue assurance and how to structure their role effectively. GRAPA standards provide a systematic, practical approach to protecting revenue streams. Day 1 establishes the foundation for understanding revenue assurance.
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Revenue Assurance Foundations
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RAF101: Revenue Governance
Detailed Overview of RA – Background, rationalization, history,
and structure of GRAPA's approach to RA. Provides the foundation
for standard controls, RA lifecycle, revenue mapping, and noise.
RAF102: Network Foundations
Access, Service Delivery and AAA – Focuses on the underlying
infrastructure that makes any telecommunications system work.
How telecom services are delivered, how delivery is organized,
and how billing can occur with integrity.
RAF103: Billing Foundations
Assurance of Billing System/Billling Model – Learn different
billing systems (Traditional Postpaid, Classical Prepaid, Radius,
Diamter, Specialized, and Convergent Billing Systems). Learn
how to perform a complete mapping of the revenue stream.
RAF104: Partner Foundations
Partner Business Models/Risks – Assurance of partner-based
business models [Interconnect (CABS), roaming, content, VNO, Get Certified This Week!
and Outsourcing] and risk to the operational model. Learn the
standard GRAPA approach to these models. Join 500 other professionals!
RAF105: Profit Foundations
Margin Assurance/Market Assurance – Learn how to set up,
organize, and implement Margin Assurance and Market Assurance.
Margin Assurance focuses on the True Revenue earned from
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the sale of a service. Learn what Market Assurance is and how it ‡ 5HSULRULWL]H RXU HIIRUWV
delivers value.
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; Principles of Scope Management
GRAPA Standard Controls and Applications
; Principles of Revenue Realization (Margin, Market, New Products) GRAPA Benchmarks
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![:H ZLOO WKHQ LQWURGXFH WKH FRQFHSW RI 7ULSOH $ –Authentication, Authorization, and Ac-
counting–which forms the basis for all revenue management integrity.
Based upon these core principles, we will provide a review of curcuit-based architecture and the history of
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‡ Learn the GRAPA standard approach to simplify and assure any network environment.
‡ Discover how to assure the transactional integrity of any network without becoming a net-
work engineer
‡ Master the use of the GRAPA’s simple building blocks and apply them to any environment.
‡ Learn WKH PHDQLQJ RI WKH WHUPV /7( 1*1 *356 DQG DOO WKH RWKHU QH[W JHQHUDWLRQ WHFK-
nologies and understand why they're important for RA and how to assure them
‡ See how the GRAPA Domain Analysis Methodology (DAM©) can provide them with the tools
necessary to assess the measurability, trackability, and securability of any environment in
terms that a business can understand
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‡ Learn the GRAPA standard controls for each of these environments and how to get network
to implement them
‡ Utilize FDVH VWXGLHV DQG H[DPSOHV RI FLFUXLW ,3 DQG EURDGFDVW DFFHVV DQG GHOLYHU DQG PDS
them to their environment in order to assure they understand the practical applications.
GRAPA Certification Credit Key Concepts include:
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Principles of circuit technology
Credit for the following areas in line with GRAPA’s “Body of Knowledge”
How to make and read a CDR
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Key network controls and methods
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Topology, Security, Control Protocol, Transaction Control,
; Access architecture components and organization
CDR Generation Sequence, CDR Generation, CDR Transport
; SS7 - Principles, Components, and Dialects
Media characteristics and controls (wireless and wireline)
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History of Circuit, Packet, and Broadcast Technology
; WAP - Principles, Components, and Dialects How to assure and bill circuit and packet transactions
; Packet Service Delivery Alternative billing models for packet and their consequences
; Product Architectures (VOIP, SMS, MMS, WAP, DSL, WiFi) Command and control protocols
; Anatomy of a CDR (How made, how delivered, how assured) Understanding:
; 1HWZRUN $VVXUDQFH (GRAPA standard controls and methods) SS7, SIP, IP, Radius, Diamater, WAP, DOCSIS, IMS
; GPRS Billing Business Models and Architecture and how to use them for assurance
; * DQG 1*1 %LOOLQJ %XVLQHVV 0RGHOV DQG $UFKLWHFWXUH The Domain Analysis Methodology (DAM©)
; Fundamentals of Wireless Media Access architecture principles for GSM, CDMA, WIMAX,
; Fundamentals of Wireline Media :L¿ FRSSHU FDEOH ¿EHU
; Service delivery architecture components and organization Service delivery architectures: voice-circuit, voice-packet
; 92,3 3ULQFLSOHV DQG DSSOLFDWLRQV (VOIP), data-circuit, data-packet, cable-broadcast,
; Product Architectures (Cable, Wimax, Leased line, Burstable, Fiber, Microwave)
DOCSIS 3.0, Internet, interconnect, satellite, microwave
; AAA for Access and Service Delivery
3G, 4G, LTE, NGN, GPRS, UMTS, IMS
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C-level Revenue Assurance
Using RA to accelerate profit and mitigate market risk
Margin Assurance and Market Assurance
Overview
The last day of RAF is designed to provide the student with a comprehensive understanding of
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departments are playing in the protection and enhancement of those revenue streams. Students
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margin assurance and market assurance.
Students will also learn about new product development and the methods utilized to increase the
chances of success and how to streamline and expedite the new product development process.
Practical Applications: Our commitment is that candidates who take the training seri-
ously, participate enthusiastically in activities, and pass the certification exams will:
Testimonial
‡ Learn how successful telecoms executives make strategic decisions to positively
impact the top line success of the telco, based on hard facts, data and GRAPA’s Prior to joining the RA Academy training, my
VFLHQWL¿F VVWHPDWLF DSSURDFK RA approach was not structured. I was doing
everything not in a standardize manner. Now,
‡ Gain D FOHDU ¿QDQFLDO SHUVSHFWLYH RQ WHOFR PDUJLQV SUR¿WDELOLW DQG KRZ RSHUDWLRQV l have a better risk mapping on how to handle
FDQ EH IRFXVHG RQ UHYHQXH KDUYHVWLQJ ZLWKRXW EHFRPLQJ D ¿QDQFH H[SHUW RA in my company. I shall adapt the GRAPA
standards with a systematic and holistic
‡ Participate LQ DQG LPSOHPHQW ¿QDQFLDO FRQWUROV RYHU QHZ SURGXFW GHYHORSPHQW approach to minimize risk to an optimal level.
promotions and deals in order to make them go faster and be more effective I now know that I have more responsibility to
deliver to the company and I shall add value
‡ Apply GRAPA’s standards and Domain Analysis Methodology to get control over based on my knowledge. I thank GRAPA for it.
churn, market, and brand risks Senior Manager
Fraud and Revenue Assurance, Malaysia
‡ Utilize case studies and examples of new product launches, promotions, and
bundles and map these cases to their environment in order to assure they
understand the practical applications.
GRAPA Certification Credit
Key Concepts include:
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Competency Credit for the following areas in line with GRAPA’s “Body of
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Knowledge”
Red vs Black Margins
; Margin controls structure, framework, and domains Actual vs Shadow Costs
; Asset margin assurance Standard Margin Forensics
; Rate margin assurance High Risk Margin Domains
Market Assurance
; Bundle margin assurance
Revenue Assurance for Churn
; Principles of subsidy and invisible margin program controls
Churn and Market Assurance Forensics and Controls
; Principles of market assurance XPXODWLYH (IIHFW RQWUROV
; Principles of margin assurance Targeting Controls
; %UDQG HTXLW DVVXUDQFH DQG FRQWUROV Asset Margin Assurance
; The new product development process /2% 0DUJLQ $VVXUDQFH
; 1HZ SURGXFW IDPLO PDQDJHPHQW Promotion Margin Assurance
; 3LSHOLQHJDWHZD PHWKRGRORJLHV Bundle Margin Assurance
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![Why We are the Leaders in Training Telco Professionals Around the Globe
Maximizing Revenue Potential and Minimizing Risk to those Revenues with Proven Techniques and Strategies
The Instructors
Join the leading Revenue Assurance focused training events. Featuring exclusive
presentations, real-world examples of procedures, solutions, and strategies that have
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After providing training to hundreds of revenue assurance professionals around the
globe, we are pleased to announce our improved course offering.
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after completing a rigorous and exhaustive training program whose extensive curriculum
spans the broad and complex landscape of revenue assurance
Depth of knowledge – The topics and examples are “narrow and deep” rather than broad
and vague, presenting you with focused, highly targeted information that adds real value. Z D , world renowned
Tailored content – Training is adjusted to align the needs of the students to the available
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your own systems, and provide clues about what you need help with. The principles and Z
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Relevancy – Class material is based on the foundations of GRAPA. GRAPA members from ^ ,
every geography, type of carrier, major type of technology, and carriers of all sizes review and d d Z
approve these standard approaches. The material serves as the foundation for an industry ,
standard approach that is applicable to everyone, and yet easily focused to the needs of Z D
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Based on real-world situations – The majority of the training is experience-based “standard
practices” in revenue assurance, harvested from the many revenue assurance professionals
who participate in “practices surveys,” “strategy sessions,” and other information-sharing
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material is never based on speculation, guesses, or unvalidated information.
Interactive – The workshops are more than lecture sessions. RAA classes are participative
and interactive and students are expected to proactively join in discussions, problem solve,
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and other students. Lunch and breaks are devised to facilitate more intimate conversation.
Professional development – Students master vocabulary needed for creating a sense
of professional identity and opportunities with other like-minded people in the industry that
share common goals and issues.
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![Contact Us
Tel +1- 847-930- 3610
Fax +1- 707-276-7676
www.grapatel.com
Email info@grapatel.com www.ra-academy.org
2011 Schedule:
21 Feb - 4 Mar London, UK
03-14 Apr Sharm el Sheikh, Egypt
For the most up-to-date list of upcoming events
16-27 May Cape Town, South Africa
13-17 Jun Chicago, USA please visit our website:
04-08 Jul Islamabad, Pakistan www.ra-academy.org/revenue_assurance_train-
08-12 Aug Sydney, Australia
22-26 Aug Shanghai, China ing/upcoming_events.html
12-23 Sep Punta Cana, Dominican Republic
10-21 Oct Barcelona, Spain
2FW 1RY 'XEDL 8$(
07-11 Nov Nairobi, Kenya
05-16 Dec Orlando, USA
We schedule courses and venues based on demand, so please be sure to tell us if you are interested in a particular class and location. We only move
forward with our planning if there is enough interest. To make these trainings happen we need commitment from a minimum number of delegates.
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Telco executives rave about the courses….
The Revenue Assurance core curriculum course has been one of the best courses I have ever attended. The ability of the
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apply what I have learned in the course in my work.
Revenue Assurance Manager, The Netherlands
Rob really knows his stuff and is very passionate about it. If you really want to get a wider perspective of what revenue assur-
ance is really about, then he's the man to go to! The course is intense and extensive but nonetheless highly enjoyable. I would
highly recommend the course equally to those with both a technical or non technical interest in the subject.
Manager, Dubai
About us:
The Revenue Assurance Academy (RAA) is the exclusive training organization of GRAPA. GRAPA has over 5000 registered members and has
distributed more than 3500 copies of its 2009 standards book. The Revenue Assurance Foundations (RAF) core curriculum is the Academy's
latest curriculum offering, providing revolutionary, relevant material. By offering events that combine benchmark development, sharing of standard
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of standard practices and rapid integration of those practices into the participating telco environments.
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venues (attended by delegates from many operators and services providers, which promotes the sharing of practices) as well as onsite for a private,
more personalized and focused training for a company’s staff.
Some of what makes our training so unique:
1. Based entirely on the GRAPA standards of professional revenue assurance practices
2. Taught by Rob Mattison, the world’s leading authority on the practice of revenue assurance in telecommunications, winner of many awards for his
work in this area, author of The Revenue Assurance Standards--2009, The Revenue Assurance Handbook, and dozens of whitepapers.
3. Focused heavily on practical experience, not theory
Visit our website to read some great reviews from students who have attended our training: ZZZUDDFDGHPRUJ5$$BLQIRWHVWLPRQLDOVKWPO
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![Revenue Assurance Foundations
RAF102: Network Foundations
Packet
Basic internet topology Basic internet topology
IP Address IP Address IP Address IP Address
Packetization
© Copyright 2009 GRAPA Rob Mattison 13 © Copyright 2009 GRAPA Rob Mattison 14
Basic internet topology Internet Commands
• HTTP
IP Address IP Address
• FTP
• TELNET
• MAIL
© Copyright 2009 GRAPA Rob Mattison 15 © Copyright 2009 GRAPA Rob Mattison 16
HTTP
• HEAD
– Asks for the response identical to the one that would correspond to a GET request, but without the response
body. This is useful for retrieving meta-information written in response headers, without having to transport
the entire content.
• GET
– Requests a representation of the specified resource. By far the most common method used on the Web
today. Should not be used for operations that cause side-effects (using it for actions in web applications is a
common misuse). See 'safe methods' below.
• POST
– Submits data to be processed (e.g. from an HTML form) to the identified resource. The data is included in
the body of the request. This may result in the creation of a new resource or the updates of existing
resources or both
both.
• PUT
– Uploads a representation of the specified resource.
• DELETE
– Deletes the specified resource.
• TRACE
– Echoes back the received request, so that a client can see what intermediate servers are adding or
changing in the request.
• OPTIONS
– Returns the HTTP methods that the server supports for specified URI. This can be used to check the
functionality of a web server by requesting '*' instead of a specific resource.
• CONNECT
– Converts the request connection to a transparent TCP/IP tunnel, usually to facilitate SSL-encrypted
communication (HTTPS) through an unencrypted HTTP proxy.[1]
• `
© Copyright 2009 GRAPA Rob Mattison 17
© 2011 Rob Mattison www.ra-academy.org
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![Revenue Assurance Foundations
RAF102: Network Foundations
VOIP-Skype-SIP
OnlineNet
Billing
Server Skype to Skype
All other consumer competitors have
dropped out
$30 For Skype to Skype
ATT announce to bill per second
SIP The protocol can be used for creating,
modifying and terminating two-party
The Session Initiation Protocol (SIP) is (unicast) or multiparty (multicast) sessions
a signalling protocol, widely used for consisting of one or several media
setting up and tearing down multimedia
g p g streams.
streams The modification can involve
communication sessions such as voice changing addresses or ports, inviting more
and video calls over the Internet participants, adding or deleting media
streams, etc
SIP is based on the request-
response paradigm.
SIP was originally designed by Henning The following sequence is a simple
Schulzrinne (Columbia University) and Mark
Handley (UCL) starting in 1996. The latest
example of a call set-up procedure:
version of the specification is RFC 3261[1] from 1. To initiate a session, the caller (or User
the IETF SIP Working Group.[2] In November Agent Client) sends a request with the SIP
2000, SIP was accepted as a 3GPP signaling URL of the called party.
protocol and permanent element of the IMS
architecture for IP-based streaming multimedia
services in cellular systems.
© 2011 Rob Mattison www.ra-academy.org
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![Revenue Assurance Foundations
RAF103: Billing Foundations
Radius
RADIUS History
Remote Authentication Dial In User Service (RADIUS) is a
networking protocol that provides centralized Authentication,
Authorization, and Accounting (AAA) management for computers to
connect and use a network service.
RADIUS was developed by Livingston Enterprises, Inc., in 1991 as an
access server authentication and accounting protocol and later
brought i t th I t
b ht into the Internet E i i Task Force (IETF) standards.[1]
t Engineering T k F t d d
Because of the broad support and the ubiquitous nature of the
RADIUS protocol, it is often used by ISPs and enterprises to manage
access to the Internet or internal networks, wireless networks, and
integrated e-mail services. These networks may incorporate modems,
DSL, access points, VPNs, network ports, web servers, etc.[2]
RADIUS AND DIAMETER
IP Billing
Remote Authentication Dial In User Service (RADIUS) Where is Radius Applied?
Protocol used for providing authentication, authorization and Original DialUp
accounting services between an access point and an
authentication server. Most IP based systems
Provides a central user database that can be accessed by
different servers Many modern Variations
Authenticates users (validate credentials)
Provides configuration information
RADIUS server checks for the validity of a user, requesting
access to a network.
It authorizes the user to access the network, if the information
stored in a database is verified
1/21/2011 3
IPDR Movement
One industry effort that may facilitate this is the
standard IP detail record (IPDR) format being
DHCP
defined by IPDR.org.
bts
SERVER
The IPDR is intended to be an extensible format that
AAA
SERVER captures meaningful usage i f
i f l information and cost
i d
ASN BRAS components for any IP-based service.
GATEWAY
bts
A common IPDR would reduce the need for
mediation ― at least within the IP world ― by
ASN(RADIO)
HOME
ACCESS pushing consistent representation down to the device
SERVER
level.
CSN (NETWORK)
© 2011 Rob Mattison www.ra-academy.org
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![Revenue Assurance Foundations
RAF103: Billing Foundations
Radius
EAP EAP Methods
IEEE 802.1x has introduced three entities: supplicant An EAP packet has four fields: code, identifier, length, and
data. EAP constitutes bidirectional communication between
(user device), authenticator (ASN-GW in WiMAX), supplicant and authentication server.
authentication server (RADIUS server). EAP security varies depending on the EAP method selected:
EAP-TLS,
The goal of 802.1x/EAP is to distribute the shared
g / PEAP,
PEAP
key (master key) between the supplicant and the EAP-TTLS,
authentication server. EAP-FAST [RFC4851],
EAP-SIM, EAPAKA,
EAP-MD5,
EAP-PSK,
EAP-IKEv2, etc.
EAP-TTLS
EAP-TTLS employs tunneled TLS and removes the need of Radius Diameter
client authentication but server authentication to client is
required. UDP Protocol TCP / STCP Protocol
EAP-TTLS introduces a TTLS server which establishes a secure Application Driven Application Driven
tunnel to authenticate the client.
The tunnel provides protectionfrom eavesdropping and man-
Th t l id t ti f d i d
in-the-middle attack.
TTLS server is responsible to transmit AVPs sent by client to
the AAA server.
EAP-TTLS also provides supplicant identity protection and
data ciphering suite negotiation in addition to the features
offered by EAP-TLS
Authentication Protocols Authorization capabilities
NAIs (Network Access Identifier), According to RFC 3127 both RADIUS and Diameter
CHAP (Challenge Handshake Authentication offer some support for access rules, authorization
Protocol), restrictions, and filters.
EAP (Extensible Authentication Protocol) and
Protocol), Neither of them meets the requirements concerning
q g
PAP (Password Authentication Protocol); this area totally, but for example the abilities of
proxy brokers to deny access are good in both
protocols.
.
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![Revenue Assurance Foundations
RAF103: Billing Foundations
Radius
Accounting capabilities Server-initiated messages
Basic accounting capabilities of RADIUS and Diameter are RADIUS specification does not support server-
similar.
Internetworking real-time accounting capabilties initiated messages.
Account reporting happens synchronously with events in a time- RADIUS acts a pure client-server implementation:
scale of seconds.
Accounting
Acco nting timestamps the client makes a request, and the server replies.
q , p
Dynamic accounting - that is, accounting for dynamic
authentication and authorization.
Guaranteed delivery of accounting information with application Credit limit/ account suspension will not be forced
level acknowledgements,
to client until next poll
Extensible accounting records.
The delivery mechanisms relates to the retransmission
procedure and the protocol extensibility
Error Handling Radius Authentication
RADIUS does not support error messages.
When faults occur, RADIUS simply silently discards packets - drops them
without further processing. RADIUS entity authentication applies only between
This applies for example to packets with an unknown code, or packets the
length of which is shorter than it says on the length field.
two adjacent nodes.
In other words, invalid packets are always silently discarded. [1] Thus there is no end-to-end authentication with
Diameter has an error reporting mechanism. p y
proxy RADIUS.
Diameter messages are silently discarded only, when it is the most
suitable way to solve the problem. RADIUS authentication scheme is based on the
For example received duplicate answers are still silently discarded. [2]
Application error messages are informational, concept of shared secrets, where each two directly
Tell about a transient or permanent failure - or even about success. communicating parties must have a shared secret.
Error explanation is stored in Result-Code AVP
read by the peer the message of which originated the error.
Protocol errors are procedural / routing related
Report on the way that each proxy and relay agent on the transfer path may
try to correct the error.
Presence of protocol errors is always stated in the protocol header as one of
the control bits, the E bit, set.
Diameter authentication UDR
Diameter's hop-by-hop authentication is guaranteed by TLS or IPSec. In offline accounting, packet data accounting has a
They both provide security across a transport connection as long as tiered architecture:
there are no untrusted third party agents on the transport path. Airlink and IPlink records.
End-to-end security Airlink records are mainly number of bytes/packets
Diameter agents complicate the entity authentication procedure. dropped at the BS.
As data is routed via relaysor proxies the former authentication method
proxies,
is not sufcient any more. The serving ASN merges Airlink and IPlink records into User
However, Diameter's end-to-end security framework provide
Data Records (UDRs) and sends to home AAA server.
message origin authentication also when there are relays or proxies UDR is created when the R6 connection is established. UDR
present. can be transferred when there is handover.
The security offered by translation agents depends on the other ASN uses RADIUS-Accounting-Request-Start and RADIUS-
protocol as well Accounting-Request-Stop messages to start and stop the
accounting in the server
© 2011 Rob Mattison www.ra-academy.org
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![Revenue Assurance Foundations
RAF104: Partner Foundations
Roaming: Prepaid USSD Billing
What is USSD
USSD Roaming
• GSM network service providing for fast
communication between the user and an
application.
• The underlying technology resembles
SMS, both in technical and functional
aspect, but has a number of benefits that
will be disclosed further.
2001
Rob Mattison
The Revenue Assurance Academy
+1-847-426-2098 www.ra-academy.org 1
© Copyright 2009 Rob Mattison 2
• USSD is session-oriented technology; • Initially USSD was employed to allow subscribers to
manage their profiles in HLR and interact with services
data transfer is performed within one embedded in HLR.
session. • Later, the technology was improved to include external
• Services, built on USSD resemble applications.
• To date, USSD is the best choice to build informational
Interactive Voice Response [IVR] systems. services with underlying dialogs:
• Th major difference from IVR is th t
The j diff f i that – information retrieval,
USSD does not involve voice channels to – mobile banking,
– customer care, etc.
establish connection between service and • Mobile operators worldwide successfully implement
subscriber terminal. USSD.
3
Rob Mattison Rob Mattison
• How it works • Characters * and #, framing the dialed number,
Subscriber checks balance of account with operator. differentiate a request to USSD-application from a trivial
• At the USSD-gateway level, the respective service has phone call.
the number 100 assigned. • USSD instruction is sent over signaling channels to the
• To utilize the service a subscriber dials the sequence switch, then through VLR to HLR, further to USSD-
*100# and clicks send to send the request- gateway that routes it to respective USSD-application.
• The same operation a subscriber p
p performs to dial a • USSD-application interacts with billing system database,
phone number. receives necessary info and sends it in USSD packet to
• Most terminals will display Requesting instead of the subscriber terminal.
traditional Calling, indicating that GSM network • Content of the packet is displayed on the terminal. If
attempts to process your USSD request. business logic of USSD-application envisages further
communication with subscriber, the session does not
terminate.
• Specifically, a subscriber can perform a transaction with
a set of services or receive additional info.
Rob Mattison Rob Mattison
© 2011 Rob Mattison www.ra-academy.org
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![Revenue Assurance Foundations
RAF105: Profit Foundations
Network Asset Assurance
Improve profit by the more intelligent
utilization, acquisition, organization or
maintenance of network assets
Maintenance The Revenue Stream of the Telco is
• Adjust MTTR / Replacement Rate based upon the dependent upon network assets in the
revenue exposure that network element outage field to support, generate and account for
represents
that revenue
Asset Acquisition
When network assets fail, or when
• Determine what/when/where assets should be
added based upon revenue risk (as opposed to networks are designed poorly, there can
traffic realization) [question the all traffic is be serious revenue consequences
profitable assumption]
Is the process of : Planning, design and the effective
• Assessing and measuring the risk to revenue (the management of the network has always
actual revenue loss) associated with the failure of been the responsibility of network
network assets
engineering and the NOCC.
g g
• Defining appropriate levels of corrections, controls
D fi i i t l l f ti t l
and compliance to
In the “traditional” telco operations
Monitor the risk to revenue (or actual revenue loss) model, the responsibility for the
Measure the risk “soundness” of the network has been a
Contain the risk to revenue network operations responsibility
© 2011 Rob Mattison www.ra-academy.org
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![Revenue Assurance Foundations
RAF105: Profit Foundations
Controls, Compliance Quantification
Problem Summary
Controls, Compliance and Quantification
Controls, Compliance and Quantification
Relate A to B???
• Marketing activity occurs and is
targeted based upon one criteria
(segmentation)
• Revenue tracking is based upon
another criteria (customer usage
behavior … ie sales)
Challenge #1 Challenge #2
Controls, Compliance and Quantification
Marketing is done at the SEGMENT level – there is usually Controls, Compliance and Quantification Marketing impacts are only meaningful when measured over
no way to provide precise TARGET information time. (Cumulative effect is what counts0
Solution: Solution:
• Track activity historical
• Define the least common denominator
• Do not measure or report based upon [point in time].
(Map Segment to Customer)
• Shift to cumulative impact accountability for all
• Create marketing accountability (define all activity
programs in terms of market segment Result:
target and impact) – Reality in assessment of program impacts
Result: – Its not about fair.. Its about truth. If conflicting
programs confuse customers and one program
Ability to track marketing activity in nullifies another THAT is what is important
terms of results that are measurable
Challenge #3
Developing the Solution
Controls, Compliance and Quantification
Controls, Compliance and Quantification
Conflicting goals for market activities all have positive and
negative consequences. Which is correct?
• Building the environment that allows
Solution: for the implementation of a
• WAR Framework
• Measure overall impact on customer and market comprehensive, dependable and
• Do not ISOLATE one perspective meaningful market assurance
• Balanced assessment
environment is not:
Result:
– True perspective on what is happening in the market – Easy
– Fact based, reality based, quantifiable data – People
can argue about which result is desired, not about
– Fast
which is true – Cheap
© 2011 Rob Mattison www.ra-academy.org
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Raf final cy
- 1. REVENUE ASSURANCE TRAINING Revenue Assurance Foundations )LYH'D HUWL¿FDWLRQ 3URJUDP RAF Five-Day HUWL¿FDWLRQ 3URJUDP RAF101: Revenue Governance Detailed Overview of RA – Background, rationalization, history, and structure of GRAPA's approach to RA. Provides the foundation for standard controls, RA lifecycle, revenue mapping, and noise. RAF102: Network Foundations Access, Service Delivery and AAA – Focuses on the underlying infrastructure that makes any telecommunications system work. How telecom services are delivered, how delivery is organized, and how billing can occur with integrity. RAF103: Billing Foundations Assurance of Billing System/Billling Model – Learn different billing systems (Traditional Postpaid, Classical Prepaid, Radius, Diamter, Specialized, and Convergent Billing Systems). Learn how to perform a complete mapping of the revenue stream. RAF104: Partner Foundations Partner Business Models/Risks – Assurance of partner-based business models [Interconnect (CABS), roaming, content, VNO, Get Certified This Week! and Outsourcing] and risk to the operational model. Learn the standard GRAPA approach to these models. Join 500 other professionals! RAF105: Profit Foundations Margin Assurance/Market Assurance – Learn how to set up, organize, and implement Margin Assurance and Market Assurance. Margin Assurance focuses on the True Revenue earned from /HDUQ +RZ WR 5HLQYHQW RXU 5HYHQXH $VVXUDQFH $FWLYLW the sale of a service. Learn what Market Assurance is and how it ‡ 5HSULRULWL]H RXU HIIRUWV delivers value. ‡ 5HGXFH FRVWV DQG LQFUHDVH LPSDFW ‡ 0DNH UHYHQXH DVVXUDQFH D PRUH PLVVLRQFULWLFDO IXQFWLRQ ‡ $GG PRUH YDOXH WR RXU RUJDQL]DWLRQ 12: ‡ KDQJH RXU XQGHUVWDQGLQJ RI WKH UROH RI UHYHQXH DVVXUDQFH LQ WHOHFRPPXQLFDWLRQV Learn more about GRAPA at www.grapatel.com For more information on training events, visit www.ra-academy.org
- 2. Table of Contents Why RA Professionals are Attending our Workshops...................................................................................................................3 Courses Offered at this Event: Revenue Assurance Foundations: Week at a Glance.....................................................................................................................4 Day 1 RAF101: Revenue Governance.............................................................................................................................5 Day 2 RAF102: Network Foundations.............................................................................................................................6 Day 3 RAF103: Billing Foundations................................................................................................................................7 Day 4 RAF104: Partner Foundations..............................................................................................................................8 Day 5 RAF105: Profit Foundations.................................................................................................................................9 The Revenue Assurance Academy Experience.............................................................................................................................10 About the Training / The Instructors...............................................................................................................................................11 Contact Us / Event Schedule...........................................................................................................................................................12
- 3. Why should you attend the RAA training events? It’s simple. The Revenue Assurance Academy provides RA professionals with the best, most comprehensive, and most authoritative source of information about how revenue assurance is actually practiced by carriers around the world. We do not waste your time with theoreti- cal discussions or examples based on one person's limited experience at one or two locations. Do NOT attend the RA Foundations training if: RX DOUHDG NQRZ KRZ WR DVVXUH WKRVH GLIÀFXOW WR PDVWHU “new technologies” like GPRS, 3G, WiMAX, FemtoCells and others You are getting enough recognition for your hard work You are sure that you are doing everything the best way possible. You know how to communicate and partner effectively with network engineers, I/T, operational managers, auditors, SOX and regulatory compliance teams Do NOT send your staff to the RAF training event if: You know how to detect and prevent fraud You are satisfied with the performance of your revenue e You understand how to assure network, mediation, postpaid billing, assurance team prepaid, interconnect, roaming, CAMEL, SMS, MMS You believe that your team already knows everything You are not interested in learning about the GRAPA standard that is important about revenue assurance and how it is controls and benchmarks about assurance of these areas practiced You are not interested in having your team learn innovative vative You are sure about how you are setting priorities ways to cut the cost of assuring existing revenue streams ams You have the right KPIs and you are being measured on You think that it is impossible to improve margins and d delivery of the right things maximize realized revenues (profit) through application of on financial analysis, controls and disciplines You don’t want to build a network of like-minded professionals to learn from and share experiences with You have given up on ever getting an understanding of, or control over your marketing risks and costs You are not interested in learning new ways to save your You do not want your team confused with information about company money and reducing the overall risk to revenues more sophisticated and effective ways to get their work done rk You do not want your employees learning how to take the initiative in finding and resolving risk to revenues You are sure that your team is already doing everything possible to maximize your revenue position You do not want your revenue assurance staff to see how other RA teams deliver value and focus their efforts You do not want your team to be tested against the international standard of knowledge and expertise You do not want your team members to feel more confident and competent You do not want certification for your team members 3
- 4. 5HYHQXH $VVXUDQFH )RXQGDWLRQV ‡ 'D 3UDFWLWLRQHU HUWLÀFDWLRQ GRAPA's Revenue Assurance Foundations Course 8QGHUVWDQG 5$ ZLWK DQ HQWLUHO QHZ SHUVSHFWLYH DQG EHFRPH D HUWLÀHG 3UDFWLRQHU RI 5$ Overview: The Revenue Assurance Foundations course is a five-day workshop and certification event designed to provide the student with a comprehensive introduction to the professional practice of revenue assurance as defined by the GRAPA standards, governance model, methodologies, and framework. Students will learn about the GRAPA controls framework and how to ap- ply them to a number of critical operational and technical domains. We will train students in a systematic and comprehensive method for the analysis, diagnosis, and containment of risks to revenues through a standardized approach. Students will be familiarized with the complete set of revenue assurance disciplines including revenue chain assurance (leak- age detection, reporting, and correction), proactive and preventative revenue assurance, margin assurance (the protection of corporate profits across major lines of business, assets, and market activities), and market assurance (the protection of revenues and profits exposed to the marketing and new product development process). Certification: Candidates who have at least 6 months of verified work experience in a telecoms-related area and who pass all exams and attend all 40 hours of class will be rewarded as a Certified Practitioner of Telecommunications Revenue Assurance. Who Should Attend: $QRQH LQWHUHVWHG LQ OHDUQLQJ WKH *5$3$ VWDQGDUGVEDVHG VFLHQWL¿F DSSURDFK WR WKH SUDFWLFH RI revenue assurance including: ‡ 1HZHU 5$ HPSORHHV ORRNLQJ IRU D FRPSUHKHQVLYH LQWURGFXWLRQ WR UHYHQXH DVVXUDQFH DQG ZKR ZLVK WR EHFRPH FHUWL¿HG DV SDUW RI WKHLU WUDLQLQJ ‡ ([SHULHQFHG 5$ SURIHVVLRQDOV ORRNLQJ IRU D FOHDU YRFDEXODU DQG VWUXFWXUH D UHLQIRUFHPHQW RI WKH LPSRUWDQFH RI their role, and an opportunity to expand their scope. ‡ 5$ PDQDJHUV ZKR ZLVK WR VWUHQJWKHQ DQG DGG YDOXH WR WKHLU WHDPV DQG ZKR DUH LQ QHHG RI D VVWHPDWLF HIIHFWLYH approach. ‡ ,QWHUQDO DXGLWRUV ORRNLQJ IRU D VWDQGDUG FRPSOLDQFHEDVHG DSSURDFK WR SHUIRUPLQJ WKHLU MRE IXQFWLRQV ‡ RQVXOWDQWV ZKR ZDQW WR EHWWHU XQGHUVWDQG UHYHQXH DVVXUDQFH LQ RUGHU WR ZLQ PRUH GHDOV DQG GHYHORS SDUWQHUVKLSV ‡ 2SHUDWLRQDO PDQDJHUV ¿QDQFH DQG DFFRXQWLQJ SHUVRQQHO ORRNLQJ IRU EHWWHU FRPSOLDQFH DQG FRQWURO RYHU WKH ¿QDQFLDO condition of their organization. ‡ ,7 HPSORHHV ZKR QHHG D EHWWHU XQGHUVWDQGLQJ RI UHYHQXH DVVXUDQFH WR EHWWHU VXSSRUW WKH WHOFR DV D ZKROH ‡ 3URGXFW GHYHORSHUV PDUNHWHUV DQG VDOHV WHDPV ZLWKLQ WHOHFRPV ZKR ZDQW WR JDLQ WKH XSSHU KDQG WKURXJK WKHLU FH inclusive understanding of revenue assurance. DQ GO DWD Our Promise: 6WXGHQWV ZKR WDNH WKH WUDLQLQJ VHULRXVO SDUWLFLSDWH HQWKXVLDVWLFDOO LQ DFWLYLWLHV DQG SDVV WKH FHUWL¿FDWLRQ HN exams will be able to perform all practical applications listed under each course description. :H Session Day 1-RAF101 Day 2-RAF102 Day 3-RAF103 Day 4-RAF104 Day5-RAF105 Revenue Governance 1HWZRUN )RXQGDWLRQV Billing Foundations Partner Foundations 3UR¿W )RXQGDWLRQV 2SHQLQJ 6HVVLRQ ,QWUR WR 5HYHQXH ,QWUR WR 1HWZRUN ,QWUR WR %LOOLQJ VVWHPV ,QWUR WR SDUWQHU ,QWUR WR 5HYHQXH Governance assurance engineering Morning Session The Real Telco The Domain Analysis Postpaid Billiing ,QWHUFRQQHFW SURWRFROV Margin assurance 2SHUDWLRQV 0RGHO Methodology (DAM©) Systems (mediation, boundaries, DAM©) (principles and 720
- 5. interconnect, roaming) applications) Coffee Late Morning Session GRAPA Standards Circuit Principles Prepaid Billing Systems 6,0%2; ESDVV DQG Margin assurance case (Wireline, GSM, CDMA) related risks studies Lunch $IWHUQRRQ 2SHQLQJ Revenue Governance 'DWD 3ULQFLSOHV ,63 Diameter, radius, and Roaming, (protocols, Market assurance Framework :,0$; *356 '6/
- 6. packet billing systems boundaries, DAM©) (principles and applications) Afternoon Session RA Lifecycle Broadcast Principles Credit, provisioning, Content (protocols, Applying market (Satellite, Cable) and channels boundaries, DAM©) assurance Coffee Late Afternoon Session Revenue mapping Femtocells, Microwave, Convergent billing Regulator's Dilemma 1HZ SURGXFW Leased-lines systems and fraud protection development Closing Session GRAPA controls and $VVXUH DQ 1HWZRUN M-banking and location- 912 DQG RXWVRXUFLQJ Revenue governance the DAM© based billing risks revisited 4
- 7. 5$) ‡ Revenue Governance Revenue Assurance Comes of Age Learn GRAPA's new revenue governance standards for simplifying and standardizing RA :K 'RHV 5HYHQXH $VVXUDQFH ([LVW Learn how the value and influence of RA is changing telcos all over the world! Overview This course is an introduction for the new Revenue Assurance Governance methodology and framework that is revolution- izing the way telcos do business. 2QH RI WKH PRVW SUHVVLQJ TXHVWLRQV IRU DQ 5$ SURIHVVLRQDO LV :K DP , KHUH RU :KDW LV P UROH :H ZLOO FOHDU WKH FRQIX- sion and give your job relevancy and structure. Discover how GRAPA is helping turn Revenue Assurance into one of the most effective revenue-maximizing functions within the modern telco by providing revenue assurance managers with perspectives DQG WHFKQLTXHV WKDW JHW WKHP IRFXVHG RQ UHDO KDUG UHYHQXH²DOORZLQJ WKHP WR RIIHU VLJQL¿FDQW DQG LPPHGLDWH YDOXH WR WKHLU organization. Telecommunications companies today are focused on the development and deployment of radical new technologies and EXVLQHVV PRGHOV²WHFKQRORJLHV WKDW DUH UHVKDSLQJ KRZ WKH ZRUOG FRPPXQLFDWHV VKDUHV DQG ZRUNV²EXW WRR PDQ UHYHQXH DVVXUDQFH PDQDJHUV VSHQG WKHLU WLPH ORRNLQJ EDFNZDUGV WULQJ WR ¿JXUH RXW KRZ WR GRXEOH DQG WULSOHFRXQW UHYHQXH streams that are shrinking daily. The controls and approaches introduced in this course comprise the foundation of GRAPA's systematic approach to revenue assurance. Practical Applications: 2XU FRPPLWPHQW LV WKDW FDQGLGDWHV ZKR WDNH WKH WUDLQLQJ VHULRXVO SDUWLFLSDWH HQWKXVLDVWLFDOO LQ DFWLYLWLHV DQG SDVV WKH FHUWL¿FDWLRQ H[DPV ZLOO ‡ Learn GRAPA's systematic, comprehensive, rationalized, and practical solutions-based approach to the protection of telco revenue streams ‡ Learn the building blocks that can make it simple to protect telco revenues ‡ Understand why revenue assurance is crucial to the success of a telco ‡ Appreciate the difference between the GRAPA standards and the standards of other organizations like 70) ,,$ DQG 303 ‡ Discover the world's most tested, implemented, practical, wow-I'm-actually-getting-work-done approach to revenue assurance ‡ Learn to win the battle for budget, mindshare, and credibility ‡ Utilize case studies and examples of the core methods and standards of the revenue assurance function and map them to their environment in order to assure they understand the practical applications GRAPA Certification Credit Key Concepts include: RPSOHWLRQ RI WKLV FRXUVH RI VWXG YHUL¿HG E WHVWLQJ ZLOO HDUQ DWWHQGHHV Competency Credit for the following areas in line with GRAPA’s “Body of The GRAPA Standards Approach Knowledge” The Revenue Assurance Lifecycle 12 types of controls and how to apply them ; 7KH 5HDO720 7HOFR 2SHUDWLRQV 0RGHO
- 8. DQG 5$¶V UROH Revenue Mapping ; The Science of Revenue Assurance 5HYHQXH 2SWLPL]DWLRQ ; The Revenue Assurance Lifecycle 1RLVH $QDOVLV ; 3ULQFLSOHV RI 5HYHQXH $VVXUDQFH 2SHUDWLRQ Revenue Maximization 3ULQFLSOHV RI .3, 'HVLJQ DQG 'HSORPHQW ; Principles of Scope Management GRAPA Standard Controls and Applications ; Principles of Revenue Realization (Margin, Market, New Products) GRAPA Benchmarks ; 3ULQFLSOHV RI 5HYHQXH 2SWLPL]DWLRQ (Leakage and Risk Containment) Revenue Assurance Body of Knowledge ; 5HYHQXH 5LVN 3ULRULWL]DWLRQ DQG $VVHVVPHQW 7HFKQLTXHV Revenue Assurance Standards ; Principles and Methods for Forensics Management *5$3$ HUWL¿FDWLRQ 3URJUDP ; Principles and Methods of Controls Management The RA Governance Framework ; Principles and Methods of Corrections Management GRAPA Core Methodologies ; 5$ .3,V DQG RPSOLDQFH 0DQDJHPHQW ; Revenue Assurance Governance Framework 5
- 9. 5$) ‡ Network Foundations Network is Easy–We'll Show You How A simple guide to assuring any network, anytime, any place. *60 :LUHOLQH '0$ '6/ DEOH :,0$; ,63 LUFXLW 6DWHOOLWH /7( 1*1 *356 DQG %URDGFDVW $FFHVV 6HUYLFH 'HOLYHU 3URYLVLRQLQJ DQG 7ULSOH $ Overview Stop the confusion and start assuring network! This course focuses on the underlying infrastructure that makes any telecommunications service delivery environment function. We will introduce you to the concepts of access architecture (the way customers gain access to the network) and service delivery architecture (the way services DUH DFWXDOO GHOLYHUHG
- 10. :H ZLOO WKHQ LQWURGXFH WKH FRQFHSW RI 7ULSOH $ –Authentication, Authorization, and Ac- counting–which forms the basis for all revenue management integrity. Based upon these core principles, we will provide a review of curcuit-based architecture and the history of YRLFH VVWHPV :H ZLOO DOVR FRYHU SDFNHW GDWD DQG ,3 GHOLYHU LQFOXGLQJ WKH ,QWHUQHW DQG WKH UROH RI WKH ,63 Practical Applications: 2XU FRPPLWPHQW LV WKDW FDQGLGDWHV ZKR WDNH WKH WUDLQLQJ VHULRXVO SDUWLFLSDWH HQWKXVLDVWLFDOO LQ DFWLYLWLHV DQG SDVV WKH FHUWL¿FDWLRQ H[DPV ZLOO ‡ Learn the GRAPA standard approach to simplify and assure any network environment. ‡ Discover how to assure the transactional integrity of any network without becoming a net- work engineer ‡ Master the use of the GRAPA’s simple building blocks and apply them to any environment. ‡ Learn WKH PHDQLQJ RI WKH WHUPV /7( 1*1 *356 DQG DOO WKH RWKHU QH[W JHQHUDWLRQ WHFK- nologies and understand why they're important for RA and how to assure them ‡ See how the GRAPA Domain Analysis Methodology (DAM©) can provide them with the tools necessary to assess the measurability, trackability, and securability of any environment in terms that a business can understand ‡ Cut WKURXJK WKH MDUJRQ DQG JHW WR WKH SRLQW TXLFNO ‡ Learn the GRAPA standard controls for each of these environments and how to get network to implement them ‡ Utilize FDVH VWXGLHV DQG H[DPSOHV RI FLFUXLW ,3 DQG EURDGFDVW DFFHVV DQG GHOLYHU DQG PDS them to their environment in order to assure they understand the practical applications. GRAPA Certification Credit Key Concepts include: RPSOHWLRQ RI WKLV FRXUVH RI VWXG YHULÀHG E WHVWLQJ ZLOO HDUQ DWWHQGHHV RPSHWHQF Principles of circuit technology Credit for the following areas in line with GRAPA’s “Body of Knowledge” How to make and read a CDR ; 266 2SHUDWLRQV DQG 2UJDQL]DWLRQ Key network controls and methods ; ,QWURGXFWLRQ WR 7HOHFRPPXQLFDWLRQV 0HGLD Topology, Security, Control Protocol, Transaction Control, ; Access architecture components and organization CDR Generation Sequence, CDR Generation, CDR Transport ; SS7 - Principles, Components, and Dialects Media characteristics and controls (wireless and wireline) ; 6,3 3ULQFLSOHV RPSRQHQWV DQG 'LDOHFWV History of Circuit, Packet, and Broadcast Technology ; WAP - Principles, Components, and Dialects How to assure and bill circuit and packet transactions ; Packet Service Delivery Alternative billing models for packet and their consequences ; Product Architectures (VOIP, SMS, MMS, WAP, DSL, WiFi) Command and control protocols ; Anatomy of a CDR (How made, how delivered, how assured) Understanding: ; 1HWZRUN $VVXUDQFH (GRAPA standard controls and methods) SS7, SIP, IP, Radius, Diamater, WAP, DOCSIS, IMS ; GPRS Billing Business Models and Architecture and how to use them for assurance ; * DQG 1*1 %LOOLQJ %XVLQHVV 0RGHOV DQG $UFKLWHFWXUH The Domain Analysis Methodology (DAM©) ; Fundamentals of Wireless Media Access architecture principles for GSM, CDMA, WIMAX, ; Fundamentals of Wireline Media :L¿ FRSSHU FDEOH ¿EHU ; Service delivery architecture components and organization Service delivery architectures: voice-circuit, voice-packet ; 92,3 3ULQFLSOHV DQG DSSOLFDWLRQV (VOIP), data-circuit, data-packet, cable-broadcast, ; Product Architectures (Cable, Wimax, Leased line, Burstable, Fiber, Microwave) DOCSIS 3.0, Internet, interconnect, satellite, microwave ; AAA for Access and Service Delivery 3G, 4G, LTE, NGN, GPRS, UMTS, IMS 6
- 11. 5$) ‡ Billing Foundations Clear the Fog, Count the Money A standards-based approach to assuring any billing system with confidence Traditional Postpaid, Classical Prepaid , Radius, Diameter, Specialized, and Convergent Billing Systems Overview Students will become familiarized with a complete spectrum of billing models and scenarios including postpaid, pre- paid, radius, diameter, and convergent billing. You will learn the methods of revenue capture, revenue processing and billing, collections, and revenue recognition for each major billing architecture. We will present you with the standard controls for each system as well as the industry-standard methods employed to assure them. We will pay special attention to the development rationalized cost effective risk containment strategies in addition to forensics, corrections and controls issues for each. You will also learn how to troubleshoot problems and how to initiate proper investigations, corrections, and controls. Practical Applications: 2XU FRPPLWPHQW LV WKDW FDQGLGDWHV ZKR WDNH WKH WUDLQLQJ VHULRXVO SDUWLFLSDWH HQWKXVLDV- WLFDOO LQ DFWLYLWLHV DQG SDVV WKH FHUWL¿FDWLRQ H[DPV ZLOO ‡ Learn how each of the major categories of standard billing systems work ‡ Appreciate the industry-standard methods utilized to secure, assure, and manage these environ- PHQWV HI¿FLFHQWO ‡ Understand WKH FRUH WUDGHRIIV WKDW ELOOLQJ PDQDJHUV PXVW IDFH EHWZHHQ RSHUDWLRQDO HI¿FLHQF DQG billing accuracy ‡ Learn the 25 GRAPA standard controls that will allow them to assure and secure any billing system, any time, any place ‡ Apply the Domain Analysis Methodology (DAM©) to decipher the complex relationships between provisioning, channels, credit, and biling in order to create a secure revenue environment ‡ Utilize case studies and examples of postpaid, prepaid, and convergent billing, and map them to their environment in order to assure they understand the practical applications. GRAPA Certification Credit Key Concepts include: RPSOHWLRQ RI WKLV FRXUVH RI VWXG YHULÀHG E WHVWLQJ ZLOO HDUQ DWWHQGHHV Competency Credit for the following areas in line with GRAPA’s “Body of Knowledge” Mediation and Postpaid Billing ,QWHUFRQQHFW RIIQHW DQG LQWHUQDWLRQDO
- 12. ; 3ULQFLSOHV RI 0HGLDWLRQ 2SHUDWLRQV (Functions, Forensics, Controls) Postpaid Roaming ; Principles of Postpaid Billing (Functions, Forensics, Controls) Collections Credit and Dunning ; Principles of Prepaid Billing (Functions, Forensics, Controls) ; Principles of Collections, Credit and Dunning Management Postpaid Roaming. ; 3ULQFLSOHV RI ,3 ELOOLQJ (radius, diameter) Domain Analysis Methodology (DAM©) for Mediation, Prepaid, ; Principles of Streaming billing (cable,video, audio) Postpaid, Convergent, M-banking ; Principles of Convergent billing systems Domain Access Methodology (DAM©) for Channel, Credit, ; Principles of M-banking operations Collection, Dunning, Provision activation ; Principles of credit risk collection and Domain Analysis 2SWLPDO .3,V RGMHFWLYHV DQG WUDGHRIIV IRU DOO ELOOLQJ VVWHPV ; Principles of provisioning and activation assurance Key prepaid forensics approaches and toolsets ; Principles of channel, agent, and commission assurance Standard Prepaid controls ; /LQH RI %XVLQHVV /2%
- 13. 3ULQFLSOHV 3UHSDLG 7
- 14. 5$) ‡ Partner Foundations Partner Protection Principles A systematic framework for maximizing margins and minimizing exposures in partnerships ,QWHUFRQQHFW 5RDPLQJ RQWHQW 912 DQG 2XWVRXUFLQJ Overview This day is dedicated to the understanding and assurance of partner-based business models [interconnect $%6
- 15. URDPLQJ FRQWHQW 912 DQG RXWVRXUFLQJ@ DQG WKH VSHFLDO DVVXUDQFH LVVXHV DQG UHYHQXH ULVNV DVVRFL- ated with them. Students will review and learn about the standard approach to these models. Coursework will include an LQGHSWK UHYLHZ RI WKH HQWLUH UHYHQXH PDQDJHPHQW GRPDLQ IRU 9RLFH ,QWHUFRQQHFW ,QWHUQDWLRQDO DQG 'RPHV- WLF
- 16. ,QWHUQHW ,QWHUFRQQHFW ,QWHUQDWLRQDO DQG 'RPHVWLF
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- 19. RQWHQW GHOLYHU DQG %URDGFDVW 6WUHDPLQJ 'HOLYHU $OVR LQFOXGHG LV D FRPSUHKHQVLYH FRQVLGHUDWLRQ RI DVVXUDQFH IRU 9LUWXDO 1HWZRUN 2SHUDWLRQ 3DUWQHUV 2XWVRXUFHUV and other disconnected revenue stream models. Practical Applications: 2XU FRPPLWPHQW LV WKDW FDQGLGDWHV ZKR WDNH WKH WUDLQLQJ VHULRXVO SDUWLFLSDWH HQWKXVLDVWLFDOO LQ DFWLYLWLHV DQG SDVV WKH FHUWL¿FDWLRQ H[DPV ZLOO ‡ Learn the GRAPA standards-based Practical Handbook of Protocols for each partnership- based line of business. ‡ Learn KRZ WR DVVXUH DQG VHFXUH SDUWQHUVKLSV TXLFNO DQG FRVWHIIHFWLYHO ZLWK WKH *5$3$ standards-based approach ‡ Apply Boundary Analysis© and the Domain Analysis Methodology (DAM©) to identify the criti- cal exchange points, protocol points, and standard adjustment points for each of your partner- ships. ‡ Learn how professionals use the hierarchy of protocol points to decompose and simplify com- plex partner relationships. ‡ Utilize FDVH VWXGLHV DQG H[DPSOHV RI LQWHUFRQQHFW URDPLQJ 912 DQG FRQWHQW UHODWLRQVKLSV DQG map them to their environment in order to assure they understand the practical applications. GRAPA Certification Credit Key Concepts include: RPSOHWLRQ RI WKLV FRXUVH RI VWXG YHULÀHG E WHVWLQJ ZLOO HDUQ DWWHQGHHV Competency Credit for the following areas in line with GRAPA’s “Body of Principles of revenue assurance for prepaid roaming, Knowledge” including USSD and CAMEL ; 'RPDLQ $QDOVLV 0HWKRGRORJ‹ ,QWHUFRQQHFW ,Q%RXQG 2XWERXQG 7UDQVLW ,5(* DQG 7$',* ,QWHUQDWLRQDO 'RPHVWLF $%6 3URWRFRO VHWV ,QWHUFRQQHFW 5RDPLQJ RQWHQW 912 2XWVRXUFLQJ
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- 24. 5$) ‡ 3UR¿W )RXQGDWLRQV C-level Revenue Assurance Using RA to accelerate profit and mitigate market risk Margin Assurance and Market Assurance Overview The last day of RAF is designed to provide the student with a comprehensive understanding of WHOFR SUR¿WDELOLW DQG PDUNHW SRVLWLRQLQJ DQG WKH FULWLFDO UROH WKDW LQQRYDWLYH UHYHQXH DVVXUDQFFH departments are playing in the protection and enhancement of those revenue streams. Students ZLOO OHDUQ KRZ WR VHW XS RUJDQL]H VHOO DQG LPSOHPHQW WKH WZR PDMRU WHOFR SUR¿W JXDUGLDQ GLVFLSOLQHV margin assurance and market assurance. Students will also learn about new product development and the methods utilized to increase the chances of success and how to streamline and expedite the new product development process. Practical Applications: Our commitment is that candidates who take the training seri- ously, participate enthusiastically in activities, and pass the certification exams will: Testimonial ‡ Learn how successful telecoms executives make strategic decisions to positively impact the top line success of the telco, based on hard facts, data and GRAPA’s Prior to joining the RA Academy training, my VFLHQWL¿F VVWHPDWLF DSSURDFK RA approach was not structured. I was doing everything not in a standardize manner. Now, ‡ Gain D FOHDU ¿QDQFLDO SHUVSHFWLYH RQ WHOFR PDUJLQV SUR¿WDELOLW DQG KRZ RSHUDWLRQV l have a better risk mapping on how to handle FDQ EH IRFXVHG RQ UHYHQXH KDUYHVWLQJ ZLWKRXW EHFRPLQJ D ¿QDQFH H[SHUW RA in my company. I shall adapt the GRAPA standards with a systematic and holistic ‡ Participate LQ DQG LPSOHPHQW ¿QDQFLDO FRQWUROV RYHU QHZ SURGXFW GHYHORSPHQW approach to minimize risk to an optimal level. promotions and deals in order to make them go faster and be more effective I now know that I have more responsibility to deliver to the company and I shall add value ‡ Apply GRAPA’s standards and Domain Analysis Methodology to get control over based on my knowledge. I thank GRAPA for it. churn, market, and brand risks Senior Manager Fraud and Revenue Assurance, Malaysia ‡ Utilize case studies and examples of new product launches, promotions, and bundles and map these cases to their environment in order to assure they understand the practical applications. GRAPA Certification Credit Key Concepts include: RPSOHWLRQ RI WKLV FRXUVH RI VWXG YHULÀHG E WHVWLQJ ZLOO HDUQ DWWHQGHHV Competency Credit for the following areas in line with GRAPA’s “Body of 0DUJLQ $QDOVLV 7HFKQLTXHV Knowledge” Red vs Black Margins ; Margin controls structure, framework, and domains Actual vs Shadow Costs ; Asset margin assurance Standard Margin Forensics ; Rate margin assurance High Risk Margin Domains Market Assurance ; Bundle margin assurance Revenue Assurance for Churn ; Principles of subsidy and invisible margin program controls Churn and Market Assurance Forensics and Controls ; Principles of market assurance XPXODWLYH (IIHFW RQWUROV ; Principles of margin assurance Targeting Controls ; %UDQG HTXLW DVVXUDQFH DQG FRQWUROV Asset Margin Assurance ; The new product development process /2% 0DUJLQ $VVXUDQFH ; 1HZ SURGXFW IDPLO PDQDJHPHQW Promotion Margin Assurance ; 3LSHOLQHJDWHZD PHWKRGRORJLHV Bundle Margin Assurance ; 3ULQFLSOHV RI :$5‹ :DOOHW 6KDUH $FTXLVLWLRQ 5HWHQWLRQ
- 25. )UDPHZRUN 1HZ 3URGXFW 0DUJLQ $VVXUDQFH ; Principles of UCF© (Universal Control Framework) for Marketing 1HZ 3URGXFW GHYHORSPHQW PHWKRGV 0DUJLQ 5LVN 'RPDLQV ,QWHUFRQQHFW %XQGOH RQWHQW 5DWH 3ODQ
- 26. ; 3ULQFLSOHV RI $VVHVVPHQW IRU XPXODWLYH (IIHFW DQG 0XOWL,QIOXHQFH (IIHFW Forensics and Risk Assessment for Margin Assurance ; Forensics, Models and Risk Assessment for Churn Controls and Remedies for Margin Risk ; Forensics, Models and Risk Assessment for Market Assurance 9
- 27. The Revenue Assurance Academy Experience MORE THAN JUST TRAINING The Revenue Assurance Academy EXPERIENCE! In the Classroom Out of the Classroom SOCIALIZING CHALLENGING CONTENT DISCUSSION PA R T I C I PAT I O N CONFIDENCE BUILDING NETWORKING 10
- 28. Why We are the Leaders in Training Telco Professionals Around the Globe Maximizing Revenue Potential and Minimizing Risk to those Revenues with Proven Techniques and Strategies The Instructors Join the leading Revenue Assurance focused training events. Featuring exclusive presentations, real-world examples of procedures, solutions, and strategies that have HIIHFWLYHO UHGXFHG OHDNDJH DQG PD[LPL]HG SURÀWV IRU WHOFRV DURXQG WKH ZRUOG After providing training to hundreds of revenue assurance professionals around the globe, we are pleased to announce our improved course offering. 0DVWHUV HUWLÀFDWLRQ ± *5$3$¶V KLJKHVW DQG PRVW SUHVWLJLRXV FHUWL¿FDWLRQ WKDW LV DWWDLQHG after completing a rigorous and exhaustive training program whose extensive curriculum spans the broad and complex landscape of revenue assurance Depth of knowledge – The topics and examples are “narrow and deep” rather than broad and vague, presenting you with focused, highly targeted information that adds real value. Z D , world renowned Tailored content – Training is adjusted to align the needs of the students to the available PDWHULDO 6WXGHQWV DUH DVNHG WR ¿OO RXW ³*5$3$ %HQFKPDUN 6XUYHV´ WR GHWHUPLQH WKH OHYHO DQG QDWXUH RI WKH WUDLQLQJ UHTXLUHG 7KH VXUYH UHVXOWV KHOS XV GHWHUPLQH KRZ ZHOO RX NQRZ your own systems, and provide clues about what you need help with. The principles and Z SUDFWLFHV WDXJKW DUH DOVR DSSOLHG WR FDEOH VDWHOOLWH ZLUHOHVV YRLFH 606 006 ,379 DQG , 00'6 ZLWK HTXDO FRQYLFWLRQ GHWDLO DQG HIIHFWLYHQHVV 'Z W d Z Relevancy – Class material is based on the foundations of GRAPA. GRAPA members from ^ , every geography, type of carrier, major type of technology, and carriers of all sizes review and d d Z approve these standard approaches. The material serves as the foundation for an industry , standard approach that is applicable to everyone, and yet easily focused to the needs of Z D VSHFL¿F VXEDXGLHQFHV Based on real-world situations – The majority of the training is experience-based “standard practices” in revenue assurance, harvested from the many revenue assurance professionals who participate in “practices surveys,” “strategy sessions,” and other information-sharing HYHQWV OHDU VSHFL¿F GHOLYHUDEOHV DUH SURYLGHG WKDW DSSO WR UHDOZRUOG VLWXDWLRQV 7KH material is never based on speculation, guesses, or unvalidated information. Interactive – The workshops are more than lecture sessions. RAA classes are participative and interactive and students are expected to proactively join in discussions, problem solve, DQG ¿OO RXW EHQFKPDUNV $WWHQGHHV KDYH RSSRUWXQLW IRU PXFK LQWHUDFWLRQ ZLWK WKH LQVWUXFWRU and other students. Lunch and breaks are devised to facilitate more intimate conversation. Professional development – Students master vocabulary needed for creating a sense of professional identity and opportunities with other like-minded people in the industry that share common goals and issues. , GRAPA's Newest Instructor Z W E 'Z W Z , Z W D d ^ ^ Z ^ 11
- 29. Contact Us Tel +1- 847-930- 3610 Fax +1- 707-276-7676 www.grapatel.com Email info@grapatel.com www.ra-academy.org 2011 Schedule: 21 Feb - 4 Mar London, UK 03-14 Apr Sharm el Sheikh, Egypt For the most up-to-date list of upcoming events 16-27 May Cape Town, South Africa 13-17 Jun Chicago, USA please visit our website: 04-08 Jul Islamabad, Pakistan www.ra-academy.org/revenue_assurance_train- 08-12 Aug Sydney, Australia 22-26 Aug Shanghai, China ing/upcoming_events.html 12-23 Sep Punta Cana, Dominican Republic 10-21 Oct Barcelona, Spain 2FW 1RY 'XEDL 8$( 07-11 Nov Nairobi, Kenya 05-16 Dec Orlando, USA We schedule courses and venues based on demand, so please be sure to tell us if you are interested in a particular class and location. We only move forward with our planning if there is enough interest. To make these trainings happen we need commitment from a minimum number of delegates. 3OHDVH UHIHU WR RXU ZHEVLWH IRU VSHFL¿F SROLFLHV Telco executives rave about the courses…. The Revenue Assurance core curriculum course has been one of the best courses I have ever attended. The ability of the WUDLQHU WR SUHVHQW KLJKO WHFKQLFDO DQG FRPSOH[ VXEMHFWV WR SUDFWLFDO DQG HDV WR XVH FRQFHSWV ZDV MXVW DPD]LQJ , ZLOO GH¿QLWHO apply what I have learned in the course in my work. Revenue Assurance Manager, The Netherlands Rob really knows his stuff and is very passionate about it. If you really want to get a wider perspective of what revenue assur- ance is really about, then he's the man to go to! The course is intense and extensive but nonetheless highly enjoyable. I would highly recommend the course equally to those with both a technical or non technical interest in the subject. Manager, Dubai About us: The Revenue Assurance Academy (RAA) is the exclusive training organization of GRAPA. GRAPA has over 5000 registered members and has distributed more than 3500 copies of its 2009 standards book. The Revenue Assurance Foundations (RAF) core curriculum is the Academy's latest curriculum offering, providing revolutionary, relevant material. By offering events that combine benchmark development, sharing of standard SUDFWLFHV DQG DSSURDFKHV DV ZHOO DV GHOLYHU RI ZRUNVKRSV WKH 5HYHQXH $VVXUDQFH $FDGHP SURYLGHV D XQLTXH DQG SRZHUIXO YHQXH IRU GHSORPHQW of standard practices and rapid integration of those practices into the participating telco environments. :H KDYH FRQGXFWHG RXU WUDLQLQJ SURJUDPV IRU GR]HQV RI FDUULHUV DQG VHUYLFHV SURYLGHUV DURXQG WKH ZRUOG 2XU ZRUNVKRSV DUH RIIHUHG LQ SXEOLF venues (attended by delegates from many operators and services providers, which promotes the sharing of practices) as well as onsite for a private, more personalized and focused training for a company’s staff. Some of what makes our training so unique: 1. Based entirely on the GRAPA standards of professional revenue assurance practices 2. Taught by Rob Mattison, the world’s leading authority on the practice of revenue assurance in telecommunications, winner of many awards for his work in this area, author of The Revenue Assurance Standards--2009, The Revenue Assurance Handbook, and dozens of whitepapers. 3. Focused heavily on practical experience, not theory Visit our website to read some great reviews from students who have attended our training: ZZZUDDFDGHPRUJ5$$BLQIRWHVWLPRQLDOVKWPO 12
- 30. Revenue Assurance Foundations RAF101 – RAF105
- 32. TABLE OF CONTENTS RAF101: Revenue Governance Introduction ..................................................................................................................................... 1 The Real TOM................................................................................................................................... 6 Noise and Revenue Mapping ......................................................................................................... 11 Integrated Revenue Management ................................................................................................. 18 GRAPA Standards ........................................................................................................................... 23 RA Lifecycle .................................................................................................................................... 28 Domain Analysis Methodology ...................................................................................................... 35 Revenue Assurance Governance ................................................................................................... 39 RAF102: Network Foundations Network Operations ...................................................................................................................... 45 Media ............................................................................................................................................. 50 AA-SDA-AAA ................................................................................................................................... 52 History of Circuit ............................................................................................................................ 56 Topology ........................................................................................................................................ 59 SS7 .................................................................................................................................................. 62 How to make a CDR ....................................................................................................................... 66 Broadcast ....................................................................................................................................... 68 Packet............................................................................................................................................. 71 VOIP - Skype - SIP ........................................................................................................................... 74 Fiber, DSL, Triple Play..................................................................................................................... 77 WiFi and WiMAX ............................................................................................................................ 80 GPRS and EVDO.............................................................................................................................. 86 SMS / MMS .................................................................................................................................... 94 3G ................................................................................................................................................... 99 Femtocells .................................................................................................................................... 109 i
- 33. RAF103: Billing Foundations Billing Models............................................................................................................................... 113 Standard Controls ........................................................................................................................ 115 Mediation ..................................................................................................................................... 117 Postpaid Billing ............................................................................................................................. 123 Credit, Collection and Provisioning .............................................................................................. 128 Channel and Sales Assurance....................................................................................................... 133 Prepaid Traffic Assurance ............................................................................................................ 141 Prepaid Account ........................................................................................................................... 146 Prepaid Rating .............................................................................................................................. 149 Radius ........................................................................................................................................... 153 Convergent Billing Systems .......................................................................................................... 158 Convergent Billing Systems Part II ............................................................................................... 163 Mobile Banking ............................................................................................................................ 168 Mobile Banking Part II .................................................................................................................. 173 Location Based Billing .................................................................................................................. 181 RAF104: Partner Foundations Interconnect Intro ........................................................................................................................ 187 Business Model Protocols ............................................................................................................ 191 Wholesale Analysis Case Study .................................................................................................... 197 Interconnect Technical Protocols ................................................................................................ 203 Sample Interconnect Numbers .................................................................................................... 208 Interconnect Operational Protocols ............................................................................................ 210 Interconnect Contract Example ................................................................................................... 217 Texas Arbitration.......................................................................................................................... 234 The Regulators Dilemma .............................................................................................................. 241 Denial of Revenue ........................................................................................................................ 245 SIMBOX ........................................................................................................................................ 249 Internet Peering ........................................................................................................................... 255 Roaming Business Models ........................................................................................................... 259 Roaming, Signaling and MM ........................................................................................................ 265 Roaming: Postpaid Billing ............................................................................................................ 270 Roaming: Prepaid USSD Billing .................................................................................................... 276 Roaming: Prepaid Billing .............................................................................................................. 280 Data Roaming ............................................................................................................................... 286 Content ........................................................................................................................................ 292 Virtual Network Operations (VNO) .............................................................................................. 298 ii
- 34. RAF105: Profit Foundations Intro to Margin Market Assurance ........................................................................................... 300 Network Asset Assurance ............................................................................................................ 304 Interconnect Margin Analysis ...................................................................................................... 308 Applied Margin Assurance .......................................................................................................... 315 Controls, Compliance Quantification ....................................................................................... 318 Intro to Market Assurance ........................................................................................................... 326 Marketing Forensics Challenges .................................................................................................. 328 Driving Brand Value ..................................................................................................................... 330 Market Research .......................................................................................................................... 334 Marketing Process ....................................................................................................................... 338 Segmentation ............................................................................................................................... 341 The WAR Framework ................................................................................................................... 346 Rate and Bundling Assurance ...................................................................................................... 349 Telco Churn Management ........................................................................................................... 354 Intro to Product Development ..................................................................................................... 359 RA Product Development ............................................................................................................ 362 iii
- 36. Revenue Assurance Foundations RAF101: Revenue Governance Introductions Rob Mattison 2 Revenue Assurance : Foundations Background 1 Manager of dozens of revenue assurance and billing projects Helped establish revenue assurance departments for several carriers Benchmarking of Telco Revenue Assurance p g practices for telcos SURVEY COURSE: from around the world (surveys, questionnaires, benchmark studies) PROFESSIONAL REVENUE ASSURANCE Best practices training classes – onsite, offsite, and web Assisting vendors in the development of revenue assurance systems Louis Khor References GRAPA’s Director of Research ATT, Atlanta, GA Chicago, IL Macedonia Telecom, Skopje, Macedonia MTN Nigeria, Lagos, Nigeria Joined GRAPA’s executive team at the start of 2009 Bell Atlantic, Philadelphia, PA Bell Mobility, Toronto, Canada NTT, Tokyo, Japan Optus, Sydney, Australia In partnership with Rob, oversaw the research and Bell South, Santiago, Chile Bellcore, Oakbrook, IL Pacific Bell, San Ramon, CA writing of the TFO curriculum Bharti, Delhi, India PT Telkom, Bandung Jakarta, Indonesia QWEST, Denver, CO British Telecom, London, England Been heavily involved in the re riting of the RA hea il in ol ed rewriting Centel, Des Plaines, IL Reliance Infocom Bombay INDIA Infocom, Bombay, Century Telephone, Monroe, LA Singtel, Singapore curriculum for Xtreme and RA2020 China Telecom , Shanghai, Beijing, Kun Ming Sprint PCS, Kansas City, MO China Mobile, Shanghai, Guangzhou, TELMEX, Mexico City, MEXICO Regular speaker at industry, RA and Fraud events Szechuan, Beijing Telefonica Espana Moviles, Madrid, Spain Previously a Senior Analyst for New Paradigm Deutsche Telekom, Bonn, Germany Far East Tone, Taipei, Taiwan Turkcell, Istanbul, Turkey Resources Group (NPRG), since post-grad France Telecom, Paris, France United Telecom, St.Louis, MO US Cellular, Chicago, IL Globe, Manila, Philippines University instructor and Platoon Commander Hansol PCS, Seoul, Korea Wisconsin Bell, Milwaukee, WI Kyivstar, Kiev, Ukraine 4 Benchmark and Other Participants “The Telco Revenue Handbook” Multi National Wireless Groups Vodafone A practical guide to T-Mobile Vodacom revenue assurance China Mobile practices from Singtel Si t l MTN Group (Africa) telco’s around the Hutchison world. Telefonica Italia Telefonica Moviles de Espana The first, MCI comprehensive “handbook” to RA. http://www.rabook.net 5 6 © 2011 Rob Mattison www.ra-academy.org 1 of 364
- 37. Revenue Assurance Foundations RAF101: Revenue Governance Introductions “The Revenue Assurance Standards” Introductions 8 Who are you? Summary and Objectives for the class? review of revenue Key issues? assurance as of Key q y questions? 2009. Fully ratified Buzzwords, terms? standards. http://www.grapatel.com 7 Day 1 Day 2 Day 1 : Revenue Governance Network Foundations 9 10 Network Fundamentals The Emerging Role of Revenue Assurance The Domain Analysis Methodology © Access Architectures / Service Delivery Architectures The Real – TOM AAA Standards and Principles Based RA Wired Access RA Lifecycle POTS, DSL, Fiber, Cable Wireless Access Revenue Governance Model GSM, CDMA, WIMAX, WiFi Revenue Mapping Circuit Delivery Voice , Circuit Bearer Packet Delivery How to DO RA? IP, ISP, ATM Streaming Delivery How to MEASURE RA ? IPTV, Cable, Broadcast Standard controls and techniques for all environments Day 3 Day 4 Billing Foundations Partner Foundations 11 12 Classic billing architectures and their assurance Practical Handbook of Partnership Protocols Interconnect Postpaid Roaming Prepaid Content Convergent VNO Outsource RADIUS/DIAMETER Interconnect Operations and Business Models Standard Controls Frameworks N t Network T k Topology for I t l f Interconnectt Carrier/Partner Contracts and Relationships Collateral Assurance Settlement, Rating variance Credit Regulators Dilemma Collections RA Leakage and Fraud Exposures Dunning Internal Interconnect Leakage/Fraud Channels External Interconnect Leakage/Fraud Provisioning Bypass and SIMBOX Fraud © 2011 Rob Mattison www.ra-academy.org 2 of 364
- 38. Revenue Assurance Foundations RAF101: Revenue Governance Introductions Day 5 Profit Foundations Definition 13 14 Understanding Margin Assurance Revenue Assurance Principles and organization Interconnect Margin Assurance (case study / -The art of finding what you didn’t know was missing! workshop) Asset Assurance Promotion and Bundle Assurance Market Assurance Principles and Rationale Market Assurance controls New Product Development Establishing market and margin controls and environments Revenue Assurance – The Problem – a Summary Mistaken Beliefs 15 16 Telco systems have become exponentially more complex Revenue Assurance is about counting CDR’s overnight This explosion of technology deployment on the network and IT levels combined with chaotic adjustments at the organizational level have left telcos with an extremely large, complicated, and f f li t d d far from ti ht set of processes and systems tight t f d t when it comes to revenue tracking and collection Revenue Assurance – Revenue Assurance – Mistaken Beliefs Mistaken Beliefs 17 18 Revenue Assurance is about I/T Systems Revenue Assurance is reactive © 2011 Rob Mattison www.ra-academy.org 3 of 364
- 39. Revenue Assurance Foundations RAF101: Revenue Governance Introductions Revenue Assurance – Revenue Assurance – Mistaken Beliefs Mistaken Beliefs 19 20 Revenue Assurance has no business being involved Revenue Assurance has not changed in decades with marketing, churn or promotions Revenue Assurance – Revenue Assurance – Mistaken Beliefs Mistaken Beliefs 21 22 Revenue Assurance is a boring job Revenue Assurance will never be a C-Level Function Revenue Maximization? The Revenue Assurance Challenge 23 24 Concentrate on the REVENUE STREAM Everyone knows (or suspects) that there is a lot of leakage, revenue at risk and revenue loss occurring, but doing something about it is PROTECT REVENUE FROM ALL FORMS OF RISK difficult Leakage (obviously) Challenges Prevent leakage ROI consequences Plugging leaks costs money Margin / Rate Plan Loss I revenue assurance worth th i Is th the investment and when? t t d h ? Missed Revenue Opportunity Management Quantification Churn and Market Protection Determine how big the problem is Root cause analysis Figure out why the leakage is occurring Organizational impact Changing processes and systems to permanently plug the leaks and scan for new ones © 2011 Rob Mattison www.ra-academy.org 4 of 364
- 40. Revenue Assurance Foundations RAF101: Revenue Governance Introductions Fraud Roaming Roaming Roaming Reconciliation Collections Negotiation Inter-carrier Inter-carrier Settlement Collections Negotiation Network Mediation Billing Collections Dunning Pre-paid Voucher Channel (Collateral Impacts) Reconciliation Management Dunning Collateral Revenue Assurance Areas (New Order Mgmt, Service Order Mgmt, Network Inventory Mgmt) © 2011 Rob Mattison www.ra-academy.org 5 of 364
- 41. Revenue Assurance Foundations RAF101: Revenue Governance The Real TOM The telecoms business model is unique Itrequires a special dedication and organization around innovation Profit/Loss, Margin are all elusive and It’s all about INNOVATION constantly changing in the telecoms model Success depends upon: Change Adaptation Risk Rob Mattison •© Copyright 2009 GRAPA •2 A telecom is a portfolio of revenue streams Regionalization Revenue streams are the: Adaptation Least common denominator Change billing = change product Key to analysis and control Management g Appetite for Risk pp Difficult to track and manage Revenue Streams Revenue Streams are the thing that Revenue Assurance must master Revenue streams are in a constant state of flux Management appetite for risk is the key concept for C Level executives Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •3 •© Copyright 2009 GRAPA •4 Telecommunications is the most technologically Understanding these key concepts provides you with the insight and approach to getting advanced industry in the world today control over revenue No other technology is possible WITHOUT the Failure to grasp and integrate these concepts telecommunications component is th i the root cause of th f il t f the failure of RA t f to realize full potential Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •5 •© Copyright 2009 GRAPA •6 © 2011 Rob Mattison www.ra-academy.org 6 of 364
- 42. Revenue Assurance Foundations RAF101: Revenue Governance The Real TOM The problem is that the technology: Is a description of the way in which a Is extremely complicated company interacts with consumers and other Changes quickly companies in order to deliver a product or Changes often service Changes Drastically h ll Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •7 •© Copyright 2009 GRAPA •8 Wireless is still a telecom business Regionalization – Huge capital outlay requirement ◦ Different technologies appeal and are integrated Months to years required to build out differently by different cultures/countries infrastructure Innovation – Expensive, cumbersome delivery platforms p , yp Requirement for rapid deployment once built out ◦ N Network i f k infrastructure i a potentiality, telecoms is i li l are in the business of turning that potential into Challenges revenue streams Planning Horizons First Market Advantage Technical Gambling Unplanned but anticipated obsolescence CAPEX Time Lag Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •9 •© Copyright 2009 GRAPA •10 Installed at restaurants, coffee shops, Combination of Wireless + Computer + airports and hotels Location Providers wireless internet access to Automotive Industry Leads consumers “passing through” Get a phone call from your car telling you of a problem Wireless traffic chat room On-Star Virtual Adviser – Reads your email to you while you are driving Voice activated phone built into car Bluetooth enable car Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •11 •© Copyright 2009 GRAPA •12 © 2011 Rob Mattison www.ra-academy.org 7 of 364
- 43. Revenue Assurance Foundations RAF101: Revenue Governance The Real TOM Cellular Payment for vending machines Soap Operas Cellular coupons Cellular credit cards Cellular cash (debit cards) ( ) Do banking over cell phone Pay bills using cell phone Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •13 •© Copyright 2009 GRAPA •14 Location Based Billing GSM, Wimax, WiFi, Cable (Docsis), CDMA Location Based Service Domains Really pervasie Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •15 •© Copyright 2009 GRAPA •16 3G introduces a whole new generation of mediation requirements With 3G the standard model is greatly modified difi d Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •17 •© Copyright 2009 GRAPA •18 © 2011 Rob Mattison www.ra-academy.org 8 of 364
- 44. Revenue Assurance Foundations RAF101: Revenue Governance The Real TOM Who do you define as your “Tele-Mall?” What products/services do you include? What is the optimum combination for the subscriber? What is the optimum combination for you? Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •19 •© Copyright 2009 GRAPA •20 Carrier 3 Carrier 2 Network Network Carrier 1 Network Carrier 1 : Carrier 2 : Carrier 3 : Marketing, Marketing, Marketing, Sales Sales Sales Customer Service Customer Service Customer Service •© Copyright 2009 GRAPA •21 Mobile advertising Cellular (Wireless Carriers) Mobile portal - Mobile content AMPS, CDMA, GSM, 3G, GPRS Advertising funded portals (Yahoo/Google) Private Mobile Radio Advertising funded TV services (3G or dedicated Private corporate networks mobile TV) Cellular subcontracted radio networks Advertising funded downloads of games Radio Services and Portals Advertising funded voice / SMS Short Range Wireless Bluetooth Wireless LAN Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •23 •© Copyright 2009 GRAPA •24 © 2011 Rob Mattison www.ra-academy.org 9 of 364
- 45. Revenue Assurance Foundations RAF101: Revenue Governance The Real TOM A vast assortment of products, interfaces and Personal Interaction (One on One by Consent) technologies are required to make the You call me , I call you modern wireless provider function You message me, I message you The wireless infrastructure is key to Permission Based (Opt In/Opt Out) ( p p ) operations ti Register willingness to accept solicitation, information Register intent to provide products, services, information Broadcast Receive / Send Rob Mattison Rob Mattison •© Copyright 2009 GRAPA •25 •© Copyright 2009 GRAPA •26 Marketing Order Entry/Fulfillment Activation Delivery y of Service Quality of Service Delivery (Monitoring) Billing Splitting of Revenue Across Rob Mattison The Revenue Assurance Academy Rob Mattison © Copyright 2009 GRAPA +1-847-426-2069 www.telco-revenue-assurance.com •© Copyright 2009 GRAPA •27 Revenue Revenue Recognition Billing Realization Regionalization Fraud Adaptation Change billing = change product Roaming Roaming Roaming Reconciliation Collections Negotiation (intentional impacts) (internally/externally initiated) Management g Appetite for Risk pp Settlement Inter-carrier I t i Inter-carrier Collections Negotiation Network Mediation Revenue Streams Billing Collections Dunning Prepaid Voucher Channel (collateral impacts) Reconciliation Management Dunning Collateral Revenue Assurance Areas (New Order Mgmt, Service Order Mgmt, Network Inventory Mgmt) Rob Mattison •© Copyright 2009 GRAPA •30 © 2011 Rob Mattison www.ra-academy.org 10 of 364
- 46. Revenue Assurance Foundations RAF101: Revenue Governance Noise and Revenue Mapping • Maximization of revenue recognition • Guarantee of the speed and accuracy of billing operations • Maximization of revenue realization • Maximization of cash flow = time between money earned and money collected (get more money sooner) Establishing Financial Objectives © Copyright 2010 GRAPA Rob Mattison •© Copyright 2008 GRAPA •2 Who manages the gaps in operational coverage? Telco business models are incredibly complex Over several generations, a relatively Settlement Pre-paid Reconciliation Roaming Reconciliation simple architecture becomes cluttered with Network Mediation Billing Interconnect Network Network Credit and Collections multiple versions of reality Operations Operations Operations Department Department Department Management Group Operations Department Operations Department Group A simple revenue stream / coupled to a single business model becomes scattered and schismed A large SHARED POOL Of network Service Orders elements, systems and operations each split Sales and Order Management and Billing Adjustments and confuse the intetrity of revenue streams Network Direct Retail Customer Call Service Billing Operations Sales Sales Service Center Order Management Department Channel Channel (Order Mgmt. Management) Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2009 GRAPA •3 •4 Key Components Each domain has a set of logical controls • Vertical Domains that MUST BE assured What is a vertical Domain • Logical controls are not optional • Revenue streams • There are many ways to do a logical control , but A unique combination of vertical domains all working you must be sure it is being done to process the same revenue The job of revenue assurance in this • Understanding controls Vertical and Horizontal controls regard (revenue stream assurance) is to assure that all controls are in place and functional (controls mapping) Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •5 •6 © 2011 Rob Mattison www.ra-academy.org 11 of 364
- 47. Revenue Assurance Foundations RAF101: Revenue Governance Noise and Revenue Mapping Provides management (c-level and Where do they come from ? operational) with an assurance that • Extensive benchmarking everything that should be done IS being • Extensive consensus / ratification done • GRAPA benchmarks are available Provides RA with an objective criteria for • Continuous Update Process assessment that is independent of hardware, software and culture Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •7 •8 Are not .. • Best practices • Hardware / software dependent • Maturity or readiness dependent A step by step guide Are… • Logical • Standard practices (industry common application) • Reliable • Independent Rob Mattison •© Copyright 2008 GRAPA •9 •© Copyright 2008 GRAPA •10 Vertical Domain Inventory Acquire or develop a set of standard Compile a list of all vertical domains controls for each domain. • This course teaching the standard controls for that are ‘in scope’ for revenue assurance the most common domains ie • Other organizations use SOX or other agency • Switches standards • Mediation • You can do a “logical development” of the • Postpaid Billing controls that you know SHOULD BE IN PLACE easily (once you understand the process) • Provisioning • GRAPA – customized controls development • Sales channels discipline can help Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •11 •12 © 2011 Rob Mattison www.ra-academy.org 12 of 364
- 48. Revenue Assurance Foundations RAF101: Revenue Governance Noise and Revenue Mapping Assess each domain and determine the For each domain, assess and set a presence or lack of controls confidence level for how “assured” the Remember : controls are something that domain actually is should be done by operational managers • This course will teach the methods for the anyway assignment of a confidence level Identify the controls GAP Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •13 •14 Obtain an inventory of the top revenue Get the revenue amounts for each streams revenue stream • (Note: A revenue stream is much more than the Organize by highest revenue stream first revenue reported on the PL or BS. It is all revenue generated by a unique revenue stream). t db i t ) Typical revenue streams: • On Net Voice • In bound international • Out bound SMS • Etc. Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •15 •16 Trace the revenue stream that each revenue will take through the architecture Prioritization based upon the Assign revenue to each domain value of the domain Tally up all revenue for each domain (which domain first?) Compute the ‘revenue contribution’ that each domain makes to the “revenue stream”and to the company overall Rob Mattison •© Copyright 2008 GRAPA •17 •© Copyright 2008 GRAPA •18 © 2011 Rob Mattison www.ra-academy.org 13 of 364
- 49. Revenue Assurance Foundations RAF101: Revenue Governance Noise and Revenue Mapping Local Switching Retail 40M Billing 2M Provide a top view of RA coverage, Wholesale Billing Collections effectiveness National POI’s Mediation 35M 40M Allow for relative approximation of 12.5M 12 5M Calling Card importance and desirability of different 76.75M Billing Dunning actions 3M 1M Int’l Interconnect Settlement POI’s Billing 24.25M 36.75 36.75 Rob Mattison Rob Mattison •© Copyright 2008 GRAPA •20 Fraud Fraud Roaming 30 Million Roaming 225 Roaming Roaming 3.5% Risk Roaming 1% Risk Roaming 5 Invoices 1.2 % Risk Reconciliation CDR/Day Collections Invoices Negotiation Reconciliation Collections Negotiation (intentional Impacts) (intentional Impacts) (internally / externally initiated) (internally / externally initiated) 50 Million Inter-carrier 500,000 Inter-carrier 20% Risk Inter-carrier 3% Risk Inter-carrier 1.2 % Risk Settlement Settlement CDRs/day Collections Customers Negotiation Collections Negotiation 2oo million Network 180 million Mediation Cdr/day Cdr/day Network 5% Risk Mediation 2% Risk 75 Billing Million 1 Million Collections 5,000 Dunning 12% risk 2% risk 10% Risk CDRs/day Invoices Customers Billing Collections Dunning Pre-paid Voucher Channel 5 Pre-paid Voucher Channel (collateral Impacts) Reconciliation 100 Million 25,000 Management Dunning RAP Files (collateral Impacts) .02% Risk .5% Risk .2% Risk CDRs/day TAP Files Reconciliation Management Dunning Collateral Revenue Assurance Areas Collateral Revenue Assurance Areas (New Order Mgmt, Service Order Mgmt, Network Inventory Mgmt) (New Order Mgmt, Service Order Mgmt, Network Inventory Mgmt) Rob Mattison Rob Mattison Define the total network activity in minutes for the time period to be measured Prioritization Quick, Effective Methodology all network activity Realized Revenue Noise in time (seconds, minutes, erlangs) Rob Mattison •© Copyright 2008 GRAPA •© Copyright 2008 GRAPA •23 •24 © 2011 Rob Mattison www.ra-academy.org 14 of 364
- 50. Revenue Assurance Foundations RAF101: Revenue Governance Noise and Revenue Mapping Define total revenue realized for the period • Obtain the number from the network group • Typically measure the activity in ERLANGS for a particular period (for example, a month) Realized Revenue How many ERLANGS of service did we deliver this month? h? • Use network activity reports as a measure • Problem Noise all network activity There is a lot of activity not related to revenue or not realized recoverable as revenue This must be factored out (potential revenue) Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •25 •26 Total all billing from all four billing Define recognizable unrecoverable network activity (for example, as %) systems (postpaid, prepaid, roaming, and interconnect) for the specified period realized revenue ( (for example, a p p particular month) ) Realized revenue from total activity = potential revenue noise unrecoverable network activity Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •27 •28 Compute the size of the noise in minutes A certain amount of network activity is known to be non-recoverable: • Transit CDRs • Internal network management realized revenue • Administration and overhead } How H The network group can generate a percentage leakage much number that provides a good approximation of + unrecoverable noise this value is + too expensive to recover there? To start, gross estimates are good enough More formal and precise measures can be unrecoverable developed over time network activity Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •29 •30 © 2011 Rob Mattison www.ra-academy.org 15 of 364
- 51. Revenue Assurance Foundations RAF101: Revenue Governance Noise and Revenue Mapping • Apply RA effort What is noise? • Noise is all of the network activity that is unaccounted for as either non-recoverable or realized revenue } recovered Noise could be $ leakage + How much noise • leakage, that is, revenue that should be unrecoverable + is recognized but is not because of a problem with too expensive to recover there? the revenue management chain • Unrecoverable activity that was not yet identified unrecoverable as such network activity Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •31 •32 Fraud Realized Revenue Realized Revenue Realized Revenue Roaming Leakage + Unrecoverable Roaming Leakage + Unrecoverable Roaming Leakage + Unrecoverable Reconciliation Collections Negotiation The RA investment ceiling is the + Too Expensive to Recover + Too Expensive to Recover + Too Expensive to Recover Unrecoverable Network Activity Unrecoverable Unrecoverable Activity Unrecoverable Network Unrecoverable Unrecoverable Activity Unrecoverable Network Unrecoverable (intentional impacts) maximum amount of revenue that might (internally/externally initiated) Realized Revenue Realized Revenue Inter-carrier Realized Revenue Inter-carrier Settlement possibly be recovered in addition to the Collections Negotiation Leakage + Unrecoverable Leakage + Unrecoverable Leakage + Unrecoverable + Too Expensive to Recover + Too Expensive to Recover + Too Expensive to Recover Realized Revenue Realized Revenue Unrecoverable Unrecoverable Activity Unrecoverable Network Unrecoverable Unrecoverable Activity Unrecoverable Network Unrecoverable Unrecoverable Activity Unrecoverable Network current amount if an RA investment is Network Mediation Leakage + Unrecoverable Leakage + Unrecoverable + Too Expensive to Recover + Too Expensive to Recover Unrecoverable Network Activity Unrecoverable Unrecoverable Unrecoverable Unrecoverable Network Activity Unrecoverable U bl Realized Revenue Realized Revenue Realized Revenue made Billing Leakage + Unrecoverable + Too Expensive to Recover Collections Leakage + Unrecoverable + Too Expensive to Recover Dunning Leakage + Unrecoverable + Too Expensive to Recover Therefore, the RA ceiling defines the Unrecoverable Activity Unrecoverable Network Unrecoverable Unrecoverable Activity Unrecoverable Network Unrecoverable Unrecoverable Activity Unrecoverable Network Unrecoverable maximum investment that you might (collateral Impacts) Realized Revenue Pre-paid Leakage + Unrecoverable Reconciliation + Too Expensive to Recover Realized Revenue Voucher Leakage + Unrecoverable Management + Too Expensive to Recover Realized Revenue Channel Leakage + Unrecoverable Dunning + Too Expensive to Recover possibly make in an RA activity (because Unrecoverable Unrecoverable Activity Unrecoverable Unrecoverable Activity Unrecoverable Unrecoverable Activity Unrecoverable Network Unrecoverable Network Unrecoverable Network you do not want to spend more on RA than Collateral Revenue Assurance Areas the possible recovery you could realize) (New Order Mgmt, Service Order Mgmt, Network Inventory Mgmt) Rob Mattison •© Copyright 2008 GRAPA •© Copyright 2008 GRAPA •33 •34 Re-categorize some noise as either additional realized All money spent on investigation results in additional revenue or additional unrecoverable realized revenue realized revenue Net results: realized revenue Net results: 1. Additional revenue 1. Additional revenue additional realized revenue realized realized additional realized revenue dditi l li d 2. Risk of leakage 2. Risk of leakage leakage + reduced reduced unrecoverable + leakage + 3. Identification of 3. Identification of too expensive to recover unrecoverable + unrecoverable unrecoverable too expensive to recover additional unrecoverable activity increased increased unrecoverable unrecoverable network activity network activity Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •35 •36 © 2011 Rob Mattison www.ra-academy.org 16 of 364
- 52. Revenue Assurance Foundations RAF101: Revenue Governance Noise and Revenue Mapping All money spent on investigation results in additional unrecoverable activity (at least risk exposure is reduced) realized revenue Net results: 1. Additional revenue realized revenue realized 2. Risk of leakage leakage + $ leakage + unrecoverable + unrecoverable + too expensive to recover reduced 3. Identification of too expensive to recover unrecoverable unrecoverable additional unrecoverable activity network activity increased unrecoverable Of course, it is not difficult to add effort and have no network activity impact on the noise one way or the other Rob Mattison •© Copyright 2008 GRAPA Rob Mattison •© Copyright 2008 GRAPA •37 •38 Fraud Roaming Roaming Roaming Reconciliation Collections Negotiation (intentional Impacts) (internally / externally initiated) Inter-carrier Inter-carrier Settlement Collections Negotiation Mapping Perspective Network Mediation Billing Collections Dunning Pre-paid Voucher Channel (collateral Impacts) Reconciliation Management Dunning Collateral Revenue Assurance Areas (New Order Mgmt, Service Order Mgmt, Network Inventory Mgmt) •© Copyright 2008 GRAPA •39 © 2011 Rob Mattison www.ra-academy.org 17 of 364
- 53. Revenue Assurance Foundations RAF101: Revenue Governance Integrated Revenue Management In Response To the market, technology and regulatory shifts Telecoms are forced to create an entirely new business – morphology How to morph continuously How to continuously play captial against risk against current competence and market strength INTEGRATED REVENUE Hyper-dynamism MANAGEMENT The emerging world of telco revenue disciplines The New Model Characteristics Leaves huge gaps that must be filled, or the carrier Operational Excellence looses in the long run Engineering Excellence The Integrated Revenue Management and Risk Risk Management Excellence and Consolidation Assurance Disciplines are Filling the Void p g (Fraud) Revenue Governance Excellence and Consolidation THIS IS A TRANSITION IN PROGRESS (RA) The trend is real, the end it unknown Revenue Revenue Margin Revenue Dimensions Management Stream Integrity Controls Recognition Revenue Designing Strategic New Optimum Technology Engineering Pricing Revenue Engineering Programs Uptake Risk Management New Product Billing Margin and Revenue User Assurance Acceptance Assurance Architecture Market Stream Testing Market Programs Assurance Margin Assets Promotions Programs Assurance Leakage Revenue Stream Proactive Containment Assurance RA © 2011 Rob Mattison www.ra-academy.org 18 of 364
- 54. Revenue Assurance Foundations RAF101: Revenue Governance Integrated Revenue Management • End to end Fraud and Security Containment • Full integration of functions Telco • Business continuity Fraud Office • Revenue Stream Protection • Fraud Management Systems Traditional FM • • H/R Fraud Supply Chain Fraud Fraud • Accts Payable Fraud Accounting • Accts Receivable Fraud Fraud • Sales Fraud • Averse Accessory Fraud Crime • Criminal Fraud Mischief • • Core Network BSS Systems Internal Revenue • Cell (Wireless) Logical Security • • LAN and PC Web, Internet and VOIP Audit Assurance • Employees • Facilities Protection • Office Protection Physical Security • Inventory Protection Prepaid Voice - OnNet Fraud Prepaid Voice - OffNet - Outbound Prepaid Voice - OffNet - Inbound Business Logical Prepaid SMS - Outbound Continuity Security Prepaid SMS - Inbound Interconnect - Intl - Inbound Interconnect - intl - Outbound Physical Security 0 100 200 300 400 500 600 700 800 900 1000 Different kinds of engineering Postpaid Voice - OnNet Interconnect - Intl - Inbound Structural Engineering : Ringback Tones Revenue streams as “bridges” to revenue realization Social Engineering: SMS - Inbound Realizing revenues through an understanding of people Data (GPRS) and their social behaviors Postpaid Voice - HomeNet Product Engineering Postpaid Voice - Responsible for the definition and efficient manufacture ForeignNet of products 0 50 100 150 200 250 300 350 400 450 500 © 2011 Rob Mattison www.ra-academy.org 19 of 364
- 55. Revenue Assurance Foundations RAF101: Revenue Governance Integrated Revenue Management Structural Engineering (Civil Engineering) dealing with the analysis and design of structures Structural engineering theory is based upon that support or resist loads. physical laws and empirical knowledge of the Structural engineers must ensure their designs structural performance of different landscapes and satisfy given design criteria, predicated on safety materials. (e.g. structures must not collapse without d ( ll i h due Structural engineering design utilises a relatively S l i i d i ili l i l warning) or serviceability and performance (e.g. small number of basic structural elements to build building sway must not cause discomfort to the up structural systems that can be very complex. occupants). Structural engineers are responsible for making Structures are made to endure massive loads as creative and efficient use of funds, structural well as changing climate and natural events. elements and materials to achieve these goals Mediation Postpaid Social Engineering System Billing System Collections Dunning (marketing and sales) Switch1 Credit Mgmt Discipline that refers to efforts to influence popular attitudes and social behaviors on a large scale. Before one can engage in social engineering, one must have reliable information about the group that is to be engineered. Switch2 (market research) One must have effective tools to carry out the engineering. (advertising , brand, customer relationship management brand infrastructure) Switch3 Prepaid Voice - OnNet The development of social science made it possible to gather Prepaid Voice - OffNet - Outbound and analyze information about social attitudes and trends, which Prepaid Voice - OffNet - Inbound is necessary in order to judge the initial state of a population Prepaid SMS - Outbound before an engineering attempt and the success or failure of that Prepaid SMS - Inbound attempt after it has been implemented. Interconnect - Intl - Inbound At the same time, the development of modern communications Interconnect - intl - Outbound technology and the media provided the tools through which 0 200 400 600 800 1000 social engineering could be carried out. Product Engineering It includes design, development and transitioning to (Industrial engineering) manufacturing of the product. The term encompasses developing the concept of the product and the design and development of its mechanical, electronics the process of designing and developing a device, and software components. assembly, or system such that it be produced as an For example a product like a digital camera would include item for sale through some production manufacturing defining the feature set, design of the optics, the mechanical and process. ergonomic design of the packaging, developing the electronics that control the various component and developing the software Product engineering usually entails activity dealing with that allows the user to see the pictures, store it in memory, issues of cost, produce-ability, quality, performance, i f d bili li f download to a computer etc. reliability, serviceability and user features. After the initial design and development is done, transitioning the These product characteristics are generally all sought in product to manufacture it in volumes is considered part of Product Engineering the attempt to make the resulting product attractive to its intended market and a successful contributor to the business of the organization that intends to offer the Product engineering is an engineering discipline that product to that market. deals with both design and manufacturing aspects of a product. © 2011 Rob Mattison www.ra-academy.org 20 of 364
- 56. Revenue Assurance Foundations RAF101: Revenue Governance Integrated Revenue Management Revenue Management New Development (Product) Markets (Social) Margins M i (Structural) Revenue Stream Integrity INTEGRATED REVENUE (Structural) GOVERNANCE GRAPA Benchmarks – How do you keep track? Revenue Governance Audit What needs to be done? Fraud How should it be done? Operational Integrity Then – argue about who does what and when? Fill I In “Temporary Solutions that become permanent” Revenue Governance in Your Revenue Governance Framework Organization Roles for : Roles of I/A, RA, NPD, Marketing, Finance, Pricing , Internal Audit Fraud (Network, I/T, Traffic, Accounting, Regulatory-LE) Fraud Revenue Assurance Who worries about: Leakage Proactive P ti Integrity of revenue streams Margin Profit Market New Product Margin Asset In each situation? Operational Management Risk What works? What doesn’t work? SOX © 2011 Rob Mattison www.ra-academy.org 21 of 364
- 57. Revenue Assurance Foundations RAF101: Revenue Governance Integrated Revenue Management Impact vs. Probability Telco Fraud Officers High Medium Risk High Risk I M P Share Mitigate Control A C T Low Risk Medium Risk Accept Control Low PROBABILITY High An integrated view Telecom Specific- areas of fraud Technology CRM Liability Circuit Objectives can be viewed in the Packet – Call Center, – Criminal Liability – Regulatory Liability – Sales, context of four categories: Radio – Marketing – SOX / Investor Liability IN – Government / National New Products Supply Chain Security Liability • Strategic New Technologies – P h i Purchasing, Averse Accessory – Public Relations Liability • Operations I/T – Inventory, – Legal Liability – Logistics, • Reporting Partner – Disbursement – Regulatory Liability • Compliance Interconnect Bypass / SIMBOX Accounting and Admin – Cash Mgmt Roaming – Contract Mgmt Content VNO – Accounts Mgmt 3rd Party/Reseller Executive 1/21/2011 27 1/21/2011 28 Layered strategy for fraud Coverage 1st Line 2nd Line 3rd Line Business Frontline Oversight (Risk Independent Assurance Compliance) • Primary responsibility for • Telco Fraud Officer • Internal Audit provides identifying and independent assurance of • Commonly Legal, managing risk the robustness of the Compliance, Finance, HR, model and systems and • Management puts in Risk Actuarial controls. place appropriate • Fraud Officer provides controls and monitors • Report to the Audit support to the business their effectiveness Committee (Board) through the fraud risk • Roles, responsibilities and management framework relationships between • Fraud Officer provides functions should be challenge to policies clearly documented 1/21/2011 29 © 2011 Rob Mattison www.ra-academy.org 22 of 364
- 58. Revenue Assurance Foundations RAF101: Revenue Governance GRAPA Standards Key Concepts • What is GRAPA? • Accreditation, Verification , Due Process Global Revenue Assurance • Source of Standards, Ratification Process • What are the GRAPA Principles for the professional Professionals Association practice of RA and how are they applied for the Telecommunications Industry • What are the GRAPA Standards for the identification and management of the scope of RA Activity • According to the GRAPA standards what are the Rob Mattison objectives of Revenue Assurance President rob@grapatel.com 2010 GRAPA 2 Rob Mattison, GRAPA Practical Applications What is GRAPA? • What are the GRAPA Standards ? The Global Revenue Assurance • How are they applied to the real world? Professionals Association (GRAPA) was • How can I use the GRAPA standards to formed in 2007 in response to the urgent help me to be successful and help my need for professional recognition among company? those practicing revenue assurance in the telecommunications industry worldwide. 2010 GRAPA 3 2011 GRAPA 4 Rob Mattison, GRAPA Rob Mattison, GRAPA Why does the Telecommunications Mission Industry Need a Revenue Assurance Professionals Association? • To empower our members to make effective business decisions and to • No industry standards enhance their careers through learning and mutual support shared among peers • Lack of a professional community • Strong need for professional identity • This mission is being fulfilled through the • Networking among peers combined expertise and resources of GRAPA members 2011 GRAPA 5 2011 GRAPA 6 Rob Mattison, GRAPA Rob Mattison, GRAPA © 2011 Rob Mattison www.ra-academy.org 23 of 364
- 59. Revenue Assurance Foundations RAF101: Revenue Governance GRAPA Standards Member Business Areas Member Subscriber Base 2011 GRAPA 7 2011 GRAPA 8 Rob Mattison, GRAPA Rob Mattison, GRAPA To learn more about: • GRAPA – www.grapatel.com • Training The GRAPA Benchmarks – www ra-academy org www.ra-academy.org • Telco Fraud Academy Rob Mattison President rob@grapatel.com 2011 GRAPA 9 Rob Mattison, GRAPA Real RA Mission ? • Accomplish 100% compliance with accounting practices The GRAPA Standards • Accomplish 100% perfect processes • Mitigate Risk to Revenue Streams Rob Mattison President rob@grapatel.com 2011 GRAPA 11 Rob Mattison, GRAPA © 2011 Rob Mattison www.ra-academy.org 24 of 364
- 60. Revenue Assurance Foundations RAF101: Revenue Governance GRAPA Standards What are the GRAPA Standards Purpose • A framework which summarizes, defines • To provide the RA professional with: and organizes the standard, professional – Guidelines practices of revenue assurance – Vocabulary p practitioners around the world – Common set of practices – Shared framework for discussing and developing RA 2011 GRAPA 13 2011 GRAPA 14 Rob Mattison, GRAPA Rob Mattison, GRAPA Structure Major Areas • How to define what is in and out of scope • Disciplines for RA – Revenue Assurance Functions and • How to provide management with a clear Responsibilities understanding of what RA • Domains • To provide standards for how RA should – Areas where RA is practiced be practiced • Objectives – The reasons for doing RA • Principles and Ethics – Guides to conduct and practice 2011 GRAPA 15 2011 GRAPA 16 Rob Mattison, GRAPA Rob Mattison, GRAPA The GRAPA Standards Definition Of Revenue Assurance Domain Domain Ethics Principles Disciplines Scope Scope Missions / And Vertical Horizontal Objectives Principles Code Forensic Network Fraud Of Management Fraud Conduct Containment Mediation Rate Plan Corporate Operational Risk Responsibility Interconnect Containment Product Compliance Roaming Development Competence Loss Requirement Collections Product Prevention Correction Line Postpaid Transparency Margin Management Assurance CRM Prepaid Rationalization Channel Marketing Revenue Stream Consensus Corporate Conduct and Standards Assurance Provisioning Standards 2011 GRAPA 17 Rob Mattison, GRAPA © 2011 Rob Mattison www.ra-academy.org 25 of 364
- 61. Revenue Assurance Foundations RAF101: Revenue Governance GRAPA Standards Core Principles The Objectives of RA Activity • Prioritization • Revenue Stream Protection • Rationalization – Loss Detection, Correction, Prevention (Leakage) • Consensus • Revenue Risk Containment • Integrity in relationships – Proactive RA • Integrity in reporting – Anticipate losses and prevent them • Transparency T • Margin Assurance • Innovation – LOB • Pro-activity – Promotion, Bundle • Competency – Asset • Sovereignty – Product • Risk Sensitivity and Responsiveness • Market Assurance • Responsibility – Promotion – Identify, Quantify, Report, Respond – Market Share 2011 GRAPA 19 – New Product 2011 GRAPA 20 Rob Mattison, GRAPA Rob Mattison, GRAPA Revenue Mgmt vs Revenue Assurance In Scope Rules • Validation of commissions • Top Management Explicit Assignment • Validation of revenue recognition numbers • Operational Management Alignment • Content provider invoices • Competent team / Assistance from • Interconnect settlement I t t ttl t operations • Roaming Settlement • Promotion Eligibility Validation • Expired Number Validation 2010 GRAPA 21 2010 GRAPA 22 Rob Mattison, GRAPA Rob Mattison, GRAPA Steps in Domain Addition Major Vertical Domains • Forensics • Network – Assess and identify risks • Mediation • Postpaid Billing • Report risks – recommend controls / • Prepaid corrections • Interconnect (CABS) I t t • Implement controls/corrections • Roaming • Monitor controls • Collections / Credit / Dunning • Report Compliance • Fraud (Management Systems) • Provisioning and Activation • Channel/Sales Activities 2010 GRAPA 23 2011 GRAPA 24 Rob Mattison, GRAPA Rob Mattison, GRAPA © 2011 Rob Mattison www.ra-academy.org 26 of 364
- 62. Revenue Assurance Foundations RAF101: Revenue Governance GRAPA Standards Definition of Horizontal Domains Major Horizontal Domains • Horizontal domains are defined as the • Line of Business end-to-end segmentation of revenue – Prepaid, postpaid streams across the entire revenue • Customer Segment (Major) management chain for a specific type or g p yp – Corporate Consumer Corporate, class of transactions • Customer Segment (Minor) • Typically a horizontal domain will reflect all – Teens, Business types, Housewives aspects of revenue management for a • Product Line particular subset of transactions – Voice , SMS, Content, Data, ISP , DSL – Rate Plan, Bundle 2011 GRAPA 25 2011 GRAPA 26 Rob Mattison, GRAPA Rob Mattison, GRAPA © 2011 Rob Mattison www.ra-academy.org 27 of 364
- 63. Revenue Assurance Foundations RAF101: Revenue Governance RA Lifecycle Key Concepts • How does GRAPA define and segregate the different Revenue Assurance Functions. RA Lifecycle • How do the GRAPA standard organize the different RA jobs to be done? • What are the skills and requirements of performing each of the RA jobs? • How do you measure each job? Copyright – 2008 GRAPA Rob Mattison, 2 Practical Applications What are the RA disciplines? • How to Organize your RA team? • The RA disciplines define the major • How to organize the training of RA team activities of any Revenue Assurance members? professional. • How to track, measure and control the RA track • These disciplines are each defined in jobs? order to accomplish a different set of • Be sure that you are doing everything you objectives are supposed to be doing. Copyright – 2008 GRAPA Rob Mattison, 3 Copyright – 2008 GRAPA Rob Mattison, 4 The Disciplines The Disciplines – Objectives • Forensic Analysis • Forensic Analysis – Asses risk and recommend corrections/coverage • Compliance plans • Corrections • Compliance – Assure that coverage plans are being followed – Controls Management - Operational Reporting – Monitor operational risk, detect variance, trigger corrections or forensics • Corrections – Assure that recommended corrections are made Copyright – 2008 GRAPA Rob Mattison, 5 Copyright – 2008 GRAPA Rob Mattison, 6 © 2011 Rob Mattison www.ra-academy.org 28 of 364
- 64. Revenue Assurance Foundations RAF101: Revenue Governance RA Lifecycle Forensic Analysis Report to: • Forensic Analysis is the process of Assessment Management -Management F -Internal Audit R -Operational M e determining the risk of loss or actual loss Internal Audit o Management Cases p a r Customer Complaints e o n a found within a specific operational area Recommended r Internal Incidents n s Corrections Correction t g e ( (domain). ) i External Incidents Domains i n m e • The purpose of Forensic Analysis is to: c COMPLIANCE Operational Monitoring s g n – Identify Potential Risks t Coverage Plan Controls – Quantify Risks Management – Recommend Corrections – Develop Coverage Plans Copyright – 2008 GRAPA Rob Mattison, 8 Forensic Methods How It Is Used? • In order to accomplish the objectives of forensic • Case management – respond to issues evaluation, there are several tools that the investigator can use: raised - Risk Analysis • One time – comprehensive AUDIT - Exchange analysis -PProcess analysis l i • Roadmap to prioritization – (“Where ( Where - Systems analysis should I begin?”) - Numerical / Statistical Analysis • Major tool for RA manager • Principle tools: – PC – documentation – Lab – data and analysis tools Copyright – 2008 GRAPA Rob Mattison, 9 Copyright – 2008 GRAPA Rob Mattison, 10 The Forensic Laboratory What is Controls Management? • In order to be effective, the investigator requires • Controls Management is: a “forensic laboratory.” – The process of tracking on the operational • This laboratory is nothing more than a simple integrity of different parts of the revenue secured data management area: management chain – Disk, CPU, and analytical tools • That allow the forensic analyst to perform the job – The process of executing and reporting on the of investigating and diagnosing situations results of a coverage plan • Ultimately, no investigation is useful until FACTS – Making sure that the risk of revenue is being and FIGURES have been produced to contained substantiate suspicions – Escalation when perform goes outside of risk tolerance levels set by management Copyright – 2008 GRAPA Rob Mattison, 11 Copyright – 2008 GRAPA Rob Mattison, 12 © 2011 Rob Mattison www.ra-academy.org 29 of 364
- 65. Revenue Assurance Foundations RAF101: Revenue Governance RA Lifecycle Controls Categories Horizontal Techniques • Horizontal Techniques • These are monitoring techniques that test – Test Calls /Simulators the end-to-end effectiveness of a revenue – Synchronization management chain – Revenue Reporting and Analysis • Most often utilized to horizontal domains • V ti l T h i Vertical Techniques – Audits – Operational Controls and Alarms • Onboard Operational • Bolt-On (Data Warehouse/COTS) – Change management – Security and Access Copyright – 2008 GRAPA Rob Mattison, 13 Copyright – 2008 GRAPA Rob Mattison, 14 Test Calls Test Calls – How does it work? • The “Swiss Army Knife” of Revenue • Define the domain of areas to be tested Assurance (define Horizontal Test Domains) • Can be utilized to assure almost anything – Specific rate plans – Specific p p products – Specific customers / segments • Define a “test plan” – Determine what variables need to be included within the test plan – Define frequency, range and spread Copyright – 2008 GRAPA Rob Mattison, 15 Copyright – 2008 GRAPA Rob Mattison, 16 Test Plan Execution Synchronization Definition • Make the series of test calls at specified • Synchronization is the process of assuring times, from specified locations to specified that two or more systems that share the locations for specified duration same reference file have matching values • Collect transaction information for those for the referenced information periods • Determine if calls are captured and reported accurately Copyright – 2008 GRAPA Rob Mattison, 17 Copyright – 2008 GRAPA Rob Mattison, 18 © 2011 Rob Mattison www.ra-academy.org 30 of 364
- 66. Revenue Assurance Foundations RAF101: Revenue Governance RA Lifecycle Cross Table Synchronization Revenue Reporting Sales General/ Mgmt • Development and tracking of the “definitive” Network Inventory Billing Mediation I/N HLR OSS CRM Ledger System revenue reporting numbers Network Elements • Provide for time and trend analysis Network Control Tables • Compare forecast vs actual ongoing Mediation Control Tables Post Paid Post-Paid Billing Control • Provide for reporting decomposition to the level p g p Tables required Prepaid Voucher Management Control Tables • Minimum level is by revenue LOB/Revenue Inter-carrier Control Tables Stream (ie Inbound International, Outbound Roaming Control Tables International, Inbound Local etc). Order Management System • Full decomposition to the level of the revenue Call Center Management System stream Service Order Management – Lower when margin analysis is involved System Copyright – 2008 GRAPA Rob Mattison, 19 Copyright – 2008 GRAPA Rob Mattison, 20 Alarms and Controls Four-Week Trend Analysis of Traffic Realized Per Day • Based upon drastic increase or drop in • Four-week trend analysis revenue pattern 60000 – Early warning for churn, or revenue erosion of 50000 many types 40000 Week 1 • Based upon Forecast vs Actual (when Week 2 30000 applicable) Week 3 20000 Week 4 10000 0 Mon Tues Wed Thurs Fri Sat Sun Copyright – 2008 GRAPA Rob Mattison, 21 Copyright – 2008 GRAPA Rob Mattison, 22 Auditing Types of Audits • Most commonly practiced audit types • Process audits • System audits – Bill cycle audits – Bill cycle audit – Network – Collections audits • Configuration audits – Mediation • Principle objective – Customer – Post-Paid billing – Validate that the process is executed correctly. –P d t Product – Prepaid – Network element – Interconnect • Why? • Event-triggered – Roaming – Continuously occurring problems and a decision that the area deserves this level of investment in audits assurance – New product – Network change – New rate plan Copyright – 2008 GRAPA Copyright – 2008 GRAPA Rob Mattison, 23 – New carrier partner Rob Mattison, 24 © 2011 Rob Mattison www.ra-academy.org 31 of 364
- 67. Revenue Assurance Foundations RAF101: Revenue Governance RA Lifecycle Event Audits Operational Report based Alarms – Major types • Monitoring reports are a critical part of the • New product RA process • Network change • The challenge is in deciding • New rate plan • New carrier partner network N i t t k – Who will create – Major activities – Who will monitor • Trace – Who can react in what way to anomalies • Test call • Configuration verification • Bill cycle audit Copyright – 2008 GRAPA Rob Mattison, 25 Copyright – 2008 GRAPA Rob Mattison, 26 Bolt-On Operational Reports Operational Report Based Alarms • Data Warehouse Generated • Most commonly practiced – Monitoring of activity within each operational system • 3rd Party “COTS” Bolt-On • Principle objective • Can do the job , but add extra cost, risk – Assure revenue flow and administrative overhead – Identify anomalies as q y quickly as p y possible • Why? – The reports should be automatically generated and monitored by the operational area itself - the RA job is to cross-check – When an operational system cannot create needed reports, RA will commission, execute, and review the reports Copyright – 2008 GRAPA Rob Mattison, 27 Copyright – 2008 GRAPA Rob Mattison, 28 Typical Monitoring Reports Specialized Techniques • FSEC Reports • Probes – Filter • Parallel auditing / pseudo rating engines – Suspend – Error – Consolidate C lid t • MI/MO – minutes in/ minutes out • DI/DO – dollars in/dollars out • Trending reports • Aging reports • Policy compliance reports Copyright – 2008 GRAPA Rob Mattison, 29 Copyright – 2008 GRAPA Rob Mattison, 30 © 2011 Rob Mattison www.ra-academy.org 32 of 364
- 68. Revenue Assurance Foundations RAF101: Revenue Governance RA Lifecycle Change Management Typical Change Management Scenarios • Key Component of revenue assurance • Addition of network elements • Method utilized to assure that any major • Addition of interconnect / roaming partner changes to operations that might impact • Addition of rate plan revenue integrity are monitored and tested • Changes t rate plan Ch to t l before exposure • Addition of new customers • Introduction of new business line Copyright – 2008 GRAPA Rob Mattison, 31 Copyright – 2008 GRAPA Rob Mattison, 32 Typical Change Management Profile Security • Identify point of change • Standard I/T controls should be prevelant • Institute reporting and sign off policies everywhere • Identify revenue integrity related tests • Password, Login before certification / release • Tracking of changes • Monitor and report like any other • Manager and independent oversight of compliance systems manipulation Copyright – 2008 GRAPA Rob Mattison, 33 Copyright – 2008 GRAPA Rob Mattison, 34 The corrections process Primary responsibility for: • Corrections can be part of RA job or not • Identification of the need for corrections: • Tracking and reporting on corrections – Forensics should ALWAYS be included as part of • Definition of optimum, rationalized compliance reporting correction approach – Forensics • Acceptance and approval of correction plan – Operational Manager / Top Management • Execution of correction activity – Operational Manager Copyright – 2008 GRAPA Rob Mattison, 35 Copyright – 2008 GRAPA Rob Mattison, 36 © 2011 Rob Mattison www.ra-academy.org 33 of 364
- 69. Revenue Assurance Foundations RAF101: Revenue Governance RA Lifecycle Corrections Lifecycle Management Defining a compliance management strategy • 1. Need for correction noted as part of forensic • Issue 1 – Determining risk levels review • Issue 2 – Defining reporting strategy • 2. Generation of correction plan with rationalization • Issue 3 – Determining who will execute the • 3. Approval of recommendation by operational monitoring manager and top management • Issue 4 – Defining the escalation policy • 4. Negotiation of responsibility of execution • Issue 5 – Defining the compliance • 5. Tracking of progress of correction activity reporting procedures • 6. Closure of correction case • Issue 6 – Execution Copyright – 2008 GRAPA Rob Mattison, 37 Copyright – 2008 GRAPA Rob Mattison, 38 Practical Applications • How to Organize your RA team? • How to organize the training of RA team members? • How to track, measure and control the RA jobs? • Be sure that you are doing everything you are supposed to be doing. • What are the GRAPA Standard controls and how are they applied to all of the different domains ? Copyright – 2008 GRAPA Rob Mattison, 39 © 2011 Rob Mattison www.ra-academy.org 34 of 364
- 70. Revenue Assurance Foundations RAF101: Revenue Governance Domain Analysis Methodology What is the DAM? What is the purpose? How is it organized? How is it used? Where can it be applied? Wh b li d? The DAM mapping process What are the DAM© domains and how can the Systematic Discipline be utilized to assist in the assurance of How to assure anything, anywhere anytime different revenue streams. Dependable, consistent How to utilize the DAM© as an aide to Structures revenue assurance domain decomposition decomposition. O i Organizes How to utilize the DAM© to identify and map Provides dependable , finance based the proper controls to an area. perspective CHANNEL MARKET MGMT PROVISIONING -Activation -POS - Customer ID ACCOUNT MGMT -Credit Mgmt -Promotions -Products Includes different types or categories of controls and issues -Authentication - Fungible Asset Mgmt --Balance Mgmt -Bundles -Authorization - Cash/Credit Mgmt -Deal / Promotion -Subsidies -Accounting -Channel exchange Mgmt Each requires different skills and perspectives -Forecasts Mgmt controls -Adjustment Mgmt (contract/commission) -Margin Mgmt The DAM© organizes and standardizes the PARTNER MGMT names and approaches Access Service -Agreement Mgmt Architecture Delivery -Settlement Mgmt -Wireless (GSM) Architecture REVENUE STREAM -Credit Mgmt - WiMax -Rate Mgmt -WiFi -Circuit (ss7) (billing architecture) -Change Mgmt -Satellite -Packet (IP) -Configuration/Provisio -LTE/UMTS… -Streaming ning Mgmt © 2011 Rob Mattison www.ra-academy.org 35 of 364
- 71. Revenue Assurance Foundations RAF101: Revenue Governance Domain Analysis Methodology Is a person who understands each Domain Objective Family Systematic Understands how to map, assign and calibrate the controls for each Scientific D Decomposable bl For the RA PROFESSIONAL – specific technologies or implementations are simply Manageable “part of the process” Measurable The job of revenue assurance and controls assignment is greatly simplified/standardized A) Topology Assessment (Access Architecture) B) Topology Assessment (Service Delivery Architecture) C) Billing Architecture Assessment (Postpaid, Prepaid, RADIUS, Convergent, Other) D) AAA Assessment A E) Noise Analysis, Revenue Mapping F) Confidence Assignment G) Scope Management ◦ Patrol, Panoptic, Plenary H) Compliance and Reporting PROVISIONING ACCOUNT MGMT CHANNEL -Activation -Credit Mgmt -POS -Authentication --Balance Mgmt - Customer ID -Authorization -Deal / Promotion - Fungible Asset Mgmt -Accounting Mgmt - Cash/Credit Mgmt -Adjustment Mgmt A) Identification of Relevant Domains Provisioning Management Account Management Partner Management TOPOLOGY REVENUE STREAM Channel Management Market Management B) Mapping of Standard Controls C) Confidence Ranking of Domain REVENUE D) Compliance and Reporting CENTRIC REVENUE APPLICATIONS CENTRIC and NETWORK APPLIANCES ELEMENTS ASSET ASSURANCE © 2011 Rob Mattison www.ra-academy.org 36 of 364
- 72. Revenue Assurance Foundations RAF101: Revenue Governance Domain Analysis Methodology CHANNEL PROVISIONING ACCOUNT MGMT -POS -Activation -Credit Mgmt - Customer ID -Authentication --Balance Mgmt - Fungible Asset Mgmt -Authorization -Deal / Promotion - Cash/Credit Mgmt -Accounting Mgmt -Commission Mgmt -Adjustment Mgmt Mapping of channels to revenue streams Building of channel maps Identification of KCP (Key control points) Assignment of controls Assessment of confidence A f fid Coverage Plan Implementation Compliance and Reporting TOPOLOGY REVENUE STREAM PROVISIONING ASSURANCE PROVISIONING ACCOUNT MGMT CHANNEL -Activation -Credit Mgmt -POS -Authentication --Balance Mgmt - Customer ID -Authorization -Deal / Promotion - Fungible Asset Mgmt -Accounting Mgmt - Cash/Credit Mgmt -Adjustment Mgmt Mapping of provisioning activities to revenue streams Building of provisioning maps Identification of KCP (Key control points) A i t f t l Assignment of controls Assessment of confidence Coverage Plan Implementation TOPOLOGY REVENUE STREAM Compliance and Reporting PROVISIONING ASSURANCE Customer Assurance Assignment of margin domain Credit Risk Management ◦ LOB, Promotion, Bundle ◦ Development of unique margin revenue stream ◦ Definition of controls and alarm levels ◦ p g p Revenue reporting control development ◦ Compliance and reporting © 2011 Rob Mattison www.ra-academy.org 37 of 364
- 73. Revenue Assurance Foundations RAF101: Revenue Governance Domain Analysis Methodology Assignment of market domain ◦ Product, Promotion, Bundle ◦ Development of unique market control (model capture discipline) ◦ Definition of controls and alarm levels ◦ Revenue reporting control development ◦ Compliance and reporting © 2011 Rob Mattison www.ra-academy.org 38 of 364
- 74. Revenue Assurance Foundations RAF101: Revenue Governance Revenue Assurance Governance RA – Postures What is an RA Posture Patrol, Panoptic, Plenary RAG What are the appropriate and standardized methods for the measurement of RA Activity What are the standard KPI’s for each major functional domain Forensics, Corrections, Compliance How to build and execute standard controls reporting framework Integration of Confidence into reports/models Understand and communicate the 3 different Understand and communicate what a postures for an RA group to have in relation margin/forecast variance report is, and why it to a revenue stream or a domain. is critical to management understanding of Communicate the different postures to h d ff revenue assurance effectiveness. ff management . Understand how to make a margin/forecast Communicate the cost/benefit tradeoffs variance report and tie it into your RA associated with each posture operational reporting Understand and communicate what Understand and communicate what confidence mapping is and communicate the Assignation and Activity reporting is, why it is management the value of this type of done, and how it can be utilized to reporting communicate RA contribution in a relevant, b l Understand how to perform confidence immediate and objective way mapping and apply it to your KPI reporting Understand how to build and deliver assignation and activity reports © 2011 Rob Mattison www.ra-academy.org 39 of 364
- 75. Revenue Assurance Foundations RAF101: Revenue Governance Revenue Assurance Governance C‐Level Best Effort • CFO / CMO Expert Opinion Patrol Current GRAPA Program Panoptic Tactical – Belt Programs Plenary In depth / Domain Based 2 controls initiated in response to Incident © 2011 Rob Mattison www.ra-academy.org 40 of 364
- 76. Revenue Assurance Foundations RAF101: Revenue Governance Revenue Assurance Governance Role of Revenue Assurance – How do you tie revenue assurance activities Financial Controls Perspective DIRECTLY and IMMEDIATELY to the financial The RA Functions as support to Financial management of the firm Controls Make RA Compelling and Immediately Relevant How do you measure revenue assurance activity against immediate and relevant financial monitoring activity How do you describe, organize and negotiate the level of revenue assurance coverage activity in a way that is consistent and makes sense to Controller / CEO? RAG Revenue Assurance Governance Model How do we set up a certification program KPI Framework that ties RA Activity, that provides CEO/CFO confidence in the Coverage and Headcount to Financial findings, conclusions and opinions of the RA Controller Space Employee? l Revenue Stream Driven Reporting and How do we create a method for the objective Tracking assessment of RA Skills and Mapping of other Domains and Dimensions Accomplishments to Revenue Streams Participation of RA in the reporting of “real revenues” and tracking of margin realization Improve Improve Improve Reliability and Confidence and CAPEX Confidence in Reliability of (ROI) RA Posture Forecast Margin Assumptions Best Effort, Expert, Patrol, Panoptic, Plenary Domain Specific Knowledge, Testing and Certification Leakage Discovery and Recovery √ ↑ Standard controls based certification by Domain Levels of Gradiated Expertise Leakage Prevention √ ↑ White Belt – Understand GRAPA approach LOB Margin Assurance √ ↑ Yellow Belt – Proven Expertise in a domain (tested) Promotion (Market )Assurance √ ↑ Green Belt – Proven knowledge of how things work in your organization and mapping of industry standards to your Bundle and Subsidy Assurance √ ↑ organization Asset Margin Assurance + Black Belt – Proven analysis and application of principles to green belt knowledge New Product Assurance √ ↑ Settlement Assurance √ ↑ © 2011 Rob Mattison www.ra-academy.org 41 of 364
- 77. Revenue Assurance Foundations RAF101: Revenue Governance Revenue Assurance Governance Controls – link and coordinate the functions Forecast Postpaid Sales Margin Assumption Corrections Complianc e Settlement s Real Controls Controls Sales Usage Collections And Revenue Subsidies Relationships Interconnect Vendor between Forensic Commissions s Subsidies Revenue Assurance Functions Margin Reality Revenue Assurance: Compliance Area – Definitions Prepaid Budget Collection Formalized and organized process for the discovery, investigation, diagnosis, quantification and reporting of risks to revenue and the preparation of proposed “treatments” - (corrections, controls, compliance postures) Usage Sales Forecast Formalized and organized process for the containment or elimination of risks to revenue through the implementation of changes to policies, procedures or systems, or through the implementation or strengthening of controls and compliance. p Formalized and organized process for the verification that revenue and Postpaid Revenue fraud controls are in fact being enforced at the level and frequency Collection Postpaid described by the “compliance contract”. Recognition All activities associated with H/R, training, administration and other operational “overhead” tasks. Case Filtration Rules (Contract) : a) Sources for Cases b) Types of cases that will be accepted c) Domains that will be accepted d) Rules for Prioritization Revenue At Risk (RAR) Calculation Formal “Sourcing” Agreement (Includes a commitment(budget) for month) Rules: What kinds of cases a) Periodicity b) Method of computing risk What sources Formal Service Level Agreement How Quickly Forensics F i How Well Forensic Investigation Rules: Formalized Revenue At Risk Calculation Algorithm a) How to report cases b) How to report time Consistent measure of findings c) Investigation Methods (type of case) QA for Forensics Cases: Quality Assurance on Forensics a) Rules for how often and under what conditions: Methods Employed a) Case Report Audits Standards b) RAR Calculation Audit c) Time Reporting Audit Audits © 2011 Rob Mattison www.ra-academy.org 42 of 364
- 78. Revenue Assurance Foundations RAF101: Revenue Governance Revenue Assurance Governance Correction Uptake Rules: a) Sources for Corrections b) Rules for how corrections will be managed c) Rules for Role of RA in Project Execution Formal Risk Assessment Report – Corrections d) Rules for tracking of Projects (Each project includes Recommendation HeadCount Commitment) What was investigated Project Management Rules: Findings a) Rules for the management of projects Corrections b) Rules for tracking and reporting contracts Conclusions and Corrections Recommendations Corrections (Project Plan) What will be done/ by whom/ when Quality Assurance on Compliance QA for Corrections Projects Standard Project Management Tracking a) Rules for how often and under what conditions projects are audited Compliance Contract: a) Comprehensive forensics of the domain b) Calibration of all Standard Controls c) Agreement to verify (n) controls (y) times per month d) Headcount Forecast (commitment) Formal Risk Assessment Report – Compliance Recommendation What was investigated Compliance Methodology Rules: a) How to verify and report that controls Findings are being checked Compliance b) Reporting on control results Conclusions and Compliance Recommendations Formal Compliance Contract What area will be monitored # Controls / #Times /ManHours QA for Compliance Escalation Procedures (Pass/Fail/Alarm/Skip) a) How often do you verify that the compliance is being done correctly Quality Assurance on Compliance “SOX” Audits KPI Report Format Compliance Admin Corrections Forensics Unit of Measure: Unit of Measure: Unit of Measure: Unit of Measure: ----------------------- ----------------------- ----------------------- ----------------------- Controls Employees Projects Cases Reported by: Reported by: Reported by: Reported by: ----------------------- ----------------------- ---------------------- - ----------------------- Revenue Stream Employee Revenue Stream Revenue Stream INPUTS: INPUTS: INPUTS: INPUTS: ------------- ------------- ------------- ------------- - # Controls - # Projects - # Cases Opened - Activity Type - Frequency - Types of Projects - Types of Cases - Forecast Man Hours - Forecast Man Hours - Source (who submitted) - Source (who submitted) - Severity (criticality) - Severity (criticality) - Revenue Stream - Revenue Stream - Forecast Man Hours - Forecast Man Hours OUTPUTS OUTPUTS OUTPUTS OUTPUTS --------------- --------------- --------------- --------------- - Controls Passed - Projects in Progress - Revenue at Risk - Man Hours - Projects Closed - Controls Failed - Cases In Process - Controls Not Checked - Closed Ontime - Cases Closed - Controls Escalated - Revenue Recovery - Actual Man Hours - Man Hours - Man Hours © 2011 Rob Mattison www.ra-academy.org 43 of 364
- 79. Revenue Assurance Foundations RAF101: Revenue Governance Revenue Assurance Governance CHANNEL MARKET MGMT PROVISIONING -POS ACCOUNT MGMT -Promotions -Activation - Customer ID -Credit Mgmt -Products -Authentication - Fungible Asset Mgmt --Balance Mgmt -Bundles -Authorization - Cash/Credit Mgmt -Deal / Promotion -Subsidies -Accounting -Channel exchange Mgmt -Forecasts Mgmt controls -Adjustment Mgmt -Margin Mgmt (contract/commission) PARTNER MGMT -Agreement Mgmt Network Network -Settlement Mgmt Access Service REVENUE STREAM -Credit Mgmt -Rate Mgmt Architecture Delivery (billing architecture) -Change Mgmt Architecture -Configuration/Provisioning Mgmt © 2011 Rob Mattison www.ra-academy.org 44 of 364
- 80. Revenue Assurance Foundations RAF102: Network Foundations Network Operations Key Concepts • The Domain Analysis Methodology (DAM©) • Access Architecture • Service Delivery Architecture • Standard Controls for Network • AAA (Authentication, Authorization, Network Foundations Accounting) 1/21/2011 +1-847-426-2069 www.ra-academy.org 1 Rob Mattison 2 © Copyright 2008 GRAPA © Copyright 2008 GRAPA Key Concepts Domains – Service Delivery Understanding, diagnosing and Assurance • Voice/Circuit network – key tools and methodology – PSTN, POTS,GSM, CDMA Topology – SS7 Control Protocol • Packet/Data Transactional integrity – DSL, Cable, Fiber – IP / ATM , SIP Mapping of AAA • Broadcast – Radio, TV, Cable, IP – Docsis 3.0 Rob Mattison 3 Rob Mattison 4 © Copyright 2008 GRAPA © Copyright 2008 GRAPA Domains – Access Architecture Summary Day at a Glance • Wired Overview – PSTN • 1 Hour – Cable/Fiber/Leased Line Circuit • 2 Hour • Wireless – GSM/CDMA Broadcast • .5 Hour – LTE/UMTS/4G/3G Packet – WIMAX • 2.5 Hour – WIFI Hybrid and NGN – Satellite • 2 Hour Rob Mattison 5 Rob Mattison 6 © Copyright 2008 GRAPA © Copyright 2008 GRAPA © 2011 Rob Mattison www.ra-academy.org 45 of 364
- 81. Revenue Assurance Foundations RAF102: Network Foundations Network Operations Assurance of the Network Tendency • The network is where it all begins • The tendency is for accountants , fraud managers and RA teams to deal with the SYMPTOMS • The majority of revenues are delivered by – (Corrupt CDR, missing CDR, accounting? ) and accounted for by the network • Not with the root cause • Network is the foundation for RA Rob Mattison 7 Rob Mattison 8 © Copyright 2008 GRAPA © Copyright 2008 GRAPA In order to do effective assurance and protection Key Concepts • You must • The NOC =The Fantasy and the Reality – Understand the underlying physical • Maintaining Quality of Service and architecture of the network Dependability – Understand how transactions occur • The control architecture environment – – Understand how they are captured management architecture – Understand the limitations and liabilities inherent in the environment • The Network Engineer Personality /Culture • Anti-Money, Anti-Security , the “prima donna” • Key Roles, Responsibilities and © Copyright 2008 GRAPA Rob Mattison 9 Perspectives © Copyright 2008 GRAPA Rob Mattison 10 The political issues For Each Line of Business / Tech Set • Traditionally , network operations has • Separate Staff been considered a separate universe • Parrallel Functions • Linkage between OSS and BSS has been • Little interoperability tenuous • NO overall security/assurance framework y • Network operations has its own audit and accountability Rob Mattison 11 Rob Mattison 12 © Copyright 2008 GRAPA © Copyright 2008 GRAPA © 2011 Rob Mattison www.ra-academy.org 46 of 364
- 82. Revenue Assurance Foundations RAF102: Network Foundations Network Operations For Each Line of Business / Tech Set • Operating Principles • What is the NOC? – Media • How Organized? – Protocols and Control Mechanisms • The NOC Culture • Topology / Circuit-Session Mgmt p gy g • Captain Kirk C t i Ki k • Transaction Capture and Accounting • Fraud and Assurance Risks Rob Mattison 13 Rob Mattison 14 © Copyright 2008 GRAPA © Copyright 2008 GRAPA NOC Fantasies OSS Management • Hierarchical control •The OSS System • Degree of control – Which controls the network OSS – Network Management System (NMS) • Chain of command • Systems that manage EMSs • Dependability D d bilit – Element Management System (EMS) • Actionabilty • Systems that manage collections of network elements (typically one EMS per device type) • Reaction Time – Network Elements • Degree of Transparency • The actual devices that make up the network itself (switches, routers, cable, and so on) – Rings/Trunks – Routers/Bridges – Switches continued... Rob Mattison 15 Rob Mattison 16 © Copyright 2008 GRAPA © Copyright 2008 GRAPA Support Systems Network Creation • OSS • Mission – Operational Support System – Plan, engineer, model, install, test and integrate physical – Operational system that keeps track of the complete network and logical inventory inventory and coordinates and manages all activities • Inventory Includes – MDD – Mediation Device Driver (allows 2 systems to communication – Network Elements and exchange information) • Transport Elements (Cabling) – NMS – Network Management System • Switches • Systems that manage EMSs • Routers • Access Devices (DLC etc.) – EMS – Element Management System • LMDS Devices • Systems that manage collections of network elements (typically one EMS per device type) – Topology • Arrangement of network elements into structures – Network Elements – Circuits / Services • The actual devices that make up the network itself (switches, routers, • Things that provide value to customers – i.e a completed cable etc.) phone call is a temporary circuit between 2 phones Rob Mattison 17 Rob Mattison 18 © Copyright 2008 GRAPA © Copyright 2008 GRAPA © 2011 Rob Mattison www.ra-academy.org 47 of 364
- 83. Revenue Assurance Foundations RAF102: Network Foundations Network Operations Network Creation Process Network Assurance • 1. Build Electronics (Design Solution) • Mission • 2. Order equipment – Keep the network physical inventory up and • 3. Register inventory in OSS and other places running and available to deliver services where required – Network monitoring and preventive maintenance • 4. Issue work order for installation • 2 areas • 5. Installation and testing – Network Assurance Fault Management • 6. Planned event to bring device on line • Troubleshooting and Immediate response to problems • 7. Update network inventory – Network Assurance – Performance Management • 8. Acceptance test • Environmental monitoring, planning and proactive, preventative actions • 9. Turn over to NOC Rob Mattison 19 Rob Mattison 20 © Copyright 2008 GRAPA © Copyright 2008 GRAPA Network Assurance – Fault Management Network Fault Management - Process • 1. Alarm Occurs • 2. Map alarm to a fault • Mission: – (determine alarm cause) • 3. Analyze impact of fault on service – Set, execute and continuously Improve Mean – (determine alarm effect) Time To Repair ( p (MTTR) and Mean Time To ) • 4. Notify customer within MTTN Notify customer (MTTN) for network problems • 5. Determine how to fix it • 6. Raise Fault Ticket to repair personnel that occur • 7. Raise Trouble Ticket for inventory addition – (order new parts) • 8. Track until fixed • 9. Determine overall MTTR Rob Mattison 21 Rob Mattison 22 © Copyright 2008 GRAPA © Copyright 2008 GRAPA Network Assurance – Performance Management Network Performance Management Process • Mission: • 1. Define the parameters that should be monitored by fault management group – Prevent faults from occurring • 2. Map these parameters to a set of “managed – Optimize network operations parameters” – “managed parameters” are those things that the performance management group will watch on a regular basis • 3. Determine if the parameters being monitored are within their marginal range – When outside of range issue TCE (Threshold Crossing Event) • 4. Issue Work Orders to re-calibrate the network with parameters are out of range Rob Mattison 23 Rob Mattison 24 © Copyright 2008 GRAPA © Copyright 2008 GRAPA © 2011 Rob Mattison www.ra-academy.org 48 of 364
- 84. Revenue Assurance Foundations RAF102: Network Foundations Network Operations Service Creation (Product Management Group) Service Fulfillment - (Provisioning) • Mission: to define – Definition of service to customer • Mission: • Price, packaging, features etc. – Completely provide service configuration to the – Definition of service to network customer when the product is ordered • Functions, SLAs, characteristics – Fulfillment rules and workflows – MTTN and MTTRs – Activation procedures and timings – Service level agreements and compliance – MACD (Move, Add, Change, Delete) – Reporting requirements – Billing feeds Rob Mattison 25 Rob Mattison 26 © Copyright 2008 GRAPA © Copyright 2008 GRAPA Key Points • Flat Architecture • Exception based response • Case based focus • No N overall control environment ll t l i t • Vulnerability of autonomous units • Vulnerability of unsupervised / managed units • Difficult to get help Rob Mattison 27 © Copyright 2008 GRAPA © 2011 Rob Mattison www.ra-academy.org 49 of 364
- 85. Revenue Assurance Foundations RAF102: Network Foundations Media Network Operations – The Matrix Media Circuit Packet Broadcast Wireless Wireline Rob Mattison The Revenue Assurance Academy +1-847-426-2098 www.ra-academy.org © Copyright 2010 © Copyright 2007 Rob Mattison 2 Circuit Based Technology Packet Based • A dedicated “Circuit” is created between • Packet based technologies include: the two parties – IP / ATM • When you make a “traditional” telephone • Under packet based, there is no call, you “tie up” the line from one end to “CIRCUIT”, you simply “chop up” the the th th other message and send it across the network • Circuit based was the original • Packet based is more efficient • It is VERY inefficient (80% of conversation – However is pausing) • There are huge issues with security, • Much of telecommunications engineering quality and integrity, since you cannot is about eliminating this constraint control the path/choices directly © Copyright 2007 Rob Mattison 3 © Copyright 2007 Rob Mattison 4 Broadcast Physical Media • Continuous Streams • Pure Copper • Customer acquire access to stream • Twisted Copper • Typically timed access or set fee – Twisted Pair • Also “O D Al “On Demand” – VOD d” – CAT5 • Coax • Fiber Optic © Copyright 2007 Rob Mattison 5 © Copyright 2007 Rob Mattison 6 © 2011 Rob Mattison www.ra-academy.org 50 of 364
- 86. Revenue Assurance Foundations RAF102: Network Foundations Media Why Understand Capacity/Terminology Measuring Capacity • Allows you to communicate and understand engineers • There are many standards to measure the capacity of a cabling structure including: • Allows you to approximate capacity and – Tx – the US standard risk – Ex – the European standard • Allows you to assess security risk – OCx – the optical standard – DSx – the overlying standard – STM - Newer high end optical standard © Copyright 2007 Rob Mattison 7 © Copyright 2007 Rob Mattison 8 Designation Frequency Wavelength E Power L F S extremely low frequency 3Hz to 30Hz 100'000km to 10'000 km Lines RF Technologies L superlow frequency 30Hz to 300Hz 10'000km to 1'000km F U L F ultralow frequency 300Hz to 3000Hz 1'000km to 100km • GSM / 3G V L very low frequency 3kHz to 30kHz 100km to 10km Submarine • CDMA / WCDMA F Communications L F low frequency 30kHz to 300kHz 10km to 1km • LMDS / MMDS M F medium frequency 300kHz to 3000kHz 1km to 100m Shortwave Sh • Microwave H F high frequency 3MHz to 30MHz 100m to 10m Radio • WiFi • WiMax V H very high frequency 30MHz to 300MHz 10m to 1m F GSM • Satellite Microwave U H ultrahigh frequency 300MHz to 3000MHz 1m to 10cm F S H superhigh frequency 3GHz to 30GHz 10cm to 1cm Bluetooth • Pager F E H extremely high frequency 30GHz to 300GHz 1cm to 1mm Wireless Phone • GPS Tracking F © Copyright 2007 Rob Mattison 10 © 2011 Rob Mattison www.ra-academy.org 51 of 364
- 87. Revenue Assurance Foundations RAF102: Network Foundations AA-SDA-AAA CHANNEL MARKET MGMT PROVISIONING -POS ACCOUNT MGMT -Promotions -Activation - Customer ID -Credit Mgmt -Products -Authentication - Fungible Asset Mgmt --Balance Mgmt -Bundles -Authorization - Cash/Credit Mgmt -Deal / Promotion -Subsidies -Accounting -Channel exchange Mgmt -Forecasts Mgmt controls -Adjustment Mgmt -Margin Mgmt (contract/commission) PARTNER MGMT Access Service -Agreement Mgmt Architecture Delivery -Settlement Mgmt -Wireless (GSM) Architecture REVENUE STREAM -Credit Mgmt - WiMax -Rate Mgmt -WiFi -Circuit (ss7) (billing architecture) -Change Mgmt -Satellite -Packet (IP) -Configuration/Provisioni -LTE/UMTS… -Streaming ng Mgmt Includes different types or categories of Authentication controls and issues • Verify that you are who you claim to be Each requires different skills and Authorization perspectives • What are you authorized to do The DAM© organizes and standardizes Accounting the names and approaches • Keep track of what you do (For billing, legal, fraud and regulatory purposes) Is the primary focus of Telecoms Fraud Different Business Models, Partnership managers when it comes to the Arrangements, Technology Combinations technological domains and Lines of Business will create different Assuring AAA is the foundation to the AAA risks and issues security of the network © 2011 Rob Mattison www.ra-academy.org 52 of 364
- 88. Revenue Assurance Foundations RAF102: Network Foundations AA-SDA-AAA Older, more established technologies Wireline tend to have better defined AAA profiles DSL But telecoms is about “new technologies” Cable and innovative business models WiMax WiFi (Site) This leaves it for the fraud officer to LMDS/MMDS survey , patrol and assure that AAA is: Leased Line • In Place Network Equipment • Working properly Connections/Portals to other carriers/partners/vendors Customer applies for service Credit Checks, identity verification • At point of sale • At backoffice Using the hardware serial • Issuance of Work Ticket I f W k Ti k t number as the authentication tool Network engineer does a physical inspection of location and does a physical installation The engineer work ticket is the legal verification of the identity of the customer (coupled with credit check, CAF etc.) Handset GSM – EIR Authentication SIM DSL/Cable – Assignment of IP Address Router based upon MAC Address Set Top Box GPRS – Assignment of PDP context Dongle based upon SIM / IMEI © 2011 Rob Mattison www.ra-academy.org 53 of 364
- 89. Revenue Assurance Foundations RAF102: Network Foundations AA-SDA-AAA function to authenticate each SIM card that attempts to connect to the GSM core network Once the authentication is successful, the HLR is allowed to manage the SIM and services described above. An encryption key is also generated that is subsequently used to encrypt all wireless communications (voice, SMS, etc.) between the mobile phone and the GSM core network. The Remote Access Dialup User Service (RADIUS) protocol improves network security by providing a mechanism for authenticating remote users connecting to the network. It does this by carrying authentication, authorization and configuration information between a Network Access Server (NAS) and a RADIUS server. Login/Password Security Breaches in integrity • Firewalls • Physical Breaches Switches Network Elements Controls C l Computers • Audits • Physical Inspection • Sniffers • Line Monitors • Audit Trails © 2011 Rob Mattison www.ra-academy.org 54 of 364
- 90. Revenue Assurance Foundations RAF102: Network Foundations AA-SDA-AAA A.Num Authorization table Mediation Filter for Valid A.Num Billing Reject Files HLR Login/Password associated with capacity, HLR to VLR Sequence authorization of services Update Vulnerability Enforced by: • Credit Risk • Radius Server • Roaming Risk • Diameter Server • Front end Application • Firewall / IP Blockage settings HLR Postpaid Voice, GPRS, SMS, MMS, WAP • CDR Radius Server Prepaid APN Access • Online, realtime decrement of IN WAP Server Application HYBRID Cases • When you don’t have one of these two Account management system or billing system For monthly fees Other kludges ---- a problem but common © 2011 Rob Mattison www.ra-academy.org 55 of 364
- 91. Revenue Assurance Foundations RAF102: Network Foundations History of Circuit History and State of the Art for History of Telecom Billing and Fraud Circuit Technology • 1. Invention of the Telephone • 2. First business model – coop opco • 3. 2nd Model – Central Exchange – Toll Ticket Model • 4. Strowager – Automated Switches – Flat Rate – Peg Count Billing Rob Mattison – Timed Billing The Revenue Assurance Academy – Pulse Billing © Copyright 2009 1 +1-847-426-2098 www.ra-academy.org © Copyright 2007 © Copyright 2009 - GRAPA Rob Mattison 2 History Continued The Central Office Model • Introduction of computers • Star network configuration – Class4/Class 5 • Professionalization of Switching • Modern Switches • Modern Switch Characteristics • What i Wh t is a Ttfil ? Wh named? Ttfile Why d? • How do you do Billing? • How do you do RA? • How do you do Fraud Management? © Copyright 2009 - GRAPA Rob Mattison 3 © Copyright 2009 - GRAPA Rob Mattison 4 Post Strowager • 1886 German scientist Heinrich Hertz calculated that electromagnetic waves could be broadcasted by a rapidly alternating current in a short • Flat Rate antenna. • Before 1892 Tesla had found the theoretical basis for radio communication • Counter and in 1893 he demonstrated radio energy crossing space. • Timer • 1892 First automatic telephone exchange invented by Almon B Strowger entered service in Indiana USA Indiana, • Pulse P l • 1894 British physicist Sir Oliver Lodge uses a device called the coherer (an electrical device whose function was based on a discovery made in 1890 by a French physicist, Édouard Branly) to detect the presence of radio waves and demonstrates that these waves could be used for signalling. © Copyright 2009 - GRAPA Rob Mattison 5 © Copyright 2009 - GRAPA Rob Mattison 6 © 2011 Rob Mattison www.ra-academy.org 56 of 364
- 92. Revenue Assurance Foundations RAF102: Network Foundations History of Circuit Enter Electronics Class 4 (TANDEM) Switches • Computer integration • Fiber Optic Integration Class 4 or Tandem switch is U.S. telephone company (telco) central office telephone exchange • CDR Architecture used for long distance communications in the Public Switched Telephone Network (PSTN) to interconnect telephone company offices. It was introduced in 1976 in Chicago to replace the 4a crossbar switch and the last of 145 in the ATT network was installed in 1999 in Atlanta. © Copyright 2009 - GRAPA Rob Mattison 7 © Copyright 2009 - GRAPA Rob Mattison 8 Class 5 (End Office) • a Class 5 switch or end-office is primarily Modern Circuit Switches used to terminate local calls, in other words connect to the customer (also known as the subscriber) ) © Copyright 2009 10 © Copyright 2009 - GRAPA Rob Mattison 9 © Copyright 2007 • Most the above were removed in the late • Ericcson – axe series 20th Century, mostly replaced in North • Hua Wei – M series America by DMS-100 and 5ESS switches • ZTE in the Bell operating territories and the p g GTD-5 EAX in the GTE operating areas. • Lucent L t Principal European products include • Nortel Siemens EWSD and Ericsson AXE • Alcatel telephone exchange . • Nokia © Copyright 2009 - GRAPA Rob Mattison 11 © Copyright 2009 - GRAPA Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 57 of 364
- 93. Revenue Assurance Foundations RAF102: Network Foundations History of Circuit Switch Subsytems - Nokia • TCS – Traffic Control Subsystem – Controls all switch activity • TSS – Trunk and Signaling System – Handles traffic between exchanges on the network. • IAS – Internet Access Subsystem • TCS – Traffic Control Subsystem • CHS – Charging Management Subsystem – Generates CDR s CDR’s • OMS – Operations and Maintenance Subsystem – Faults and statistics • SUS – Subscriber Services Subsystem • NMS – Network Management Subsystem – Manage EMS’s • ESS- Extended Switching Subsystem • RMS- Remote Measurement Subsystem • BGS- Business Group Subsystem • SES – Service Provisioning Subsystem • SSS- Subscriber Switching Subsystem – The main PSTN control system • SCS- Subscriber Control Subsystem © Copyright 2009 - GRAPA Rob Mattison 13 © 2011 Rob Mattison www.ra-academy.org 58 of 364
- 94. Revenue Assurance Foundations RAF102: Network Foundations Topology Topology Interconnect Local Wireline IP Backbone Wireless Rob Mattison The Revenue Assurance Academy © Copyright 2009 1 +1-847-426-2098 www.ra-academy.org © Copyright 2009 - GRAPA Rob Mattison 2 Categories of Devices Categories • Transport Devices • Gateway – Carry “payload” – A device that routes signals and translates • Consolidators protocols at the same time – Devices that Pull together a large number of • Softswitch signals – Any device that can be programmed to do • Routers routing (most modern switches are “soft” switches) – a buzzword – Route traffic with minimal Intelligence • Control Devices – Route , Bill, Govern Network © Copyright 2009 - GRAPA Rob Mattison 3 © Copyright 2009 - GRAPA Rob Mattison 4 Ring 4 Ring 4, with Synchronous Transport Criteria Modules-16 (STM-16) as building Denver blocks. D • A topology must be designed to assure that the network is “TIGHT” X C Oklahoma City Transport Switches BC1 BC2 CM1 CM2 • This means noone can get in or out without authorization D X Flagstaff C Dallas CE1 MT1 CE2 MT2 D D X X C C Legend Phoenix ET1 ET2 Houston DXC Location STM 16 Location © Copyright 2009 - GRAPA Rob Mattison 6 © 2011 Rob Mattison www.ra-academy.org 59 of 364
- 95. Revenue Assurance Foundations RAF102: Network Foundations Topology Types of Breach • Consolidators – Pull Multiple sources to the main backbone • Wireline – DLC • GSM – BSC • Entry Ports – Special – gates that allow vendors to access Circuit Switch network for special purpose Hooks DLC up To Backbone • Points of Exchange – Partnership Interfaces DLC – Trunkgroups Customer 1 Customer 3 – APN’s Customer 2 © Copyright 2009 - GRAPA Rob Mattison 7 UM Abis A EIR CDR Topologies SS7 BTS AUC BSC HLR BTS SIM Handset MSC PSTN BTS VLR GSM BSC BTS © Copyright © Copyright 2009 2009 - 10 Rob Mattison GRAPA Circuit Switch What Is a CDR? DLC •A Call Detail Record (CDR) is – a record created by a network element (device) generated in order to create an audit trail, official record, record and hard copy pertaining to a particular Circuit Switch network activity – the key data element for any telecommunications (AXE?) network activity DLC Circuit Switch – created by switches (usually) and is then used by Digital Loop all other operations associated with network Carrier activity (multi-line consolidation) © Copyright 2009 - GRAPA Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 60 of 364
- 96. Revenue Assurance Foundations RAF102: Network Foundations Topology T.CDR T.CDR Circuit Circuit b.num Switch b.num Switch DLC DLC a.num Circuit O.CDR a.num Circuit Switch Switch (AXE?) (AXE?) DLC Circuit DLC Circuit Switch Switch Digital Digital Loop Loop Carrier Carrier (multi-line consolidation) (multi-line consolidation) Circuit Wireless Difference b.num Switch DLC • Different way of getting to the customer – DLC and Home Phone vs Cell Phone and Antenna • Different security issues y a.num Circuit Switch O.CDR • Different service level management issues (AXE?) DLC Circuit Switch Digital Loop Carrier (multi-line consolidation) © Copyright 2009 - GRAPA Rob Mattison 16 What is interconnect? Carrier 1 POI Switch Local Wireless Wireline Carrier Carrier 1 - Ring Carrier 2 – Ring Carrier Long Distance Carrier Carrier 2 POI Switch © Copyright 2009 - GRAPA Rob Mattison 17 © Copyright 2009 - GRAPA Rob Mattison 18 © 2011 Rob Mattison www.ra-academy.org 61 of 364
- 97. Revenue Assurance Foundations RAF102: Network Foundations SS7 What is SS7? SS7 • Signaling System 7 • International standard – language, protocols, architecture to provide for integrated, “smart” networks smart 1/21/2011 © Copyright 2009 1 © Copyright 2007 © Copyright 2007 Rob Mattison 2 Why understand SS7? Before SS7 • SS7 commands define the way that calls are set up and • Network communication was only through tracked • In order to understand if a switch is generating the: the “phone line” itself – Right CDR • DTMF tones gave instructions to switches – At the right time – With accuracy and made calls • SS7 Commands are the commands that determine it all • The problem: • Critical for ss7 probe diagnosis, and for network integrity review – Highly inefficient • Especially critical for interconnect and network routing – Used upon too much capacity • Plays a big part in SMS, 3G and other “next generation” – Limited capabilities solutions © Copyright 2007 Rob Mattison 3 © Copyright 2007 Rob Mattison 4 What Does SS7 Do Dialects of SS7 • Provides a language that switches can use • BICC Bearer Independent Call Control protoco to communicate with each other • BISUP B-ISDN User Part • DUP Data User Part • Creates an “internal phone system” for the • ISUP ISDN User Part network to use • MAP Mobile Application Part • Allows for the integration of applications • MTP-2 Message Transfer Part Level 2 and databases into the network • MTP-3 Message Transfer Part Level 3 • Q2140 Recommendation Q.2140 • (i.e. intelligent networks) • SCCP Signalling Connection Control Part • TCAP Transaction Capabilities Application Part • TUP Telephone User Part © Copyright 2007 Rob Mattison 5 © Copyright 2007 Rob Mattison 6 © 2011 Rob Mattison www.ra-academy.org 62 of 364
- 98. Revenue Assurance Foundations RAF102: Network Foundations SS7 Key Concepts Media • Media / Method • SS7 Network is Typically an E1 dedicated • SS7 Components/Roles line – SCP, STP, SSP • Other variations are possible , especially • Addressing of Components – Point codes in modern times • Topology • The ISUP Protocol © Copyright 2007 Rob Mattison 7 © Copyright 2007 Rob Mattison 8 Topology Signaling Links • SS7 messages are exchanged between network elements • Networks are arranged in redundant pairs over 56 or 64 kilobit per second (kbps) bidirectional channels and rings called signaling links. • Signaling occurs out-of-band on dedicated channels rather • Multiple paths for security than in-band on voice channels. • Compared to in-band signaling, out-of-band signaling p g g g g • 40% rule provides: – Faster call setup times (compared to in-band signaling using multi- frequency (MF) signaling tones) – More efficient use of voice circuits – Support for Intelligent Network (IN) services which require signaling to network elements without voice trunks (e.g., database systems) – Improved control over fraudulent network usage © Copyright 2007 Rob Mattison 9 © Copyright 2007 Rob Mattison 10 SSP STP • SSPs are switches that originate, terminate, or tandem •Network traffic between signaling points may be routed via a packet calls. switch called an STP. • An SSP sends signaling messages to other SSPs to setup, manage, and release voice circuits required to complete a •An STP routes each incoming message to an outgoing signaling link call. based on routing information contained in the SS7 message. Because it acts as a network hub, an STP provides improved utilization of the • An SSP may also send a query message to a centralized SS7 network by eliminating the need f di t li k b t t k b li i ti th d for direct links between signaling i li database (an SCP) to determine how to route a call (e.g., a points. toll-free 1-800/888 call in North America). • An SCP sends a response to the originating SSP •An STP may perform global title translation, a procedure by which containing the routing number(s) associated with the dialed the destination signaling point is determined from digits present in the number. An alternate routing number may be used by the signaling message (e.g., the dialed 800 number, calling card number, or SSP if the primary number is busy or the call is mobile subscriber identification number). unanswered within a specified time. Actual call features vary from network to network and from service to service. •An STP can also act as a firewall to screen SS7 messages exchanged with other networks. © Copyright 2007 Rob Mattison 11 © Copyright 2007 Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 63 of 364
- 99. Revenue Assurance Foundations RAF102: Network Foundations SS7 Code Point Tables ISUP • Are the tables that define how traffic is routed within an SS7 network 1.ISUP is the most commonly used call control protocol in North America and is used to illustrate the general points. There are a number of other call control protocols and national variants, for example, TUP (Telephony • Each switch is identified by a code-point, User Part), IUP (Interconnect User Part - UK standard). and code-point tables direct how traffic code point should be routed from one switch to the next Example: ISUP signaling associated with a basic call © Copyright 2007 Rob Mattison 13 © Copyright 2007 Rob Mattison 14 IAM ACM • The destination SSP2 determines if it When a call is placed to an out-of-switch serves the called party. If so it generates a number, the originating SSP1 transmits an ringing tone at the called party's line and ISUP Initial Address Message (IAM) to reserve a trunk circuit from the originating SSP1 to the transmits an ISUP Address Complete destination SSP2. The IAM includes the Message (ACM) to the originating SSP1 originating and destination points codes, the via its local STP2. The ACM indicates that circuit identification code and the global title the remote end trunk circuit has been digits. The IAM is routed via the local STP1 of reserved. STP2 routes the ACM to SSP1 the originating SSP1 to the destination SSP2. which generates a ringing tone to the calling party's line and connects it to the trunk circuit. © Copyright 2007 Rob Mattison 15 © Copyright 2007 Rob Mattison 16 ANM REL • When the called party picks up the phone, • If the caller hangs up first SSP1 sends an SSP2 terminates the ringing tone and ISUP RELease message (REL) to release transmits an ISUP ANswer Message the trunk circuit between the 2 switches. ( (ANM) to SSP1 via STP2. STP2 routes the ) STP1 routes the REL to SSP2. Upon receiving the REL SSP2 disconnects the ANM to SSP1 which verifies that the circuit from the called party's line and calling party line is connected to the transmits an ISUP ReLease Complete reserved trunk and if so starts billing. message (RLC) to SSP1 to ack the release of the trunk circuit. When SSP1 receives the RLC it terminates billing. © Copyright 2007 Rob Mattison 17 © Copyright 2007 Rob Mattison 18 © 2011 Rob Mattison www.ra-academy.org 64 of 364
- 100. Revenue Assurance Foundations RAF102: Network Foundations SS7 SSP STP SSP RLC Handset Phone Dial IAM • If the called person hangs up first, SSP2 IAM sends a REL to SSP1 indicating the Ring release cause. When REL is received, ACM ACM Ringing SSP1 disconnects the circuit from the Ringing Tone caller's line and transmits an ISUP ANM ANM Answer ReLease Complete message (RLC) to SSP2. When SSP2 receives the RLC it Connect terminates and stops billing. Originating Terminating Switch Switch © Copyright 2007 Rob Mattison 19 Call Setup SSP STP SSP Interconnect Disconnect Release Release • Regulators set interconnect standards for Disconnect telcos in their jurisdiction Release • Interconnect within a country will comply with the national ISUP variance RLC RLC • International will require a “convention” Release between the carriers Originating Terminating Switch Switch © Copyright 2007 Rob Mattison 22 Call Release © 2011 Rob Mattison www.ra-academy.org 65 of 364
- 101. Revenue Assurance Foundations RAF102: Network Foundations How to make a CDR Customer Log into network Authenticate (EIR – Hardware) (AUC – SIM – onnet) (Roaming Routing Table / IMSI/Call to Host MSC for verification of roaming authorization with roaming partner) Authorize (what services are authorized and on what terms) Authorize (HLR – On Net – prepaid vs postpaid) Authorize (Roaming partner SS7) Authorization is stored in VLR (both cases) Black List of Stolen Phone Serial Numbers EIR EIR Encryption codes for SIMS AUC AUC HLR HLR Account Information (services authorized) Prepaid? Postpaid? Roaming? CAMEL? GPRS? VLR VLR Realtime Register of all PHONES ACTIVE on the switch NOW Switch Switch B.Num Routing Table Pointcodes for all Switches that t s o tcodes o Sw tc es t at this Parse Point Point- Billing switch can communicate with code Code B.Num Routing Table Parse Point- Billing Code Rules for Billing when this code Number is Called -------------------------------------- When to create a CDR What to place on the CDR How to handle Prepaid/Postpaid VLR Realtime Register of all PHONES ACTIVE on the switch NOW BTS Switch Pointcodes for the Home MSC for 1. Customer dials numbers BSC all Carriers we have a Roaming Partnership with 2. Number is received by MSC Handset 3. MSC checks authorization in VLR ---------- SIM Unique code for each country 4. Identify target switch y g IMSI (From IMSI) Roaming Routing Table Switch looks up b.num in routing table Country Code Carrier Code Point Code Unique code for carrier we have Using country code, prefix or other parse of the a roaming relationship with number Target switch Pointcode is identified Point Code for the Master MSC for this roaming partner © 2011 Rob Mattison www.ra-academy.org 66 of 364
- 102. Revenue Assurance Foundations RAF102: Network Foundations How to make a CDR SS7 – ISUP – IAM command is sent to target A Billing code is identified switch (addressed via pointcode) The billing code specifies: SS7 – ISUP – ANM is received Whether a call to this destination should SS7 – ISUP – ACM is received generate a CDR or not What f h format the C R should take (what fi ld h CDR h ld k h fields Circuit is opened between parties are filled in) Call is terminated Timing – when the CDR Should be opened, when SS7 – RLS, RLC are exchanged it should be closed Circuit is released How and when fields should be populated (what times, from where, under what conditions) Rounding (??) CDR Serial Number• A.Num • B.Num • VLR VLR Start Time • (TrunkGroup) • Service Type VLR Switch Switch • Prepaid/Postpaid Switch Volume (How big is TTFILE?) 5 min – 72 hours # of CDRs 1000 cdr – 100,000 CDR Time 10 MB – 100 GB © 2011 Rob Mattison www.ra-academy.org 67 of 364
- 103. Revenue Assurance Foundations RAF102: Network Foundations Broadcast THE BROADCAST BUSINESS MODEL Business Models Free “Network Broadcast” Classic Public Television / Radio Financing via Advertising Revenue Assurance at the Broadcast end The more access the Better Cable Similar to Network Broadcast Minimal Physical AAA in Legacy Model BROADCAST Upgrading now with DOCSIS IPStreaming Services VOD and Subscription to IP Stream ROH – Radio Over handset Model GSM/CDMA/WIMAX Models MAJOR ISSUES Government standards / censorship Purchase of frequency Intellectual Property Rights Protection Revenue assurance and marketing are tightly coupled l d Demographics = revenue CABLE – DETAILED VIEW HOW A CABLE PLANT WORKS AAA FOR CABLE BROADCAST Cable television systems traditionally have delivered entertainment Physical Provisioning video to consumers' homes—with the emergence of fiber-optic technology and the convergence of video, voice and data, many cable Set Top Box Security systems provide extended services, such as video-on-demand, voice- over-Internet Protocol, and high-speed Internet access. While the Difficult to protect at default level technical capabilities of cable systems have been enhanced and expanded to support these services, the physical structure of cable systems has evolved into a hybrid-fiber coax (HFC) structure. DOCSIS 3.0 addresses AAA capability The cable television HFC architecture consists of five major components: the headend; optical fiber; feeder cable; drop cable; and terminal equipment. © 2011 Rob Mattison www.ra-academy.org 68 of 364
- 104. Revenue Assurance Foundations RAF102: Network Foundations Broadcast In a modern HFC cable plant, the trunk cables and amplifiers are replaced by a single optical fiber. The fiber optics transmit RF energy as light reflecting down a glass fiber. This greatly reduces the noise and distortion in the cable plant because fiber uses no RF amplifiers whereas the trunk line needed an amplifier each half-mile or less. In the HFC architecture, a single fiber is run directly from the headend to an optical node in a neighborhood. p g The node converts the optical signal back to RF signals and the local neighborhood part of the cable plant distributes the RF signals the same as before. Nodes are spaced to serve a neighborhood with 500 to 1000 homes passed by the plant. Another significant benefit of the HFC architecture is that it enables the cable plant to reliably deliver signals that originate in customers homes back to the headend. This two-way capability enables a plethora of interactive audio, video and data services. RECEIVING AND TRANSMITTING CABLE SIGNALS: THE HEADEND Provisioning Program content is received and processed at the headend. A programmer usually transmits a television signal through the Billing air from a satellite, microwave, or local television antenna to the headend. Revenue Assurance Exposure A programmer may also send the content by a direct fiber link from the studio to the headend. The content is modulated onto an electromagnetic carrier (a radio wave) and becomes a radio frequency (RF) signal that is part of a frequency spectrum. At the headend each signal is assigned a unique channel frequency. Each unique signal occupies a unique portion of the spectrum. The combined signals, carrying content from all providers, are then transmitted through the cable network to a subscriber's home. SYSTEM ARCHITECTURE: THE TRUNK, THE FEEDER, THE DROP AND THE HFC EVOLUTION DOCSIS In the early days of cable television, trunk, feeder, and drop Data Over Cable Service Interface were the coaxial cables that carried the signal from the headend through a series of distribution points to the terminal Specification (DOCSIS) (often pronounced equipment in a subscriber's home. /ˈdɒksɪs/) is an international telecommunications Large trunk cables run through the center of town passing near all neighborhoods. Smaller feeder cables connect to the standard that permits the addition of high-speed trunk cable and branch off into individual neighborhoods. data transfer to an existing Cable TV (CATV) g ( ) Amplifiers are placed along b h the trunk and feeder cables A lifi l d l both h k df d bl to maintain adequate signal strength. system. It is employed by many cable television When a customer purchases cable services, the cable operator operators to provide Internet access (see cable runs a drop cable from a tap on a feeder cable into the subscriber's home where it is attached to terminal equipment. internet) over their existing hybrid fiber coaxial (HFC) infrastructure. © 2011 Rob Mattison www.ra-academy.org 69 of 364
- 105. Revenue Assurance Foundations RAF102: Network Foundations Broadcast LEGACY SYSTEM QAM Existing STB (Set Top Box) technology relies on stands for quadrature amplitude modulation, the the use of a dedicated channel to transmit control format by which digital cable channels are encoded and transmitted via cable television providers. messaging from the headend to each STB. QAM tuners can be likened to the cable equivalent of Conditional access (CA), system information (SI), an ATSC tuner which is required to receive over-the- electronic program guide (EPG) emergency alert (EPG), air (OTA) digital channels broadcast by local system (EAS) and other STB command and television stations; control messages are sent via a downstream many new cable-ready digital televisions support both of these standards. radio frequency (RF) channel that is separate Although QAM uses the same 6 MHz bandwidth as from the channels actually being watched— ATSC, it carries about twice the data (38.47 Mbp/s hence, the term out-of-band (OOB). @256QAM) due to the lack of error correction; A low bandwidth upstream reverse channel is however, this requires a significantly cleaner signal path, such as distribution through hybrid fiber-coax digital used for interactive messaging. cable.[ Hybrid Fiber/Coax CMTS A cable modem termination system is a piece of equipment typically located in a cable company's headend or hubsite, and used to provide high speed data services, such as cable internet or Voice over IP, to cable subscribers. , Provides many of the same functions provided by the DSLAM in a DSL system. Traditional Model DSG ARCHITECTURE CABLE – REVENUE ASSURANCE FUNCTIONS / ISSUES DSG leverages the existing infrastructure of digital 1. Provisioning video and DOCSIS networks to enable broadcast and 1. Customer identity information capture interactive services required for OOB messaging transport. 2. Credit check / Credit Policy The OOB messaging is meant to separate the 3. Inventory of services, provisioning for each quadrature amplitude modulation (QAM)-based (QAM) based 2. 2 QoS digital video transmission mechanism from the 1. Tracking of quality of service for each LOB security, access and feature complexity of advanced STB. 2. Billing adjustments DSG is not content-aware and it is this flexibility that 3. Vendor reconciliation makes DSG attractive. 3. Revenue Maps – Can be extensive DSG allows entire STB provisioning and management 4. Leakage Calculations systems that work in a system today to be reused with no modifications other than changing the physical transport. © 2011 Rob Mattison www.ra-academy.org 70 of 364
- 106. Revenue Assurance Foundations RAF102: Network Foundations Packet Network Operations – Packet Based Packet Based Architectures • Packet based technologies include: – IP / ATM • Under packet based, there is no “CIRCUIT”, you simply “chop up” the message and send it across the network • Packet based is more efficient – However Rob Mattison • There are huge issues with security, quality and integrity, since you cannot control the path/choices directly © Copyright 2009 GRAPA Rob Mattison 2 TOPOLOGY – THE INTERNET © Copyright 2009 GRAPA Rob Mattison 3 © Copyright 2009 GRAPA Rob Mattison 4 Peering IXP • Multiple ISPs interconnect at peering points or Internet exchange points (IXs), allowing routing of data • An Internet exchange point (IX or IXP) is a between each network, without charging one another physical infrastructure through which Internet for the data transmitted—data that would otherwise service providers (ISPs) exchange Internet have passed through a third upstream ISP, incurring traffic between their networks (autonomous charges from the upstream ISP. systems). • ISPs requiring no upstream and having only customers (end customers and/or peer ISPs) are • IXP reduce the portion of an ISP's traffic IXPs d h i f ISP' ffi called Tier 1 ISPs. which must be delivered via their upstream • Network hardware, software and specifications, as transit providers, thereby reducing the well as the expertise of network management average per-bit delivery cost of their service. personnel are important in ensuring that data follows Furthermore, the increased number of paths the most efficient route, and upstream connections learned through the IXP improves routing work reliably. • A tradeoff between cost and efficiency is possible. efficiency and fault-tolerance. © Copyright 2009 GRAPA Rob Mattison 5 © Copyright 2009 GRAPA Rob Mattison 6 © 2011 Rob Mattison www.ra-academy.org 71 of 364
- 107. Revenue Assurance Foundations RAF102: Network Foundations Packet Short name Name City Country DE-CIX Deutscher Commercial Internet Exchange [ Frankfurt am Main Germany Packet structure AMS-IX Amsterdam Internet Exchange Amsterdam Netherlands LINX London Internet Exchange London United Kingdom • An IP packet consists of a header section and a data section. London, Paris, Amsterdam, Frankfurt am Main, Munich, Zürich, Geneva, New York, United States, Europe, Asia - Equinix Equinix Exchange Washington D.C., Chicago, Dallas, Los Pacific Angeles, San Jose, Tokyo, Hong Kong, Singapore, Sydney JPNAP Japan Network Access Point Tokyo and Osaka Japan MSK-IX Moscow Internet Exchange Moscow Russia Stockholm, Malmö, Sundsvall, Netnod Netnod Internet Exchange in Sweden Sweden Gothenburg, Luleå UA-IX Ukrainian Internet Exchange Network Kiev Ukraine JPIX Japan Internet Exchange Tokyo Japan Neutral Internet eXchange of the NIX.CZ Prague Czech Republic Czech Republic Los Angeles, San Jose, Miami, Any2 Any2 Exchange Washington DC, Boston, Chicago, USA Reston, New York © Copyright 2009 GRAPA 7 © Copyright 2009 GRAPA Rob Mattison 8 IP Architecture • The Internet Protocol is the protocol that • When dealing with IP and other packet defines and enables internetworking at the based technologies, you get a Internet Layer and thus forms the Internet. TREMENDOUS decrease is cost because It uses a logical addressing system. g g y of : • IP addresses are not tied in any – Economies of scale permanent manner to hardware – Reduced cost of circuit identifications and, indeed, a network • Unfortunately this also means: interface can have multiple IP addresses. – Difficult to track and bill © Copyright 2009 GRAPA Rob Mattison 9 © Copyright 2009 GRAPA Rob Mattison 10 IP Applications Basic internet topology • Backbone (internal) IP Address IP Address • Transit (internal) • ISP (Internet Service Provider) – DialUp – DSL – Cable • VOIP • Wireless (WAP/GPRS/MMS) © Copyright 2009 GRAPA Rob Mattison 11 © Copyright 2009 GRAPA Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 72 of 364
- 108. Revenue Assurance Foundations RAF102: Network Foundations Packet Basic internet topology Basic internet topology IP Address IP Address IP Address IP Address Packetization © Copyright 2009 GRAPA Rob Mattison 13 © Copyright 2009 GRAPA Rob Mattison 14 Basic internet topology Internet Commands • HTTP IP Address IP Address • FTP • TELNET • MAIL © Copyright 2009 GRAPA Rob Mattison 15 © Copyright 2009 GRAPA Rob Mattison 16 HTTP • HEAD – Asks for the response identical to the one that would correspond to a GET request, but without the response body. This is useful for retrieving meta-information written in response headers, without having to transport the entire content. • GET – Requests a representation of the specified resource. By far the most common method used on the Web today. Should not be used for operations that cause side-effects (using it for actions in web applications is a common misuse). See 'safe methods' below. • POST – Submits data to be processed (e.g. from an HTML form) to the identified resource. The data is included in the body of the request. This may result in the creation of a new resource or the updates of existing resources or both both. • PUT – Uploads a representation of the specified resource. • DELETE – Deletes the specified resource. • TRACE – Echoes back the received request, so that a client can see what intermediate servers are adding or changing in the request. • OPTIONS – Returns the HTTP methods that the server supports for specified URI. This can be used to check the functionality of a web server by requesting '*' instead of a specific resource. • CONNECT – Converts the request connection to a transparent TCP/IP tunnel, usually to facilitate SSL-encrypted communication (HTTPS) through an unencrypted HTTP proxy.[1] • ` © Copyright 2009 GRAPA Rob Mattison 17 © 2011 Rob Mattison www.ra-academy.org 73 of 364
- 109. Revenue Assurance Foundations RAF102: Network Foundations VOIP-Skype-SIP SKYPE SERVER VOIP-SKYPE-SIP Rob is Online Rob is Online Rob Ip Address SKYPE SKYPE SERVER SERVER Rob Ip Address Brigitte Ip Address Rob is Online Rob Ip Address Rob is Online Rob Ip Address Brigitte is Online Brigitte IP Address Brigitte is Online Brigitte IP Address SKYPE SKYPE SERVER SERVER Brigitte Ip Address Rob Ip Address © 2011 Rob Mattison www.ra-academy.org 74 of 364
- 110. Revenue Assurance Foundations RAF102: Network Foundations VOIP-Skype-SIP OnlineNet Billing Server Skype to Skype All other consumer competitors have dropped out $30 For Skype to Skype ATT announce to bill per second SIP The protocol can be used for creating, modifying and terminating two-party The Session Initiation Protocol (SIP) is (unicast) or multiparty (multicast) sessions a signalling protocol, widely used for consisting of one or several media setting up and tearing down multimedia g p g streams. streams The modification can involve communication sessions such as voice changing addresses or ports, inviting more and video calls over the Internet participants, adding or deleting media streams, etc SIP is based on the request- response paradigm. SIP was originally designed by Henning The following sequence is a simple Schulzrinne (Columbia University) and Mark Handley (UCL) starting in 1996. The latest example of a call set-up procedure: version of the specification is RFC 3261[1] from 1. To initiate a session, the caller (or User the IETF SIP Working Group.[2] In November Agent Client) sends a request with the SIP 2000, SIP was accepted as a 3GPP signaling URL of the called party. protocol and permanent element of the IMS architecture for IP-based streaming multimedia services in cellular systems. © 2011 Rob Mattison www.ra-academy.org 75 of 364
- 111. Revenue Assurance Foundations RAF102: Network Foundations VOIP-Skype-SIP 2. If the client knows the location of the other party it can send the request * Designated capabilities refers to the functions that the user wants to directly to their IP address; if not, the client can send it to a locally configured SIP invoke. The client software might support videoconferencing, for example, network server. but the user may only want to use audio conferencing. Regardless, the user 3. The server will attempt to resolve the called user's location and send the can always add functions - such as videoconferencing, white-boarding, or a request to them. There are many ways it can do this, such as searching the DNS third user - by issuing another invite request to other users on the link. or accessing databases. Alternatively, the server may be a redirect server that may return the called user location to the calling client for it to try directly. During y g y y g SIP has two additional significant features. the course of locating a user, one SIP network server can proxy or redirect the The first is a stateful SIP server's ability to split or fork an incoming call so that call to additional servers until it arrives at one that definitely knows the IP several extensions can be rung at once. The first extension to answer takes the address where the called user can be found. call. This feature is handy if a user is working between two locations (a lab and 4. Once found, the request is sent to the user and then several options arise. In an office, for example), or where someone is ringing both a boss and their the simplest case, the user's telephony client receives the request, that is, the secretary. user's phone rings. If the user takes the call, the client responds to the invitation The second significant feature is SIP's unique ability to return different media with the designated capabilities* of the client software and a connection is types within a single session. For example, a customer could call a travel agent, established. If the user declines the call, the session can be redirected to a voice view video clips of possible holiday destinations, complete an on-line booking mail server or to another user. form and order currency - all within the same communication session. SIP Methods The commands that SIP uses are called methods. SIP defines the following methods: SIP Method Description INVITE - Invites a user to a call ACK - Used to facilitate reliable message exchange for INVITEs BYE - Terminates a connection between users or declines a call CANCEL - Terminates a request, or search, for a user OPTIONS - Solicits information about a server's capabilities REGISTER - Registers a user's current location INFO - Used for mid-session signaling © 2011 Rob Mattison www.ra-academy.org 76 of 364
- 112. Revenue Assurance Foundations RAF102: Network Foundations Fiber, DSL, Triple Play ADSL Fiber, DSL, Triple Play ADSL - Asymmetric Digital Subscriber Line Copper based High speed network access technology rapidly growing broadband access solution for home networking and small business systems uses multi-carrier modulation over unused frequency bands in q y phone lines DSL, Cable, Frame Relay, Burstable, Leased Line supports data rates up to 6144 Kbps downstream and 640 Kbps upstream ADSL Network Architecture Business Model Physical Provisioning Network ATU-R DSLAM ATM Switch Termination Billing Revenue A R Assurance I Issues Broadband network ATU-R - ADSL Transceiver Unit at remote end. DSLAM - Digital Subscriber Line Access Multiplexer Definición Burstable Definition Service received based on demand. Access dedicated to Internet with much wide high place of available band at all times for his use under demand. The traffic recovers in Megabytes from and towards the facilities of the client (CPE). A breadth of band E1 is delivered to the client and a minimum recovers, once exceeded this one, the recovers one client starts paying for use. There measures itself the traffic of entry and of exit in Megabytes (transmission and reception) The client is billed by the whole of the traffic that studies in one month calendar. © 2011 Rob Mattison www.ra-academy.org 77 of 364
- 113. Revenue Assurance Foundations RAF102: Network Foundations Fiber, DSL, Triple Play Billing Method Price per Megabyte The results of traffic studied per day are accumulated in a table where the following Rangos en Mbytes 0 a 19800 $ 8,000.00 fields appear: 19801 a 29600 $ 0.4847 Date. 29601 a 39550 $ 0.3755 0 3755 Mbytes of entry. 39551 a 79100 $ 0.2950 Piled up Mbytes of entry. 79101 a 153,250 $ 0.2307 Mbytes of exit. 153,251 a 211,000 $ 0.1800 211,001 en Adelante $ 0.1465 Piled up Mbytes of exit. Entire Mbytes per day. Entire piled up Mbytes Billing Method What is Frame Relay? (overview) Frame relay is a telecommunications service offering that carriers offer to large corporate customers. Frame relay provides the corporate customer with a dedicated high capacity line between two of their locations Customers can than use the dedicated line to Create low cost WAN’s Send data between locations (computer to computer) Provide dedicated video conferencing facilities between The figure shows a graphic representation of the traffic locations studied in Mbps during a space of 24horas Create dedicated phone connections between locations (PBX to PBX) - greatly reducing long distance expense for inter- company telephone traffic Up to 255 voice channels per PVC can be achieved High end capacity – DS3 CIR – Committed Information Rate Frame Relay is a packet-based technology Data or Voice traffic at one end of the system, is translated Measured in Kbps (Kilobytes per second) or into packets. Mbps (Megabytes per second) Packets are self-contained containers that hold a portion of the overall material that is to be transmitted. Specifies the transmission rate that will I.e. you can take a very large data file (1 megabyte) and break it always be available at a minimum to the available, minimum, down into 2 – 500 Kilobyte packets Ie. You can take a stream of voice traffic and break it down into customer for traffic between the two specified several different packets locations A subset of the entire package to be sent is then placed within a “Frame”. A frame provides the packet with identity, error checking and addressing information These packets are then sent over the network, and reassembled at the other end The addressing information is used by the network to route the traffic © 2011 Rob Mattison www.ra-academy.org 78 of 364
- 114. Revenue Assurance Foundations RAF102: Network Foundations Fiber, DSL, Triple Play San Francisco Los Angeles Frame Addressing Information 78382 93289 Frame PVC – Permanent Virtual Circuit Relay Switches The name given to identify the capacity and Houston routes purchased by the customer New DLCI – Digital Line Connection Identifier York The name give to identify the specific route within 29309 Frame the PVC that a particular packet is to be routed Addressed With DLCI 12533 – Chicago Atlanta Chicago 39292 12533 Customer Location (Houston) Frame Relay Port What is Triple Play? Frame Relay y Port FRAD (Frame Relay Customer Access Device) Location (Chicago) SAL (Special Access Line) Triple Play Implementations Cable DSL Wimax Satellite S t llit © 2011 Rob Mattison www.ra-academy.org 79 of 364
- 115. Revenue Assurance Foundations RAF102: Network Foundations WiFi and WiMAX WiFi and WiMAX Issues and Differences WIMAX AND WIFI WiFi IS WIFI Standards GoatTrail VOIP – UM Protocol Pervasive Data – Surfing City/National Networks Hybrid Offerings Ethernet over th air Eth t the i ATT / IPHONE4 Tmobile / IP-GSM Dual Band Phones WLAN Components The main components involved in a WLAN network are the Mobile Station, which could be any mobile device (E.g. a laptop, Personal Digital Assistant (PDA)), Wireless Access Point (AP) that performs the task of a wired hub – the AP acts as an entry point to access the target network- , Authentication server performing, authentication and granting access to the network via the AP 1/21/2011 5 1/21/2011 6 © 2011 Rob Mattison www.ra-academy.org 80 of 364
- 116. Revenue Assurance Foundations RAF102: Network Foundations WiFi and WiMAX Wired Equivalent Privacy Wi-Fi Protected Access The Wired Equivalent Privacy (WEP) key is used, between a Wi-Fi Protected Access (WPA) is an wireless client, and an AP, in order to encrypt data being enhancement over the vulnerable WEP sent from the client to the AP, and to decrypt the same data on the AP. encryption scheme. WEP keys are static keys, and are used as session keys, to Many flaws in WEP have been addressed in enable communication of the client and the AP. WPA. WPA If the client is not able to detect the AP’s WEP key, access to the network is blocked from the client. WPA provides authentication, key management As the name implies, WEP was developed to be as secure and encryption mechanisms, to secure a as that of wired networks that is why it is termed as wireless network equivalent. This fact does not hold, since many flaws have been detected in this encryption scheme. 1/21/2011 7 1/21/2011 8 WLAN Security Architecture Unlike GSM and UMTS networks, security in WLAN networks is not standardized. 1. implementation specific, and 2. depend on the technology deployed 1/21/2011 9 1/21/2011 10 Appliances CPE – Customer Premise Equipment MS – Mobile Devices NE – Network Elements ASN – RADIO SIDE ASN(RADIO) CSN (NETWORK) CSN – NETWORK SIDE © 2011 Rob Mattison www.ra-academy.org 81 of 364
- 117. Revenue Assurance Foundations RAF102: Network Foundations WiFi and WiMAX Customer Premise Equipment IDU ODU DHCP SERVER SI bts AAA SERVER Voice Gateway V i G t ASN GATEWAY BRAS SIP Telephone bts Network Gateway HOME ACCESS ASN(RADIO) SERVER CSN (NETWORK) Mobile Devices Network Elements – Back End (CSN) Mobile Dongle (MS) Gateways (Back End) VOIP Handset BRAS SIP Dual Mode (VOIP/GSM) V5.2 Gateway Trunk Gateway G y SIP Server Servers (Back End) Radius Diameter WIMAX Core Network Elements IP Core Router Fixed CPEs (indoor and outdoor) IP Aggregate Router Portable CPEs’ ASN Gateway HA – Home Agent Mobile CPEs Firewall Fi ll WiMAX PC C dCards DHCP Server WiMAX cards Integrated in laptops AAA Server Billing Server WiMAX Embedded in consumer electronic (CE) NMS/EMS Server devices such as Portable Media Players (PMPs), VOIP Servers digital cameras, gaming, and other CE devices. © 2011 Rob Mattison www.ra-academy.org 82 of 364
- 118. Revenue Assurance Foundations RAF102: Network Foundations WiFi and WiMAX ASN Architecture ASN Gateway Layer-2 connectivity to MS and transfers the control data messages to the MS coming from CSN. Control platform One or more BSs and one or more ASN Gateways (ASN-GWs). Network discovery and selection of the WiMAX subscriber’s preferred NSP Mobility management and Network entry with IEEE 802.16e-2005-based Layer-2 connectivity with WiMAX authentication MS Relay function for establishing Layer-3 connectivity (IP address allocation) with a Routing platform gp WiMAXMS, Radio Resource Management Subscriber policy enforcement Multicast and Broadcast Control ASN anchored mobility Switching platform Foreign Agent functionality for CSN anchored mobility Access point connectivity. ASN–CSN tunneling Paging and Location Management Accounting assistance Data forwarding Service flow authorization Quality of Service Admission Control and Policing ASN Gateway Functions ASN Gateway Capacity AAA Security Key Distribution A single ASN Gateway can support up to 1000 Policy Enforcement Extensible Authentication Protocol EAP Support WiMAX sites Authentication, Authorization and Accounting, over the air synchronization, (AAA) Service Internet Protocol security IPSec for control plane IP subscriber management, g , Messaging QoS policy enforcement and Mobile IP Foreign agent functionality IP traffic aggregation and EP (Enforcement Point) Mobility management Router This allows operators to have both fixed and mobile Fast Handovers Network Management/Simple Network applications, service quality and security, and Paging Controller (PC) substantially reduced CAPEX and OPEX models. Context Repository (CR) function QoS Support Management Protocol SNMP Support HA - Home Agent Mobile IP Internet users take advantage of wireless technology The Home Agent is responsible for routing data to when accessing the Internet. mobile nodes currently attached to a foreign Connections are lost whenever a user moves to a new network. network. Achieved through a tunnelling process in which a Mobile IP is the Internet standard for allowing users to CoA (Care-of-Address) C A (C f Add ) seamlessly roam among wireless networks. Used to deliver the data to the mobile node. Using Mobile IP, applications such as Internet telephony, This CoA may be associated with a FA (Foreign media streaming and virtual private networking can be Agent), in which case it is termed a FA CoA; or, it supported without service interruption when users move may be a co-located CoA meaning the mobile node across network boundaries. is allocated an IP address in the foreign network. © 2011 Rob Mattison www.ra-academy.org 83 of 364
- 119. Revenue Assurance Foundations RAF102: Network Foundations WiFi and WiMAX Firewall Firewall Techniques Part of a computer system or network that is designed to block Packet filter: unauthorized access while permitting authorized communications. Inspects each packet passing through the network and accepts or rejects it based on user-defined rules. It is a device or set of devices that is configured to permit or deny network transmissions based upon a set of rules and other criteria. Effective and mostly transparent to its users. Susceptible to IP spoofing. Firewalls can be implemented in either hardware or software, or a combination of both. Application gateway: Applies A l security mechanisms to specific applications, such as FTP and Telnet h f l h d l Firewalls are frequently used to prevent unauthorized Internet users servers. from accessing private networks connected to the Internet, especially Can impose a performance degradation. intranets. Circuit-level gateway: All messages entering or leaving the intranet pass through the Applies security mechanisms when a TCP or UDP connection is established. firewall, which inspects each message and blocks those that do not Once the connection has been made, packets can flow between the hosts without meet the specified security criteria. further checking. Proxy server: Intercepts all messages entering and leaving the network. The proxy server effectively hides the true network addresses. Proxies Network address translation A proxy device (running either on dedicated hardware or as Firewalls often have network address translation (NAT) functionality, software on a general-purpose machine) may act as a firewall by and the hosts protected behind a firewall commonly have addresses responding to input packets (connection requests, for example) in in the private address range, as defined in RFC 1918. the manner of an application, whilst blocking other packets. Firewalls often have such functionality to hide the true address of Proxies make tampering with an internal system from the external protected hosts. network more difficult and misuse of one internal system would Originally, the NAT function was developed to address the limited not necessarily cause a security breach exploitable from outside number of IPv4 routable addresses that could be used or assigned the firewall (as long as the application proxy remains intact and to companies or individuals as well as reduce both the amount and properly configured). therefore cost of obtaining enough public addresses for every Conversely, intruders may hijack a publicly-reachable system and computer in an organization. use it as a proxy for their own purposes; the proxy then Hiding the addresses of protected devices has become an masquerades as that system to other internal machines. increasingly important defense against network reconnaissance While use of internal address spaces enhances security, crackers may still employ methods such as IP spoofing to attempt to pass packets to a target network. DHCP Server The Dynamic Host Configuration Protocol (DHCP) is an In the absence of DHCP, hosts may be manually configured with an autoconfiguration protocol used on IP networks. IP address. Computers that are connected to IP networks must be Alternatively IPv6 hosts may use stateless address autoconfiguration configured before they can communicate with other to generate an IP address. IPv4 hosts may use link-local addressing to achieve limited local connectivity. computers on the network. In addition to IP addresses, DHCP also provides other configuration DHCP allows a computer to be configured automatically, ll t t b fi d t ti ll information, particularly the IP addresses of local caching DNS eliminating the need for intervention by a network resolvers. administrator. Hosts that do not use DHCP for address configuration may still use it It also provides a central database for keeping track of to obtain other configuration information. computers that have been connected to the network. There are two versions of DHCP, one for IPv4 and one for IPv6. This prevents two computers from accidentally being While both versions bear the same name and perform much the configured with the same IP address. same purpose, the details of the protocol for IPv4 and IPv6 are sufficiently different that they can be considered separate protocols © 2011 Rob Mattison www.ra-academy.org 84 of 364
- 120. Revenue Assurance Foundations RAF102: Network Foundations WiFi and WiMAX DHCP Ports DHCP four basic phases: DHCP uses the same two ports assigned by IANA IP discovery, for BOOTP: IP lease offer, UDP port 67 for sending data to the server, and IP request UDP port 68 for data to the client. p IP l lease acknowledgement. k l d t DHCP communications are connectionless in nature. AAA Server An AAA server is a server program that handles user requests for access to computer resources authentication, authorization, and Accounting services. A ti i The AAA server typically interacts with network access and gateway servers and with databases and directories containing user information. The current standard by which devices or applications communicate with an AAA server is the Remote Authentication Dial-In User Service (RADIUS). © 2011 Rob Mattison www.ra-academy.org 85 of 364
- 121. Revenue Assurance Foundations RAF102: Network Foundations GPRS and EVDO GPRS ? GPRS What is GPRS? – Enhancement to GSM network which provides for packet based delivery of services to customers – GPRS is “always on” unlike circuit based data products Major Rationale for GPRS General Packet Radio Service (GPRS) is a 1. Leverage existing GSM Infrastructure packet based mobile service available to 2. Migrate to UMTS users of a 2G / GSM network as well as network, 3. Optimize components, leverage in the 3g systems. architecture In the 2G systems, GPRS provides data 4. Gradual Migration rates from 56 up to 114 kbit/s GPRS System Architecture To Implement GPRS Add nodes to existing GSM network The GPRS is an enhancement over the GSM and – SGSN- serving GPRS support node adds some nodes in the network to provide the p Device to handle D i t h dl movement of packets across th t f k t the packet switched services. network These network nodes are called GSNs (GPRS Support Nodes) and are responsible for the routing – GGSN – gateway GPRS support node and delivery of the data packets to and form the MS Device to hookup GPRS network to X.25 and/or Internet and external packet data networks (PDN). The figure cloud shows the architecture of the GPRS system. Upgrade existing nodes to handle packet based traffic © 2011 Rob Mattison www.ra-academy.org 86 of 364
- 122. Revenue Assurance Foundations RAF102: Network Foundations GPRS and EVDO The serving GPRS support node (SGSN) SGSN – Service GPRS Support Node is responsible for routing the packet switched data to and from When a handset or computer wants to use the the mobile stations (MS) within its area of responsibility. GPRS services, it must first attach to the SGSN The main functions of SGSN are packet routing and transfer, mobile attach and detach procedure (Mobility Management When the SGSN receives a request, it makes sure q , (MM)), location management, assigning channels and time that the subscriber is valid slots (Logical Link Management (LLM)), authentication and – Authorization – verify subscriber info charging for calls. – Authentication – verify handset It stores the location information of the user (like the current location, current VLR) and user profile (like IMSI addresses Once the SGSN accepts attachment it keeps track of used in packet data networks) of registered users in its location the mobile device as it moves within the area register. The SGSN maintains control of the logical connection GGSN Functions The gateway GPRS support node (GGSN) The GGSN is similar to a combined gateway, firewall, and IP acts as interface between the GPRS backbone and the external packet data router. The GGSN handles interfaces to external IP networks, network (PDN). Internet Service Providers (ISPs), routers, Remote Access Dial- It converts the GPRS packet coming from the SGSN into proper packet data In User Service (RADIUS) servers, and other adjacent nodes. p protocol ( (PDP) format ( ) (i.e. X.25 or IP) before sending to the outside data ) g network. To the external networks, the GGSN appears as any gateway Similarly it converts the external PDP addresses to the GSM address of the that can route packets to the users within its domain. destination user. – It sends these packets to proper SGSN. The GGSN keeps track of the SGSN to which a specific MS is – For this purpose the GGSN stores the current SGSN address of the user and his connected and forwards packets accordingly. The SGSN and profile in its location register. GGSN can either be co-located in a compact GSN (CGSN) The GGSN also performs the authentication and charging functions. solution or placed far from each other and connected via the In general there may be a many to many relationship between the SGSN and GGSN. backbone. – However a service provider may have only one GGSN and few SGSNs due to cost constraints. A GGSN proved the interface to several SGSNs to the external PDN 2g Circuit (Voice) MSC Customer Packets SGSN GGSN (Data) © 2011 Rob Mattison www.ra-academy.org 87 of 364
- 123. Revenue Assurance Foundations RAF102: Network Foundations GPRS and EVDO Major Logical Components APN – Defines the service (backend) that will A GPRS connection is established by be managed and delivered reference to its Access Point Name (APN). – APN is defined and managed by GGSN The APN defines the services such as: – Establishes the point of connection between GPRS and the backend (internet service or – Wireless Application Protocol (WAP) access, application) – Short Message Service (SMS), PDP – Unique session identifier (an address – Multimedia Messaging Service (MMS), , a thread .. A point of continuity) – Internet communication services such as email – Defined by SGSN or GGSN, establishes the and World Wide Web access. logical unit of work to be managed APN Defines the service that will provide internet Access to the user. GPRS Attach Sequence Public Internet 1. The MS sends an Attach request message to the SGSN. apn1 Corporate C t SGSN GGSN apn 2 Intranet 2. The SGSN checks to determine whether it knows the SIM and tries to find its unique IMSI identification number. apn3 3.The SGSN then asks the MS for its IMSI. WAP Server 4. The SGSN performs an authentication of the MS. 5. If the MS currently is in a new location area, the Mobile Switching Center (MSC)/Visitors Location Registry (VLR) is updated. 6. The SGSN tells the MS about its assigned Temporary Location Link Identifier (TLLI). TLLI is used throughout the GPRS session as an identifier for the MS-SGSN logical link. MS Antenna/ Cell GPRS Attach - Cont The GSN 7. Once MS-SGSN link has been established, the mobile needs to get an IP address and other connection parameters. BTS-BSC-SGSN – This task is done through Packet Data Protocol (PDP) context activation. activation – The PDP context can be viewed as a software record that holds parameters that are relevant to a certain connection. – This information includes the protocols that are used (IP or X25), the IP address (if IP is used), the QoS profile, and information about whether to use compression. – The PDPcontext activation makes the GPRS mobile visible to the concerned GGSN, which makes external connections possible. © 2011 Rob Mattison www.ra-academy.org 88 of 364
- 124. Revenue Assurance Foundations RAF102: Network Foundations GPRS and EVDO The SGSN and GGSN register all possible Detailed volume of data info (kbytes or aspects of a GPRS user’s behavior and Mbytes) transferred by the user are collected generate billing information accordingly accordingly. by the SGSN. SGSN gathered in Charging Data Records (CDR) Detailed info about access to public data network (PDN) is collected by the GGSN. and delivered to a billing gateway. Billing models can integrate both, either or neither depending upon the strategy and architecture. Charging Gateway Interfaces (Radius/Diameter) Ga Ga Gd, an interface towards an MSC or GMSC with a connection to the SMS centre; SGSN GGSN Gs, Gs an interface to an MSC to enable common mobility management Ga, connection between SGSN, GGSN and the S-CDR G-CDR charging gateway function for the collection Billing of billing data; Gateway Gf, the optional interface to an EIR for an extra equipment check in GPRS. The charging can be based on the Prepaid Convert To time following parameters: Bill with SDP Volume. The amount of bytes transferred. Duration. The duration of a PDP context session. Time. Date, time of day, and day of the week (enabling lower tariffs at offpeak hours). ccn Final destination. The destination address (a subscriber could be REPORT # charged for access to the specific network, such as Packets SS7 through a proxy server). Location. The location of the subscriber. Perhaps hotspots with different tariffs could be a way to charge the end user. sgsn Another possibility is to have differentiated tariffs and to have lower CCN CDR costs in home areas compared to office areas and enabling home zone and office zone concepts. Quality of Service. Pay more for higher network priority. S-cdr Postpaid © 2011 Rob Mattison www.ra-academy.org 89 of 364
- 125. Revenue Assurance Foundations RAF102: Network Foundations GPRS and EVDO Precedence Class – Class of Service • High precedence: Service commitments will be maintained SMS. The SGSN will produce specific CDRs for SMS. ahead of all others, which Served IMSI/subscriber. Different subscriber classes (different means a premium can be charged for this service level. tariffs for frequent users, businesses, or private users). •NNormal precedence: Will fulfil the average requirements of the l d f lfil th i t f th Reverse charging. Th receiving subscriber i not charged f R h i The i i b ib is t h d for average subscriber. the received data; instead, the sending party is charged (or • Low precedence: Service commitments will be maintained perhaps a third party). after all higher precedence Free of charge. Specified data to be free of charge. levels have been fulfilled, which means that this service level Flat rate. A fixed monthly fee (we believe that this method will will be cheaper but will be the preferred way of charging because it will attract the carry the risk that packets may be deleted on route if mass market). necessary. Billing Models Charging Support Services One possible scheme is to sell subscriptions with a flat monthly API Based Billing – Billing at the application level rate, as long as the data usage does not exceed a certain limit. – This scenario is fairly simple to implement, and users should This functionality is now supported in the service network via understand it pretty easily although the notion of paying per packet the charging support service. This service provides a or kilobyte will sound strange to most people. convenient API where an application can signal when and how Another scenario is that an Application Service Provider (ASP) the user should be charged. This information is then compiled will buy capacity from the operator and will offer a service into Charging Data Records CDRs that the billing system of the Mobile System understands. toward its customers that includes free data usage. – This situation is only possible with those applications that are low on bandwidth usage (such as WAP applications). The operator can then chose whether this billing information will arrive to the subscriber on the same bill as the other 3G services or on a separate bill. He or she can also use the charging API to collect usage statistics and events. (Customized Application of Mobile network Enhanced Logic) A Charging can be a tricky issue set of ETSI standards for extending landline intelligent network One view is that applications should be (IN) telephony services to the data services of GSM, GPRS and UMTS mobile systems. CAMEL functions were added in commoditized phases; highlights are basic features such as call waiting and call forwarding in Phase 1, while Phase 2 added support for The other view is that the network should be prepaid calling and unstructured supplementary service data commoditized (see USSD). Phase 3 supports roaming; Phase 4 adds multimedia services, and Phase 5 provides seamless prepaid I-mode – charge by applications roaming. See CAP. © 2011 Rob Mattison www.ra-academy.org 90 of 364
- 126. Revenue Assurance Foundations RAF102: Network Foundations GPRS and EVDO Ssf – service switching function - The set of processes in an IN (Intelligent Network) that provide the communication path for interaction between a CCF (Call Control Function) and a SSF (Service Control Function). Currently Deployed Charging Models Charging for GPRS As part of the ‘logging on’ process the GGSN sends 1. CDR Based – Billing Gateway a charging ID’ (CID) to the SGSN. - Makes use of existing facility During the billing process batches of charging data - “Back into” Prepaid Back into records (CDR) are regularly sent from each network 2. Radius Server as Billing Manager node to a central billing centre. - Makes use of Radius Server Functionality The CID is used to merge the records from different - Limited capability/ performance constraints network nodes which apply to the same subscriber. 3. Diameter Server / SANS (Ericsson) - More integrated real time solution © 2011 Rob Mattison www.ra-academy.org 91 of 364
- 127. Revenue Assurance Foundations RAF102: Network Foundations GPRS and EVDO Special Billing Charging ID Postpaid Billing Pricing , Usage Radius Server Unique ID for Charging Event Default Information Or (From Source) (Tagged to all CDR’s/ Transactions) Other Service Aware Unit CID SGSN GGSN “Real” Postpaid Mediation Billing System System Special Billing Postmortem Pricing , Usage Postpaid Billing Radius Server Radius Server Prepaid Billing Information Or Radius Method Or (From Source) Other Service Aware Unit Other Service Aware Unit All CDR “Real” Prepaid p Mediation Billing System System Postpaid “Real” Special Billing Mediation “reverse charging” System System Application Prepaid Billing Postpaid Radius Server SASN “Radius” Method WAP_APN Name_CDR Or Configuration MEIP Server: Mobile enabler Internet Protocol Server SASN Other Service Aware Unit G_CDRs WAP Records INAP Billing SS7 GGSN Gateway (Resolve Name S_CDRs Prepaid DNS to IP)GGSN IP APN N Name Billing System SGSN Gr MAP Gs HLR MSC/VLR PCU BSC Attached mobile BTS © 2011 Rob Mattison www.ra-academy.org 92 of 364
- 128. Revenue Assurance Foundations RAF102: Network Foundations GPRS and EVDO Charging System(SDPs) CDRs CS1+ CCN CDR Prepaid CDRs SCP SASN Charging System(SDPs) If customer CCN In case prepaid Configuration have enough (check balance balance before allowing to access SCAP Request MEIP SASN GGSN (Resolve Name DNS to IP)GGSN IP APN Name SGSN Gs Gr MAP MSC/VLR HLR PCU BSC Attached mobile BTS © 2011 Rob Mattison www.ra-academy.org 93 of 364
- 129. Revenue Assurance Foundations RAF102: Network Foundations SMS / MMS History of SMS ► First came SS7 ► Then came excess network capacity SMS / MMS ► Then came SMS SMS Network Components What is SMS? ► Short message service (SMS) is a globally ► SMS applications are only as good as the accepted wireless service that enables the networks that transport them. Following are transmission of alphanumeric messages the four crucial nodes that enable the between mobile subscribers and external transmission of SMS messages across the systems such as electronic mail, paging and air interface. voice mail systems Cell Tower or Base Station MSC ►A base station is the cellular relay station ► A Mobile Switching Center (MSC) is the electronic field office of a cellular carrier, a computer-controlled switch for computer- (or cell tower) that a cell phone talks to managing automated network operations. An MSC when initiating or receiving a wireless call. automatically coordinates and controls call setup and routing between mobile phones in a given service area. The base station's primary responsibility is MSCs are connected to base stations by T1 landlines or y to transmit voice and data traffic between microwave channels, and by landlines to the Public Service Telephone Network (PSTN). mobile devices and a mobile switching ► MSCs maintain individual subscriber records, current status center (described next). All transmissions of subscribers, and information on call routing and billing in are managed by the base station, which two subscriber databases called the Home Location Register (HLR) and the Visitor Location Register (VLR). The acts as a kind of clearinghouse for wireless HLR contains subscriber profiles, while the VLR provides communications information relevant to roamers. © 2011 Rob Mattison www.ra-academy.org 94 of 364
- 130. Revenue Assurance Foundations RAF102: Network Foundations SMS / MMS SMSC GMSC ► SMS makes use of a Short Message Service ► SMSCs communicate with TCP/IP networks Center (SMSC), which acts as a store-and- store-and- via a Gateway Mobile Switching Center forward system for relaying short messages. (GMSC). A GMSC is an MSC capable of Similar to an MSC, the SMSC guarantees receiving short messages from an SMSC SMSC. delivery of text messages by the network. Messages are stored in the network until the The GMSC interrogates the Home Location destination cell phone becomes available, so Register (HLR) for subscriber routing a user can receive or transmit an SMS information and delivers the short message message at any time, whether a voice call is to the home MSC or roaming MSC of the in progress or not. destination mobile unit. Level 1 Traffic/Revenue Valid Prepaid Trend and Summary SMS Report for SMS (Nokia) (OLAP) Nokia Nokia Reconciliation Rating SMSC Valid Prepaid SMS (Ericsson) Ericsson Ericsson Reconciliation Rating Leakage (Invalid SMSC) Rated Suspended? SMSC CDR’s “Noise” Analysis Valid Postpaid SMS Total SMS Postpaid Per day Reconciliation Daily Consolidated (unverified) Detail CDR Repository MMS Specifications ► “Bestof breed” of many different messaging standards including SMS/EMS ► 2002 – First MMS Deployment MMS ► Movement to MMBox Multimedia Message Box To propagate storage and management of large collections of MM material Multi- Multi-media messaging ► Deployment Telenor – Norway / Vodafone D2/Westel Hungary – 2002 2003 over 100 operators © 2011 Rob Mattison www.ra-academy.org 95 of 364
- 131. Revenue Assurance Foundations RAF102: Network Foundations SMS / MMS Value Proposition for MMS Billing Models for MMS ► Multimedia Capabilities ► Flat Rate + Sending Party Pays: Receiver receives free Slideshows, sounds, pictures, text, video all Monthly flat fee charged delivered via wireless network Prepaid or postpaid allowed Roaming model is more expensive and complex (sender and ► Emailand phone number addressing receiver will both be charged) ► Media type based charging with sending party pays: ► Efficiency in transport Message sender pays based upon content (different price for text, picture, video) ► Charging Framework ► Subscription Based: ► Open standards, Industry momentum User pays a monthly fee and does not pay for send or receive. May set limit on activity for the month. Intercarrier Pricing Models Usage Scenarios ► Most common initially one flat rate with ► Person to person messaging sending party pays. Send to ► Successful for SMS, large files will disrupt ►Other MMS users ►Legacy phone users this model ►Internet users ► Value added services billed monthly on ► Content to Person Messaging subscription VAS (Value Added Service Provider) organization that offers additional MMS services VAS Architecture ► Provider sets up a server and sends to ► MMSE – MMS Environment subscribers Collection of MMS elements, under the control Activated via mms message requesting send of a single administration VAS subscriber must have agreement with In charge of providing the service to MMS carrier subscribers Revenue share will be defined Receiver and sender clients are attached vie the Scenarios MMSE ►Times MMS Alerts (news, weather) ►Event MMS Alerts (sports, alerts) © 2011 Rob Mattison www.ra-academy.org 96 of 364
- 132. Revenue Assurance Foundations RAF102: Network Foundations SMS / MMS MMS Client MMS Client Functions ► Aka (MMS User Agent in 3GPP speak) ► Management of messages, notifications and ► Software application whipped with the reports mobile handset which allows the ► Message composition composition, viewing, composition viewing sending retrieval of ►MMessage viewing i i MMS. ► Handling of a remote message box ► The unit generating and sending is the ► Configuration of user preferences and originator connectivity settings ► Vs Reciepient MMS Center MMSC Holds ► MMSC – key in the MMS architecture ► Profileinformation for all users ► Two Parts ► Provisioning processes MMS relay – routing of messages within and without MMSE Pre provisioning – MMS Server – in charge of temporarily storing messages Provisioning b P i i i by customer care t awaiting retrieval Auto provision on first message ► MMSC may contain Transcoding capabilities Bulk provisioning Functions to support legacy users ► MMSC are rated by message capacity, Databases for storing user profiles availability level, disaster recovery May also be Off Board (separate servers) MMSC Functions (interfaces) ► MM1 – Between MMSC and MMS Client ► MM4 – between 2 MMSC’s – Message submission/retrieval ► MM5 – between MMSC and other network ► MM2 – Between MMS server and MMS relay elements Ie HLR or Domain Name Server (DNS) May be hardwired/proprietary y /p p y ► MM6 –bbetween MMSC and user databases (ie d d b (i ► MM3 – Between MMSC and External Servers LDAP user repository) Email server, SMSC ► MM7 – between MMSC and external Value added Typically based upon ip based email protocols service May user SMTP Allows VAS to request MMSC services And to obtain message from MMS client © 2011 Rob Mattison www.ra-academy.org 97 of 364
- 133. Revenue Assurance Foundations RAF102: Network Foundations SMS / MMS ► MM8 – Between MMSC and postpaid billing system CDR processing (not standardized) ► MM9 – between MMSC and online billing system IN communication.. Not standardized ► MM10 – MMSC and a platform implementing a Message Service Control Function (MSCF) Routing Access rights Charging © 2011 Rob Mattison www.ra-academy.org 98 of 364
- 134. Revenue Assurance Foundations RAF102: Network Foundations 3G UMTS – IMS including 2g 2 5g 2 75g 2g, 2.5g, 2.75g, 3g, GPRS, HSPDA, IMS, UMTS, 3GPP,IETF and many more Translation Standards / Designations ITU – Old World Telco Association Standard What is it? Is it Is it 4g? 3G? IETF – The “Free Internet” Guys ITU-R Converged g Radio Speed “targets” and EDGE / UMTS / frequency use approaches UMTS HSDPA/ 3GPP – GSMA Guys HSPA+ ITU IMT2000 Official Designation (Behind 3g No 4g UMTS – Free lance GSM / CDMA guys others) (OFFICIAL) 3GPP LTE Most Active Currently Some Some ETSI - European Guys (Pushing for best of UMTS/IMS) IETF IMS Standards for Internet (IP Not Usually Some Based) telecommunications UMTS UMTS Coop forum promoting Some Some Forum combinations of network (MAP Part) and Radio Radio Migration LTE Key Characteristics UMTS Each generation yields better capacity Better frequency usage MIMO Better quality HSPA+ HSUPA Move to Upload/Download Speed Issues HSDPA © 2011 Rob Mattison www.ra-academy.org 99 of 364
- 135. Revenue Assurance Foundations RAF102: Network Foundations 3G EDGE EDGE/EGPRS is implemented as a bolt-on enhancement for 2G and 2.5G GSM and GPRS networks making it easier for existing networks, GSM carriers to upgrade to it. EDGE/EGPRS is a superset to GPRS and can function on any network with GPRS deployed on it, provided the carrier implements the necessary upgrade. Analog – No Cells RNC MSC SERVER U-SIM Node -B Media RNC Gateway U-SIM Node -B B GSN GGSN SERVER HSPA HSPA Migration High Speed Packet Access (HSPA) is a The two existing standards (HSDPA and collection of mobile telephony protocols that HSUPA) in the family provide increased extend and improve the performance of performance by using improved modulation existing UMTS protocols. Two standards, schemes and by refining the protocols by HSDPA and HSUPA, have been established which handsets and base stations communicate. These improvements lead to a and a further standard, HSPA+, is soon to be better utilization of the existing radio released. bandwidth provided by UMTS. © 2011 Rob Mattison www.ra-academy.org 100 of 364
- 136. Revenue Assurance Foundations RAF102: Network Foundations 3G LTE Characteristics UMTS All IP Architecture The UMTS Forum participates actively in the “Flat” Architecture (no silos / hierarchies) work of the ITU, ETSI, 3GPP and CEPT as E-UTRA E UTRA (Evolved UTRAN) well as other technical and commercial – Uses OFDMA for the downlink (tower to handset) organizations globally. Uses Single Carrier FDMA (SC-FDMA) for the uplink – It also contributes to the timely licensing and – Employs MIMO with up to four antennas per station. – Channel coding scheme for transport blocks is turbo coding deployment of mobile broadband globally – Uses a contention-free quadratic permutation polynomial through regular dialogue with regulators and (QPP) turbo code internal interleaver.[ responses to public consultations The UMTS network introduces new network elements that function as Functionality of MSC and SGSN specified by 3GPP: changes when going to UMTS In a GSM system Node B (base station) MSC handles all the circuit switched operations like connecting Radio Network Controller (RNC) A- and B-subscriber through the network. SGSN handles all th packet switched operations and t h dl ll the k t it h d ti d transfers f Media Gateway (MGW) all the data in the network. In UMTS Media gateway (MGW) take care of all data transfer in both circuit and packet switched networks. MSC and SGSN control MGW operations. Nodes are renamed to MSC-server and GSN-server. Data Standards Migration Voice Standards Migration IMS / IMS / LTE / LTE / WIMAX WIMAX UMTS UMTS GPRS GSM HSCSD © 2011 Rob Mattison www.ra-academy.org 101 of 364
- 137. Revenue Assurance Foundations RAF102: Network Foundations 3G HSCSD Prior to CSD, data transmission over mobile High-Speed Circuit-Switched Data phone systems was done by using a modem, (HSCSD), is an enhancement to Circuit either built into the phone or attached to it it. Switched Data the original data transmission Data, Such systems were limited by the quality of mechanism of the GSM mobile phone the audio signal to 2.4 kbit/s or less. system, four times faster than GSM, with data rates up to 384 kbit/s. 2g GPRS Circuit (Voice) Takes data traffic “offline” MSC Utilizes a separate architecture and infrastructure (CSD uses existing RADIO and Customer CIRCUIT infrastructure) Packets SGSN GGSN (Data) UMTS UMTS Universal Mobile Telecommunications Is a truly “universal” standard, integrating System (UMTS) is one of the third- wireless, wireline, wifi, wimax and other generation (3G) cell phone technologies technologies, technologies under a single operational which is also being developed into a 4G architecture. technology. Currently, the most common form of UMTS uses W-CDMA as the underlying air interface. It is standardized by the 3GPP, and is the European answer to the ITU IMT-2000 requirements for 3G cellular radio systems. © 2011 Rob Mattison www.ra-academy.org 102 of 364
- 138. Revenue Assurance Foundations RAF102: Network Foundations 3G Migrating from GPRS to UMTS 2.5 G From GPRS network, the following network elements can be reused: – Home location register (HLR) Migration path from 2 to 3G – Visitor location register (VLR) The term second and a half generation is used to – Equipment identity register (EIR) describe 2G-systems that have implemented a y p – Mobile switching centre ( g (MSC) ( ) (vendor dependent) p ) packet switched domain in addition to the circuit – Authentication centre (AUC) switched domain. It does not necessarily provide – Serving GPRS Support Node (SGSN) (vendor dependent) faster services because bundling of timeslots is used – Gateway GPRS Support Node (GGSN) for circuit switched data services (HSCSD) as well. From Global Service for Mobile (GSM) communication radio network, the following elements cannot be reused While the terms 2G and 3G are officially defined, – Base station controller (BSC) 2.5G is not. It was invented for marketing purposes – Base transceiver station (BTS) only. – They can remain in the network and be used in dual network operation where 2G and 3G networks co-exist while network migration and new 3G terminals become available for use in the network. New Names UMTS – Hardware Upgrades SIM = USIM (UMTS – SIM) The UMTS network introduces new network HLR = HSS (Home Subscriber Server) elements that function as specified by 3GPP: (optional) – Node (base station) N d B (b t ti ) – Radio Network Controller (RNC) – Media Gateway (MGW) 3g Functional Changes The functionality of MSC and SGSN changes when going to Circuit (Voice) MSC UMTS. – In a GSM system the MSC handles all the circuit switched operations like connecting A- and B-subscriber through the A B subscriber Media network. Customer Gateway – SGSN handles all the packet switched operations and transfers all the data in the network. Packets In UMTS the Media gateway (MGW) takes care of all data (Data) transfer in both circuit and packet switched networks. SGSN GGSN MSC and SGSN control MGW operations. The nodes are renamed to MSC-server and GSN-server. © 2011 Rob Mattison www.ra-academy.org 103 of 364
- 139. Revenue Assurance Foundations RAF102: Network Foundations 3G Additional Vocabulary Media Gateway The Media Gateway connects different types of digital media Media Gateway stream together to create an end-to-end path for the media Softswitch (voice and data) in the call. It may have interfaces to connect to traditional PSTN networks like DS1 or DS3 ports (E1 or STM1 ISUP in the case of non-US networks), it may have interfaces to connect to ATM and IP networks and in the modern system will have Ethernet interfaces to connect VoIP calls. The call agent will instruct the media gateway to connect media streams between these interfaces to connect the call - all transparently to the end-users. Media Gateway Connections Looking towards the end users from the IMS is an architectural framework created to switch, the Media Gateway may be provide a standards-based approach to connected to several access devices devices. multimedia applications across multiple These access devices can range from : networks. The IMS standard relies principally – Analog Telephone Adaptors (ATA) which provide on Session Initiation Protocol (SIP) to offer just one RJ11 telephone jack to an session control for these multimedia – Integrated Access Device (IAD) or applications - the same protocol seen as the – PBX which may provide several hundred standard of choice for VoIP. telephone connections. MGC (Controller) Media Gateways are controlled by a Media Gateway IMS was originally designed for third-generation Controller which provides the call control and mobile phones, but it has already been extended signaling functionality. to handle access from WiFi networks, and is Communication between Media Gateways and Call continuing contin ing to be extended into an access e tended access- Agents is achieved by means of protocols H.248 or independent platform for service delivery, SIP. including broadband fixed-line access. – VoIP Media Gateways perform the conversion between TDM voice to Voice over Internet Protocol (VoIP). It promises to provide seamless roaming – Mobile access Media Gateways connect the radio access between mobile, public WiFi and private networks of a public land mobile network PLMN to a Next networks for a wide range of services and Generation Core Network. devices © 2011 Rob Mattison www.ra-academy.org 104 of 364
- 140. Revenue Assurance Foundations RAF102: Network Foundations 3G Application Plane Control Plane The application plane provides an infrastructure The control plane sits between the for the provision and management of services, and defines standard interfaces to common application and transport planes. functionality including configuration storage, f nctionalit incl ding config ration storage It routes the call signaling, tells the transport identity management, user status (such as presence and location), which is held by the plane what traffic to allow, and generates – Home Subscriber Server (HSS) billing information for the use of the network. – billing services, provided by a Charging Gateway Function (CGF) – control of voice and video calls and messaging, provided by the control plane CSCF Control Plane At the core of this plane is the Call Session Control This distributed architecture provides an extremely Function (CSCF), which comprises the following flexible and scalable solution. For example, any of functions. the CSCF functions can generate billing information – The Proxy-CSCF (P CSCF) is the first point of contact for Proxy CSCF (P-CSCF) for each operation. operation users with the IMS responsible for security of the messages between the network and the The Control Plane also controls User Plane traffic user and allocating resources for the media flows. through the Resource and Admission Control – The Interrogating-CSCF (I-CSCF) is the first point of contact Subsystem (RACS). This consists of the Policy from peered networks. Decision Function (PDF), which implements local responsible for querying the HSS to determine the S-CSCF for a user and may also hide the operator's topology from peer networks policy on resource usage, for example to prevent (Topology Hiding Inter-network Gateway, or THIG). overload of particular access links, and Access-RAC – The Serving-CSCF (S-CSCF) is the central brain. Function (A-RACF), which controls QoS within the responsible for processing registrations to record the location of each user, user authentication, and call processing (including routing of access network. calls to applications). The operation of the S-CSCF is controlled by policy stored in the HSS. User Plane IMS Implementations The User plane provides a core QoS-enabled IPv6 network with access from User Equipment (UE) over mobile, WiFi and broadband More “embedded” into other standards that networks. This infrastructure is designed to provide a wide range of IP multimedia server-based and P2P services. actualized Access into the core network is through Border Gateways (GGSN/PDG/BAS). These enforce policy provided by the IMS core, This defines the “bleeding edge” of new controlling traffic flows between the access and core networks. Within the User Plane technology expansion the Interconnect Border Control Function (I-BCF) controls transport level security and tells the RACS what resources are required for a call Femtocell controversies, integration of Wi-FI the I-BGF, A-BGF Border Gateway Functions provide media relay for hiding endpoint addresses with managed pinholes to prevent and PSTN (GAN) and others are where the bandwidth theft, and implement NAPT and NAT/Firewall traversal for media flows IMS issues are being operationalized © 2011 Rob Mattison www.ra-academy.org 105 of 364
- 141. Revenue Assurance Foundations RAF102: Network Foundations 3G Major Areas to be anticipated Case: Migrate to UMTS Migration to IMS (all SIP) Vulnerability – Conversion from MSC to MGW/MSC- Server creates additional risk: Migration from GSM to UMTS (MSC to – Loss of transactions risk MGW) – Loss of assure-ability Migration from HLR to HSS Nature of the problem – Converting to MGW architecture eliminates our “double GPRS (already covered) safe” CDR strategy. We now have only one point for all CDR generation. – Converting to MGW architecture replaces proven architecture and method (SS7/C7) with unproven unstable SIP Risk Profile – Voice Responses – Change Management Risk/Cost Risk Considerations / Specifics RA must be included in network migration planning Area (Y/N) Steps include: Billing Y 1. CDR Integrity – Development of new “revenue maps” for each line of business CDR Transport effected Architecture 2. – Development of “test plan” to assure the testing and verification of Network Y 1. Topology Violation the integrity of new equipment 2. Completeness of CDR Capture – Pre and Post Cutover Revenue Stream Tests Subsidy N n/a – Verification of CDR’s at Mediation Market Y 1. Does the new architecture work? – Development of “controls” for the assurance of these new sources 2. Service levels, service failures, customer service of traffic responses and reporting, Alarms for failures in – Assurance of pre and post paid billing for all lines of business the field (SMS, MMS, WAP, GPRS, All types of Voice and VAS) Sales N n/a Partner N n/a Migration Controls Risks User Acceptance Testing by RA Large losses in revenue due to inability to – QoS for each LOB track and assure – Billing for Billi f each LOB h If a “class” of traffic is lost during conversion, – Service Level Assurance for each LOB no one will know to look for it Service Failure Reports and Alarms Risk to market perception if services fail – Track for actual “field problems” without timely response – Capture and monitor risk – Establish alarm responses for problems © 2011 Rob Mattison www.ra-academy.org 106 of 364
- 142. Revenue Assurance Foundations RAF102: Network Foundations 3G Case: Migrate HLR to HSS Risk Profile – Voice Vulnerability – Migration to HSS institutes a radically Risk/Cost Risk Considerations / Specifics Area (Y/N) different AAA (Authentication, Authorization and Billing Y 1. CDR Integrity Accounting) sequence Network Security Architecture 2. – How are you sure that AAA is working? Network N n/a Nature of the problem Subsidy N n/a – Existing (well tested and established) HLR mechanisms (IN- SS7/C7) are replaced by SIP based calls to a different kind Market N n/a of component Sales N n/a – AAA is the core foundation for billing integrity if AAA fails then all Billing Integrity Fails. Partner N n/a Case: Migrate to SIP Based Responses – Change Management Components Vulnerability – Network engineers will begin to “bolt on” new RA should develop test plans for verification functions, gateways and capabilities. The existing Network of HSS Functionality Engineering Structure – forces new components to be automatically “integrated” into the security and integrity Controls instituted to detect “failures” and structure. t t Conversion to the SIP based approach makes it easy to ‘skip’ responses assurance and controls Translation – IMS is a “FLAT” – Peer to Peer structure while traditional Telco is “hierarchical”. Peer-to-peer integration will require a MUCH HIGHER LEVEL OF ASSURANCE to guarantee financial integrity An unsecured node will jeopardize the ENTIRE ENVIRONMENT not just the area it is focused on. Risk Profile – Upgrade to IMS Process Risk/Cost Risk Considerations / Specifics 1. Institute Firm Change-Management and RA sign- Area (Y/N) off on all Component Replacement or Addition Billing Y 1. Transaction Integrity Architecture 2. CDR Transport 2. 2 RA Checklist to Include review forensics review, forensics, 3. New Revenue Streams must be secured, assessment and recommendations for : assured and billed 1. Billing Architecture Network Y 1. Topology Violation / Security 2. New Product/Service 2. Completeness of CDR Capture n/a 3. New Technology Subsidy N 4. New Partner Market Y 1. Does the new architecture work? 2. Service levels, service failures, customer service 5. Market responses and reporting, Alarms for failures in the field Sales N n/a © 2011 Rob Mattison www.ra-academy.org 107 of 364
- 143. Revenue Assurance Foundations RAF102: Network Foundations 3G Typical Controls – Typical Controls – Billing Assurance Architecture Compliance User Acceptance Testing BAAC – Postpaid User Acceptance Testing CDR Collection Points – Operational and Tested – Billing verification CDR Integrity Verification – All traffic captured and reported Mediation Verification – Assurance verification A ifi i – Transport, I/O, FSEC Postpaid Billing Verification – Network capabilities – Rates, Volumes, Treatment, Presentation – Adjustments , Refunds Processing – User Usability Testing – Prepaid Traffic (all activity accurately managed by IN) – Verification of marketing claims/education vs Rating capability / actuality Channel Acct Management Typical Controls – Marketing Revenue Assurance Development of Marketing Tracking Reports – Report HC, Revenue, Usage, Loyalty BY CUSTOMER – Set and Operationalize alarms for: Network Traffic (Hi/Low) Revenue (Hi/Low) Headcount (Hi/Low) Postpaid Subsidy Uptake (Hi/Low) © 2011 Rob Mattison www.ra-academy.org 108 of 364
- 144. Revenue Assurance Foundations RAF102: Network Foundations Femtocells What is a femtocell? A femtocell is a wireless device utilized to Femtocells provide a “local” BTS/BSC anywhere that customer wants to place it What does a femtocell do? Case for Femtocells Basically, it allows anyone to place a very It is estimated that roughly half of cellular small, limited capacity GSM/3G – Mini-Tower, calls are made from inside a home, and many anywhere that they want to. users complain of poor reception Low cost per unit (lower than BTS/BSC costs) Provides “extended reach” for GSM Carriers Increases mobility and pervasiveness How does it work? Overview? You get the femtocell Unit You plug it into any internet broadband connection (DSL, CABLE) You Y can now make GSM/3G calls with the k ll ith th antenna in your house/office © 2011 Rob Mattison www.ra-academy.org 109 of 364
- 145. Revenue Assurance Foundations RAF102: Network Foundations Femtocells Iub The Iu-b Approach Create the Femtocell as a Node-B. While there is temptation to re-use the existing approach for RNC- Node b interface, the Iu-b protocol has a number of drawbacks as the basis for a femtocell integration architecture. Just like any node-b is connected back to an RNC which is then in turn is connected to the core network Timing and Synchronization For RNC – Node b communication, the Iu-b protocol is run over a private IP or dedicated ATM link to ensure The femtocell routers can be treated like individual node-bs and consistent, managed performance connect to RNCs. Supporting Iu-b over the public internet requires a more robust and tolerant implementation of Iu-b to overcome potential pack loss, delay and jitter. Although the Iub interface (base station to RNC) is standardised, Mass Scalability the reality is most implementations are proprietary. RNCs are designed to handle hundreds of high-usage Node Bs, not millions of low-usage femtocell access points. Treating each femtocell as a Node B interfaced to the RNC is cost prohibitive. Even if many femtocells can be aggregated to appear as a single Node B, RNCs have the wrong cost structure and scalability to serve as the access Most available RNC solutions are geared towards Macro/Micro interface to the mobile network. type of deployments. They are built in order to support relatively small number of cells Service Security with a huge number of subscribers in each cell. Running the Iu-b interface over the Internet requires a new security layer to protect the RNC and mobile network from They don't scale very well to support Femto cell deployments Internet attacks. There are no defined mechanisms for controlling access to a femtocell-based service. Both femtocells and handsets with almost as many cells as there are subscribers, and a handful accessing service through those cells need to be properly authenticated and individually authorized for access. of subscribers per cell. Leveraging UMA for Femtocell UMA Integration into Core Networks UMA was originally conceived to support dual mode cellular/WiFi-over-Internet type of connectivity. The 3GPP UMA standard provides a standard, scalable and cost- When the mobile is detected indoors within the range of pre- effective method for end-user devices to access mobile network determined WiFi coverage, a UMA concentrator does the core services over any IP-based access network, including the network negotiation on behalf of the mobile, e.g. registering, and Internet. updating location ... etcetc. It is thought that a similar procedure can be used for femto cells. As is often the case with a new standard technology, innovative When the mobile is detected within the coverage of a femto cell, companies learn to apply it in new and innovative ways. UMA kind of hand shaking takes place to ensure that: Recently, it has been demonstrated that UMA can address the 1. the mobile is allowed to access the network at this particular core network integration challenge of femtocell-based service by femto cell, providing a standard, scalable, IP-based interface into mobile 2. the traffic between the mobile and the core network is core networks. forwarded accordingly. © 2011 Rob Mattison www.ra-academy.org 110 of 364
- 146. Revenue Assurance Foundations RAF102: Network Foundations Femtocells SIP / IMS Approach The SIP switch would need to support UMTS Visitor Location Registry (VLR) functionality to route calls and it would also have to communicate subscriber-activated supplementary services such as Call Forward All The idea of using SIP technology for integrating femtocell access points into the Calls to the UMTS Home Location Register (HLR) so they will not be de-activated. As a result, using the mobile network is appealing on the surface because it is the foundation of IP SIP protocol to aggregate femtocells leads not to a new IMS core but to the purchase of an MSC dressed Multimedia Subsystem (IMS) technology. However, the SIP aggregation in SIP clothing. solution being promoted today for femtocells bears little resemblance to a true Another issue with a SIP-based femtocell implementation is that it lacks feature transparency. The femtocell IMS architecture. must translate every UMTS call-control procedure into an equivalent SIP procedure. This leads to a number of problems: In this case SIP is used as the protocol between the mobile core network and the case, The femtocells control the handsets, not the MSCs. Therefore, the femtocells must replicate every regular and SIP client on the femtocell device. But in the mobile core, a new SIP-enabled supplementary service normally managed in the switch. Beyond the technical complexities, control of Mobile Switching Center (MSC) is required to operate the translation from SIP each service would not likely be the identical to that of MSCs, consequently the subscribers' experience may change as they moved in or out of the house. into existing network interfaces. In fact, the solution has more similarities to Each new feature for the mobile network must be supported in both the MSC and femtocells. conventional UMTS core network functionality than to a true IMS Network-based features such as ringback tones must be implemented on the SIP MSC, and some may also implementation. required the SIP MSC to support Customized Applications for Mobile Network Enhanced Logic (CAMEL). None of the advantages of the SIP service control model extend to the UEs, which remain standard UMTS devices. And there is an additional dependency for each service: the femtocell SIP to UMTS service This new SIP-enabled MSC needs to support many of the existing UMTS MSC mapping function. functions and interfaces to, for example, provide a single phone number At the other end of the session, the SIP MCS must stitch together SIP control with UMTS service controls for (MSISDN) for each handset, offer a unified set of supplementary services, and calls to other mobiles and to the PSTN. support femtocell-macro cell handover. Revenue Assurance Issues – Femtocells Risk/Cost Options What are the risks/costs associated with Billing Pricing/Margin – will it be profitable? Femtocell Implementation that are: Billing Accuracy (BAA) (Billing and Assurance Architecture) Unique Billing Compliance – Does the billing model comply with Specific regulatory requirements Billing Assure-ability (BAA) – Can you verify it? Significant Network Service Level Assurance (can it be delivered reliably) Service Level Assurance (can service failure be detected, reported and managed ((Refund, Regulatory Reporting) Network Capacity Impact / Planning Risk/Cost Options Risk/Cost Options Marketing Subsidy Market Impacts and Risks (Headcount, Loyalty, Bundle Assurance (Subsidized Handsets, Brand Equity, Revenue) Modems , PCs) **** Usability Assurance – Is the customer being Margins, Accounting, Assurance informed and educated properly to understand Partner – Provider of Equipment / Broadband and use the product? Provider Cannibalization Impact? Backend “content” or “service” partnerships Loss of Quality Impact? Risks (failure of their service, intentional sabotage?) Sales Billing Margins Assurance of special channel arrangements, commissions etc. Delivery Costs/Settlement Margin, Accuracy and Assurance (Fraud and Loss Risks) © 2011 Rob Mattison www.ra-academy.org 111 of 364
- 147. Revenue Assurance Foundations RAF102: Network Foundations Femtocells Process Process 1. Develop an accurate “revenue map” identifying the Create “sales map” and “service delivery revenue streams for each revenue flow. map” and perform exchange analysis / • Includes each partner, (APN) and service group forensics around each of these vulnerabilities • a version of “CONTENT ASSURANCE) 2. Identify all risk-domains that apply Create appropriate controls - Relevant, Significant, Assignable 3. For each initiate a forensics process which identifies the key ingredients of a full “model” 4. Verify and quantify each risk 5. Create complementary “controls” for each Typical Controls – Typical Controls – Billing Assurance Architecture User Acceptance Testing Compliance BAAC Postpaid User Acceptance Testing CDR Collection Points – Operational and Tested Billing verification CDR Integrity Verification – All traffic captured and reported Mediation Verification Assurance verification Transport, I/O, FSEC Postpaid Billing Verification Network capabilities Rates, Volumes, Treatment, Presentation Adjustments , Refunds Processing User Usability Testing Prepaid Verification of marketing claims/education vs Traffic (all activity accurately managed by IN) Rating capability / actuality Channel Acct Management Typical Controls – Marketing Revenue Assurance Development of Marketing Tracking Reports Report HC, Revenue, Usage, Loyalty BY CUSTOMER Set and Operationalize alarms for: Network Traffic (Hi/Low) Revenue (Hi/Low) Headcount (Hi/Low) Postpaid Subsidy Uptake (Hi/Low) © 2011 Rob Mattison www.ra-academy.org 112 of 364
- 148. Revenue Assurance Foundations RAF103: Billing Foundations Billing Models Background Billing is the heart of all revenues Billing : Systems, Models and Billing often reveals a “symptom” that has causality Approaches somewhere else in the environment While RA is not billing, billing and RA are strongly tied. Historically Major Billing Approaches Original RA departments were an extension of billing The BOM was the RA king The Wireline World Postpaid (POTS) Billing In the modern telco, the BOM no longer exists This vacuum has created the need for RA The Wireless World Prepaid Convergent (GSM/CDMA) Billing Billing The Internet World Radius/ (AOL/Compusere, GPRS, DSL, Cable, WIMAX, WIFI) Diameter Billing Architecture Issues Rating Accuracy How are rates kept How are rates applied How to assure the process © 2011 Rob Mattison www.ra-academy.org 113 of 364
- 149. Revenue Assurance Foundations RAF103: Billing Foundations Billing Models Credit Risk Management Collections : Timeliness/Confidence Customer Identity Integrity Role of channels KYC Role of business models Fraud Risk Profiles Integrity of business model/channel combinations Stake Analysis (what is at stake) Credit Risk Profiling Prepaid Postpaid Revenue Share (Partners) Decomposition of Billing Arenas Key Concepts DAM © Standard Billing Architectures Access Architecture Postpaid Service Delivery Architecture Prepaid Accounting Interface Mapping Radius AAA Verification Convergent Provisioning The Billing:Credit Profile Account Activation Prepaid: Prepaid, Prepaid:Postpaid, Postpaid:Prepaid, Channel Integrity Postpaid:Postpaid Billing System Itself (as it fits within framework) Practical Applications Day at a Glance Learn how to identify, analyze and assure any billing system Standard controls for billing systems through systematic decomposition techniques Mediation Systems Learn how to apply the right controls to the right place Postpaid Billing Systems Learn how calibration of controls is done Credit Management Learn h operational managers consider the k RA i L how i l id h key issues Sales and Channel Management and identify operational tradeoff points. Prepaid Billing Systems Radius/Diameter Servers Convergent Billing Systems Mbanking Systems Location Based Billing Services © 2011 Rob Mattison www.ra-academy.org 114 of 364
- 150. Revenue Assurance Foundations RAF103: Billing Foundations Standard Controls What are the standard controls for billing operations How do they work How are they applied When are they utilized How are they “calibrated”? CDR (Transaction) Transport AAA Controls • Verify that all records were moved with integrity Synchronization (Xdomain Controls) I/O • Verify that everything in is accounted for out Pro-active Controls Filtration • Verify that filtration rules are applied properly Revenue Stream Integrity Controls Suspension • Verify that records are suspended properly Rating controls Error • Verify that things identified as errors, are in fact errors Consolidation • Verify that any consolidation activities were executed accurately Aging • Verify that transactions are not over-aging Transaction Integrity Controls Rating Controls (Radius/Prepaid) • Verify that rates are properly applied and • Verify that all transactions are executed properly calculated and with integrity Rate Controls • Verify that the proper rates are utilized by the rating engine © 2011 Rob Mattison www.ra-academy.org 115 of 364
- 151. Revenue Assurance Foundations RAF103: Billing Foundations Standard Controls Customer Identify Verification (KYC) A pre-defined logical checkpoint that Customer Information Accuracy the majority have agreed is required to Customer Credit Controls assure a given capability. Each vertical domain has a defined SET of Standard Controls These are logical requirements NOT PHYSICAL IMPERATIVES Meets a challenge: • How do you prove that ???? There are many ways to implement a standard control There are often the “most common” or the “standard” approach to the problem BUT it is up to the RA professional to: • Map the control Select the proper implementation of the control • Calibrate the control (Set Frequency, Compliance and Level of Risk) © 2011 Rob Mattison www.ra-academy.org 116 of 364
- 152. Revenue Assurance Foundations RAF103: Billing Foundations Mediation Key Concepts Mediation Systems • What is a mediation System? • Functions ? • Deployment Architecture ? • How i it used? H is d? How is it calibrated? Rob Mattison The Revenue Assurance Academy 1/21/2011 1 ©© Copyright 2009 Copyright 2011 Rob Mattison 2 © Copyright 2011 GRAPA Key Concepts Key Concepts • Standard controls • What is a business rule? – CDR Transport – I/O • How are business rules implemented? – Filter • How do you verify a business rule – Suspend p integrity? – Error – Consolidate • What are the Standard Controls? – Aging – Business Rule Audit(Integrity) • How do you verify ? – Synchronization (*Optional) • How do you calibrate them? – Security – Change management Rob Mattison 3 Rob Mattison 4 © Copyright 2011 GRAPA © Copyright 2011 GRAPA Practical Applications • Learn how to identify mediation functions CDR CDR CDR CDR CDR CDR CDR CDR where they are performed in the revenue Reconcile CDRs Into Transactions Reconcile CDRs Into Transactions stream. Transaction-CDRs Transaction Transaction-CDRs Transaction • Learn how to identify the key controls that should be in place in a mediation stream. • Learn how to find the business rules for a Mediation System mediation system. CDR CDR CDR CDR • Learn what the proper controls should be, Reconcile CDRs Into Transactions and how to verify that. CDRs can be collected and consolidated Transaction-CDRs Transaction Rob Mattison 5 daily, hourly, or in almost real time. © Copyright 2011 GRAPA © 2011 Rob Mattison www.ra-academy.org 117 of 364
- 153. Revenue Assurance Foundations RAF103: Billing Foundations Mediation CDR Details Vary Consolidated CDRs – Wireline versus Wireless – Brand and model of network and switching system Mediation •Slight variations in CDR formatting and g g System collection exist. Format Billing for Export System Fraud System to Other Carriers Rob Mattison 8 © Copyright 2009 GRAPA Key Role of Mediation System What is a “Business Rule”? •The mediation system filters, formats, and • A set of specifications prepared by a client forwards the CDRs to both the billing system system (for customer invoicing) and interconnection • The business rules, are the sum total of ( (for carrier invoicing) g) functions that a mediation system is •It serves as the buffer between the network supposed to perform and the business • Each client submits its own unique •Mediation, therefore, is a key element of business rules any revenue assurance process Rob Mattison 9 Rob Mattison 10 © Copyright 2009 GRAPA © Copyright 2009 GRAPA Operational Requirements Business Rules 1. Translate switch “machine code” into readable BSS computer 1. Codification format Substitute values (codes that the switch uses vs codes that the 2. Reformat records client needs) 1. TTFile is a variable length, concatenated file Ie. Xx = prepaid , Yy= postpaid 2. All records are a different length 2. Rounding and Calculation 3. Must be standardized and tablized 3. Serialization (Track all cdr serial numbers) 3. Filtration 4. Ttfile Serialization – Only forward records that I want to see 5. I/O 4. Error Elimination 6. Business Rule Counters 5. Consolidation (CDR Stitching) 7. Packaging of CDRs for downstream systems (CDR files to be 6. Suspension (hold records) passed) – Partial CDRs – Validation of A.nUM, Trunk Group, other functions Rob Mattison 11 Rob Mattison 12 © Copyright 2009 GRAPA © Copyright 2009 GRAPA © 2011 Rob Mattison www.ra-academy.org 118 of 364
- 154. Revenue Assurance Foundations RAF103: Billing Foundations Mediation Complexity in Usage Records Conversion of CDR’s • Different formats supported • Conversion – ASCII – Processing the CDR’s collected by applying business rules – ASN.1 – Also performing the format and data translation – EBCDIC – BINARY – Etc … • Inconsistent information – No standard format – No consistent information with different vendors Rob Mattison 13 Rob Mattison 14 © Copyright 2009 GRAPA © Copyright 2009 GRAPA Business Rules Major Activities Associated with Mediation Mediation Requirements Collection and Verification • Filtration - Specification of - Switches of interest • Aggregation - Filtering Rules - Suspension Rules - Format requirements • Database mapping Mediation System Configuration • Sequence validation - Set up Mediation system to deliver as required • Duplicate CDR Mediation System Ongoing Operation - 24 hour processing - Processing by “batch” - Continuous feed in and feed out Rob Mattison 15 Rob Mattison 16 © Copyright 2009 GRAPA © Copyright 2009 GRAPA Mediation configuration Mediation ongoing functionality • After the collection and acceptance of requirements, • Mediation processing itself, consists of the continuous the mediation system will configured and tested for collection and processing of CDR’s on a basically 24 hrs a day, 7 days a week basis. There are two principle modes in which a the CDR processing requested mediation system can function: • For each target system, then, the mediation system – Near real time is configured to provide the selection, collection, – Batch filtering, suspension, consolidation, standardization filt i i lid ti t d di ti • In the near real time mode – the mediation system processes CDR’s as soon as they are provided, and forwards them to the and formatting rules required target systems as soon as possible • Based upon those requirements a series of • In the batch mode (far more common), CDR’s are collected for processing steps, intermediary databases and files, periods of time (often hourly) and then submitted and run in “batches”. Typically, these batches are then numbered, and and reference tables are constructed accounting for these batches is how the managers of the mediation system can keep track of an monitor performance and throughput. Rob Mattison 17 Rob Mattison 18 © Copyright 2009 GRAPA © Copyright 2009 GRAPA © 2011 Rob Mattison www.ra-academy.org 119 of 364
- 155. Revenue Assurance Foundations RAF103: Billing Foundations Mediation Typical Configuration CDR Management Integrity • Mediation Systems runs in “batches” • You cannot assume that CDRs are • CDR’s are copied to the mediation system as captured, managed and passed with soon as possible after the Ttfile is written integrity • The mediation system then runs a “batch” – a • Many revenue assurance problems can be number of ttfiles at the same time traced back to improper CDR handling, • Batch reports are generated to report what lack of backup/recovery capabilities happened • EOD reports summarize all batches for the day • All output files are identified by Batch ID Rob Mattison 19 Rob Mattison 20 © Copyright 2011 GRAPA © Copyright 2009 GRAPA CDR Management Techniques CDR Management • CDR switch based tally – tracking switch activity over time Switch CDR Mgmt Methods -------------------------------------- 1. Dump and Done • CDR store and forward check – keeping 2. GDS – Generation Data Set track of history and checking that all sent 3. Store and Forward are received New File Thresholds --------------------------------------- 1. Timing – every 15 min (1 hr) 2. Size – every 20 MB 3. Volume – every 10,000 CDR Rob Mattison 21 Rob Mattison 22 © Copyright 2009 GRAPA © Copyright 2009 GRAPA CDR Management Dump and Done Switch CDR Mgmt Methods -------------------------------------- 1. Dump and Done 2. GDS – Generation Data Set 3. Store and Forward New File Thresholds --------------------------------------- 1. Timing – every 15 min (1 hr) Writing continues – no follow up 2. Size – every 20 MB 3. Volume – every 10,000 CDR Rob Mattison 23 Rob Mattison 24 © Copyright 2009 GRAPA © Copyright 2009 GRAPA © 2011 Rob Mattison www.ra-academy.org 120 of 364
- 156. Revenue Assurance Foundations RAF103: Billing Foundations Mediation Generation Data Set Store and Forward 0 -1 FTP -2 New files continue to be created Switch Mediation “push” staging area Rob Mattison 25 Rob Mattison 26 © Copyright 2009 GRAPA © Copyright 2009 GRAPA “Assisted” CDR Transport (From “Dump and Done” and GDS) CDR Transport Assurance • Did all CDRs generated get delivered to Manual “push” the mediation system staging area? • How do you know? 0 Home grown g – File transport integrity (by file) p g y( y ) -1 application – File transport integrity (contents of file) -2 – CDR transport integrity Mediation Mediation System System “pull” Rob Mattison 27 Rob Mattison 28 © Copyright 2009 GRAPA © Copyright 2009 GRAPA Tracking CDR Transport Mediation Leakage Causes • Does the switch keep track of the number • Configuration incorrect of files that it creates? • Configuration modified (not completely) • Where and how is it tracked? • System errors • If not, then you will have to tally them yourself – Verifying delivery • Synchronization errors S h i ti • Track file number / date / time by switch • Records suspended too long • Tracking CDR • Records errored in error – Contiguous CDR serial numbers / per switch Rob Mattison 29 Rob Mattison 30 © Copyright 2009 GRAPA © Copyright 2009 GRAPA © 2011 Rob Mattison www.ra-academy.org 121 of 364
- 157. Revenue Assurance Foundations RAF103: Billing Foundations Mediation Mediation Leakage Sources Functionality • Dropped CDR’s • System errors • Data Corruption • CDR’s that are suspended • System capacity mismatch • Key functions include forever • Traditional CDR Error files (overflows) – Ability to configure multiple input and output data (Known and accepted • Misaligned processing or formats errors) logic rules • Errors in transaction • Parsing failures and – Ability to configure multiple streams for usage data assembly validation errors record collection, processing, and delivery • Misclassification of CDR’s • Incorrect rating tables – Rule engine to develop processing functions • Format errors • Missing long duration call handling and duplication – SDK to develop complex customised processing • Standardization Errors • Referential Integrity Errors detection functions, with simulator for testing • Lacking or inaccurate error – Filtration • Filtering Errors correction capabilities • Poorly controlled changes • Mis-correlation of usage – Rule based data record validation to translation tables events across network • Operator errors elements and content – Duplicate data record check providers – Data record aggregation and multi-level correlation • New types of usage not – External database table look up © Copyright 2009 GRAPA Rob Mattison recorded 31 © Copyright 2009 GRAPA Rob Mattison 32 About Business Rules About Business Rules • Filtration • Database mapping – Mapping of a CDR field value to a value specified in an – Based on operators criteria filtering of CDR’s are performed external database – Operator for example can configure to filter the • Sequence validation q calls from being billed which are less than 1 – Validating the CDR sequence of collected CDR’s present in minute duration a file and raising alarm for violating • Aggregation – Switches generate CDR’s based on time interval Aggregation makes several partial CDR’s of same source into a single CDR of total duration Rob Mattison 33 Rob Mattison 34 © Copyright 2009 GRAPA © Copyright 2009 GRAPA Operation, Maintenance, and Administration • Provides friendly user interface for handling the mediation setup – Also handles • Software management • P f Performance management t • Alarm management • Log management • Security management • Reporting Rob Mattison 35 © Copyright 2009 GRAPA © 2011 Rob Mattison www.ra-academy.org 122 of 364
- 158. Revenue Assurance Foundations RAF103: Billing Foundations Postpaid Billing Key Concepts Postpaid Billing • What is a postpaid billing System? • Functions ? • Deployment Architecture ? • How i it used? H is d? How is it calibrated? Rob Mattison Revenue Assurance Academy 1/21/2011 1/21/2011 11 ©© Copyright 2009 Copyright 2007 © Copyright 2011 Rob Mattison 2 GRAPA Key Concepts Key Concepts Standard controls – Daily Cycle Standard controls – Cycle Controls – CDR Transport – I/O – I/O – Filter – Filter – Suspend – Suspend – Error – Error – Aging – Consolidate C lid t – Rate R t – Aging – Rating – Business Rule Audit(Integrity) – Customer Identity – Synchronization (*Optional) – Product Identity – Security – Revenue Recognition – Change management – Change management – Credit exposure monitoring – Invoice Audit – Cycling – Print Feed Audit © Copyright 2011 Rob Mattison 3 © Copyright 2011 Rob Mattison 4 GRAPA GRAPA Key Concepts Practical Applications • What is a billing cycle? • Learn how to identify postpaid billing • How is it run? functions where they are performed in the • What are the Billing Operations KPI’s revenue stream. • What Wh t are th St d d C t l ? the Standard Controls? • Learn how to identify the key controls that should be in place in a postpaid billing • How do you verify ? system • How do you calibrate them? • Assure the rating and rate process • Learn what the proper controls should be, and how to verify that. © Copyright 2011 Rob Mattison 5 © Copyright 2011 Rob Mattison 6 GRAPA GRAPA © 2011 Rob Mattison www.ra-academy.org 123 of 364
- 159. Revenue Assurance Foundations RAF103: Billing Foundations Postpaid Billing OSS Steps in the Billing Cycle INTERCONNECTION Switches, Routers, Cables, Other •Daily processing Trunks, Lines, Buildings, and so on Carriers – Verify the integrity of the CDRs (Create VTX) – Verify the integrity of the inter-carrier CDRs – Format CDRs (create FTX) THE The – Separate CDRs by billing cycle BILLING Big •Cycle processing SYSTEM Bottleneck – Rate the formatted CDRs (Create RTX) – Add monthly charges Call Center, Accounting, – Add unpaid balances Fraud, Revenue Assurance, – Test invoices Sales, Marketing – Verify invoices – Print invoices BSS ... © Copyright 2009 Rob Mattison 8 Unformatted Transaction Verified Transaction Formatted Transaction Cycle Cycle Processing Records (UTX) Records (VTX) Records (RTX) Files Customer Consolidated Billing Verify Format Cycle Wireline Database CDRs Bill Codes Unpaid And Fees Inter-Carrier Verify f Format Cycle C Balances Tariffs CDRs To Apply Apply Rating Invoice Fees Unpaid Consolidated Verify Format Cycle Generation Wireless FTX RTX RTX CTX CDRs (Formatted (Rated (Rated (Complete Transaction Transaction Transaction Transaction Other Billing Verify Format Cycle Records) Records) Records) Records) Details The Invoicing and Validation Process Billing System Functions Accounting Customer • Customer identity capture and Review Billing management Database Approval • Product management Test Revenue Invoices Assurance A • Bill cycle management Reports Extract • Rating management Sample Revenue Rated Transaction CTX Assurance • Invoicing management Runs File (Completed To Transaction Printing Records) © Copyright 2009 Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 124 of 364
- 160. Revenue Assurance Foundations RAF103: Billing Foundations Postpaid Billing Background Operations Customer Identity Product / Rate Plan Information Management Associate Customers with Customer Identity Capture Management Rate Plans • This one of the single biggest areas of billing “leakage” vulnerability • Problem is that there are so many different Billing System g y ways that customer information can be captured, changed, and otherwise modified •For rating and billing to occur successfully, you need the following: •Active customers with product instances •Services associated with a product instance •Tariffs associated with the product definition •Usage of the product © Copyright 2009 Rob Mattison 14 Customer Identity Challenges Time / Compound Rating • Customer name address • The reason that you cannot rate “real time” – Critical for the delivery of bills • Key confusion areas: is that many rate plan offers assume a – ID#: SSN, national ID #, national banking # ? certain level of activity before the – Multiple addresses discounts apply pp y • Billing dd Billi address • Home address – I.e. – 20% discount when you use of 100 • Account address minutes • Historical record of addresses – Name and address format errors – 100 free SMS messages when you use 200 • Street names – last names – form of names SMS messages within a two week period • Abbreviations © Copyright 2009 Rob Mattison 15 © Copyright 2009 Rob Mattison 16 Friends and Family Plans Customer “activation” • Even more complex are plans that provide • Ultimately, the customer is not activated different rates for different numbers that until the rate plan information is associated you call with their account • A typical “friends and family” program with friends family • This can involve special “manual” screen manual have a database of “friends and family” processes, or can be managed numbers for each number. These automatically reference tables must then be looked up and utilized for rating © Copyright 2009 Rob Mattison 17 © Copyright 2009 Rob Mattison 18 © 2011 Rob Mattison www.ra-academy.org 125 of 364
- 161. Revenue Assurance Foundations RAF103: Billing Foundations Postpaid Billing Activation Techniques Intec • Several approaches are employed to pull Database Events Charges, Events, this all together Errored Events Rating Billing – Some billing systems manage activation Normalisation Normalised events Rating Billing Invoice data Invoicing automatically – Some companies emplo “acti ation employ “activation Events Invoice Server Invoices mediation” systems Usage One-off – Many companies build their own activation Rental Apply Invoice applications – Many steps are loosely defined – Key area of leakage potential © Copyright 2009 Rob Mattison 19 Assuring Normalization Assuring Rating • This is the daily “cycle file” processing • Rating is the most complex single process • Prerating is usually not critical in the telco • Biggest issues are: – Error • Confusing and contradictory rate plans – Suspend make manual verification difficult – Consolidate • These are the FSEC and MI/MO issues similar • Typical approaches to mediation issues – Manual audits • Same reports/techniques can apply – Parallel rating engines • Key – reject file analysis, sample verification of pre-rating © Copyright 2009 Rob Mattison 21 © Copyright 2009 Rob Mattison 22 Assuring Recurring Charges Billing System File to be Send to • Recurring charge verification (Rating Process) invoicing • Sample based or full-cycle run Compare Results • Obtain list of all recurring charges to be Pre Rated R t d applied CDR’s • Obtain list of recurring charges as reported Parallel after rating Rating Parallel Engine FIle • Compare results © Copyright 2009 Rob Mattison 24 © 2011 Rob Mattison www.ra-academy.org 126 of 364
- 162. Revenue Assurance Foundations RAF103: Billing Foundations Postpaid Billing Billing System File to be Extract Assuring “Cycles” Send to Recurring (Rating Process) invoicing Charge Data • Most common approach is random, manual audits Recur • Automatic full invoice audit is usually cost charge Recurring prohibitive Charges Recurring Compare Charges Parallel Charges Summarization FIle © Copyright 2009 Rob Mattison 26 Apply De dup Prerating Accounting Split CDR ACNTNG Guiding Keys CSI CDR UPP MCAP CAP BIP (mediation) DATA BIF Rating And Formating Invoicing Error Error FILE © 2011 Rob Mattison www.ra-academy.org 127 of 364
- 163. Revenue Assurance Foundations RAF103: Billing Foundations Credit, Collection and Provisioning What does prepaid mean? It means you pay before you get service UNDERSTANDING CREDIT POSTURING © Copyright 2009 Rob Mattison © Copyright 2009 Rob Mattison Can you do prepaid with a postpaid billing Cases system? Yes . This is the common model in US/EU ATT / US Customers pay , in advance for service for the Rollover Minutes next month Promotions and discounts Then “adjustments” are made based upon credit adjustments made, The ATT Online Bill risk/usage This greatly decreases the telco’s credit exposure Utilizes the traditional, batch based, monthly cycle based billing systems © Copyright 2009 Rob Mattison © Copyright 2009 Rob Mattison Key Operations / RA-Fraud Profile Payment These systems simply shift the credit Switc management function “upstream” or h “downstream” $ Trading “deposit” for “risk” g p Against g CDR $ Amount Due Invoic Mediatio e n Daily CDR Credit Rating Unpaid Fees Processing Mgmt Balance and Computation Taxes Billing System (recompute credit risk) © Copyright 2009 Rob Mattison © Copyright 2009 Rob Mattison © 2011 Rob Mattison www.ra-academy.org 128 of 364
- 164. Revenue Assurance Foundations RAF103: Billing Foundations Credit, Collection and Provisioning Understanding – Deferred Credit Risk Credit Posturing Key to convergent rating based billing systems The Credit/Sales Trade-off Complex credit models and variable credit Higher Credit Risk = Higher Sales alignment based upon this model combined with But p p prepaid rating model g Higher Credit Risk = Higher Losses due to fraud/failure to pay © Copyright 2009 Rob Mattison © Copyright 2009 Rob Mattison 8 Margin Residual TradeOff Posture : Margin Residual Collections Margin Residual = Marginal Difference 1. Increase in sales due to lower credit limit 2. Increase in losses Rob Mattison What is left? Is it worth it ? The Revenue Assurance Academy +1-847-426-2098 www.ra-academy.org © Copyright 2009 Rob Mattison 9 The Collections Process The Credit Management Process Collections can be a critical point of revenue Define “risk classes” for logical groups of customers (partners) leakage for the company Define criteria in order to rank each customer or partner There are two aspects: Determine a mechanism for assessing the risk level associated with prospects Not taking on accounts that result in Write and enforce credit risk assessment policies collections activity (credit policy) Examine the “risk portfolio” and make adjustments to credit level based upon risk exposure and history Not spending too much money on collections activity (dunning policy) © Copyright 2009 Rob Mattison 11 © Copyright 2009 Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 129 of 364
- 165. Revenue Assurance Foundations RAF103: Billing Foundations Credit, Collection and Provisioning Risk Portfolio Analysis Dunning Management Review the percentage of no-pay, bad credit Is the process of managing the late collections customers you current experience process Determine if it is : Dunning can also be a cause of leakage Too high In the case of dunning you need to balance: dunning, Too low (can you afford more write-offs in The cost of collections efforts exchange for a higher percentage of overall Vs. business?) - The probability of being paid at all © Copyright 2009 Rob Mattison 13 © Copyright 2009 Rob Mattison 14 Dunning Management Carrier Situation Keep track of all overdue accounts Has a history of performing risk-based Maintain “aging” reports receivables management using decision software Assign a dunning “investment number” (how and collections software much will be spend on collections efforts) Has experienced recent increases in delinquent p q Keep a history of techniques and results and write-off balances among residential and business wireline customers Optimize for best results © Copyright 2009 Rob Mattison 15 © Copyright 2009 Rob Mattison 16 Challenges Goals Predictive strength of risk models had declined over time Reduce delinquency and write-offs in consumer and business portfolios Strong Model Weaker Model Maintain customer satisfaction and nurture customer loyalty Establish an infrastructure for ongoing customer Customer strategies had not been evolved to reflect changes in market conditions and strategy improvement customer portfolios Limited historical customer data available to: Perform detailed customer analysis Build new predictive models Effectiveness of current strategies not compared to alternatives through controlled testing Organizational process not yet established for ongoing strategy improvement © Copyright 2009 Rob Mattison 17 © Copyright 2009 Rob Mattison 18 © 2011 Rob Mattison www.ra-academy.org 130 of 364
- 166. Revenue Assurance Foundations RAF103: Billing Foundations Credit, Collection and Provisioning Solution Summary Collections Customer Data Mart RA for collections? Predictive Risk Models Question: How much money are you loosing due Customer Segmentation to collections policies? Champion/Challenger Strategy Tests Question: What is your collection and credit Model, Segmentation, and exposure for channels? Strategy Execution Continuous Learning and Strategy Test Evaluation Question: What is your collection and credit Improvement exposure for content and interconnect partners? New Champion Strategy © Copyright 2009 Rob Mattison 19 © Copyright 2009 Rob Mattison 20 Dunning Management Collections Management Customer Invoices Complaint Customer Invoices Sent Customer Sent Service Suspense Billing File Billing Customer Customer Management Payment (waiting Update For Customer Payment) Balance Adjustment To No Accts Bill Payment Receivable Sent © Copyright 2009 Rob Mattison 21 © Copyright 2009 Rob Mattison 22 Dunning Management Customer Queue 1 Reminder Letters Customer Queue 2 Suspense Customer Provisioning File Queue 3 Phone Calls Management Customer Queue 4 Customer (waiting Collection For Queue 5 Agencies Customer Payment) Queue 6 Queue 7 Customer Account Queue 8 Cancellation Customer Customer are placed into Rob Mattison Different “treatment queues” Customer Billing Update Customer Payment The Revenue Assurance Academy Balance Accts Receivable © copyright 2009 © Copyright 2009 Rob Mattison 23 © 2011 Rob Mattison www.ra-academy.org 131 of 364
- 167. Revenue Assurance Foundations RAF103: Billing Foundations Credit, Collection and Provisioning What is Collateral Leakage? Major Areas of Collateral Leakage Main leakage is involved with the core RMC Sales and customer service itself Network synchronization Collateral leakage is leakage that occurs when Product development the RMC itself is fine, but other systems that , y must feed the RMC with information are out of synch © Copyright 2009 Rob Mattison 25 © Copyright 2009 Rob Mattison 26 Fulfillment Customer Service Resource Supplier/Partner Relationship Management Management Relationship Management Operations Operations Management Customer Service Resource Interface Configuration Provisioning Allocation to S/P Buying Management Activation Service Instance Marketing S/P Purchase Fulfillment Order Network Response Provisioning Management Allocation to Service instance S/P Interface Selling Computing Management Provisioning Allocation to Order Service Instance Fulfillment receives inputs from and Handling Customer provides outputs to both the Assurance Interface and Billing processes. Management Retention Loyalty CRM, SmO, RMO, and S/PRM are comprised of more processes than those shown here. These are the processes that relate to the fulfillment process. © 2011 Rob Mattison www.ra-academy.org 132 of 364
- 168. Revenue Assurance Foundations RAF103: Billing Foundations Channel and Sales Assurance identified HLR If not rovisioned HLR validate on this HLR? validate subscriber subscriber yes yes BTS BCS MSC SSP SCP no IVR Yes, advise subsc: SDP allow call No, look up low balance or barring disallow call balance A-Num validity period 2 min? Administrative Account Customer Adjustments Management Account System Database Internal Retail ATM Independent Sales Convenience Direct Brokers Force Stores Deposit 1. Prepayment Medium 1. Vouchers – “Scratch Cards” 2. Prepayment Channel 2. Electronic Transfer – Bank Direct 3. Prepayment Revenue Flow 3. Credit Card – Auto-Top Up E h media h i own unique set of Each di has its i f vulnerability points Rob Mattison •© Copyright 2010 •3 Rob Mattison •© Copyright 2010 •4 Vouchers (cards) created – not entered into Typically, prepayment is handled via channel system partners: Vouchers (cards) Distributed – funds not Wholesalers collected Retailers ◦ Stolen cards Banks Credit Card Companies Card Theft Card Cloning – (theft of serial numbers) You must assure ALL OPERATIONS and ALL INTERFACES with these partners Many serious leakage cases have occurred especially with wholesalers, agents and retailers Rob Mattison •© Copyright 2010 •5 Rob Mattison •© Copyright 2010 •6 © 2011 Rob Mattison www.ra-academy.org 133 of 364
- 169. Revenue Assurance Foundations RAF103: Billing Foundations Channel and Sales Assurance For each media identify SIM Creation ◦ Point of value creation (decision to create a SIM, TOPUP Card or TOPUP #) Top Up Card Creation ◦ Capture of the creation event E-Top Up Creation ◦ Document that “trail” that the value entity travels ◦ Assure valid “hand off” between entities at each point hand off For each Channel ◦ Trace the movement of value entities through the channel ◦ Assure “hand off” and acceptance of responsibility at each point Create reports to track and reconcile all value Rob Mattison •© Copyright 2010 •7 Rob Mattison •© Copyright 2010 •8 Value Generation Cycle ◦ From Budget to IN PIN Lifecycle The decision to generate Top-Up forces the ◦ Generation to realization creation of an accounting entry SIM Lifecycle ◦ Procurement to realization When PINs are generated, value is created ◦ Preprovisioning vs Provisioning HANDSET and Subsidy Asset Lifecycle As that value is “sold”, it turns into an ◦ P Procurement to realization li i accounts payable (deferred revenue) Procurement Cycle (Assets for Sale/Subsidy) Inventory Control Cycle (Assets for Sale/Subsidy) You need to have accounting controls over Point of Sale Controls the entire process ◦ Cash Controls ◦ Provisioning controls / Preprovisioning Controls ◦ Customer Identity controls Sales Commission Controls Customer Credit Assignment Controls(Customer Service/Accounting) •1 Rob Mattison •© Copyright 2010 •9 Rob Mattison 0 Annual Budget Cycle Forecast of Revenues Budget for “top Up” approved Demand Generation Formal Budget entries Sales/Marketing generate a demand Generation of Requisition Formal Requisition of Minutes Required: Requisition processed against budget ◦ Budget release approval process Segregation of Duties Approved Requisition sent to IN Mgr Audit Trail ◦ PIN Work Order and Sign-Off IN Manager generates PINs against requisition Segregation of Duties Sign off for generation Log of PIN’s Generated Audit Trail PINs are distributed to POS or Partner •1 •1 •© Copyright 2010 1 Rob Mattison •© Copyright 2010 2 © 2011 Rob Mattison www.ra-academy.org 134 of 364
- 170. Revenue Assurance Foundations RAF103: Billing Foundations Channel and Sales Assurance IN Balance IN Pre-Activation • Final Agent sells to •IN Mgr Generates customer PINs • Customer •Log all PIN/Serial •Final Agent/POS “activates the PIN’ •Balance copied to Numbers and Authorizes the use of customers account / • MSISDN/Time/Date Identity of Person PINS with IN Wallet for use IVR/Web/SMS/USSD Logged Generating Command • “Fingerprints” •“Fingerprints” •Log of all PINs pre- activated and the person performing it IN G Generation ti •“Fingerprints” “ ” Activation IN Generate Assign balance to Agent Responsible PINS Pin and Store Account PIN Lifecycle •1 •1 •© Copyright 2010 3 Rob Mattison •© Copyright 2010 4 The “shadow Activation Fraud” Theft of pins Duplicate Card Generation Safeguard / Audit trail basis for Fraud P ti Prosecution LOG LOG LOG Fingerprint Trail •1 •1 •© Copyright 2010 5 Rob Mattison •© Copyright 2010 6 Pre Provisioning Controls Telco Orders SIM Cards SIMs Loaded to HLR (Billing/CRM) Default Configuration Prepaid/Postpaid Range Encryption Key Encoded into SIMs Point of Sale Secret Encryption Key Delivered to Carrier Collect KYC Info Perform Security/Credit Check Encryption Code Installed Into AUC Post Provisioning Assign KYC to SIM Modify Authorization on SIM SIMs can now Authenticate •1 •1 •© Copyright 2010 7 Rob Mattison •© Copyright 2010 8 © 2011 Rob Mattison www.ra-academy.org 135 of 364
- 171. Revenue Assurance Foundations RAF103: Billing Foundations Channel and Sales Assurance Provisioning Controls Point of Sale Recon /Audit ◦ SIM Orders vs SIM Channel Status vs Activations KYC – Credit/Security Assign SIM/Authorization (Fingerprints) Audit trails for SIM Assets Provisioning P i i i Info submitted to Customer HLR/Billing Configuration Service/Provisioning Customer Notification of Activation SIM Activated •1 •2 Rob Mattison •© Copyright 2010 9 Rob Mattison •© Copyright 2010 0 SIM Purchase Order Tracking Report Purchase order # SIM Cards Delivery # SIM Cards Management of AOV (Assets of Value) is a well understood process in retail Date Number ordered Order Date Date Received 5-Feb BH29382 10000 5-Feb 19-Feb 10,000 17-Feb 12-Mar BX38290 BZ09090 5000 2500 18-Feb 14-Mar 10-Mar 11-Apr 4,900 2,200 For the telco there are several complexities 16-Mar CA3928 10000 16-Mar 2-Oct 2,380 ◦ Lack of retail / inventory infrastructure 21-Mar CB3920 15000 22-Mar 18-Apr 14,100 4-Apr 4A CH3948 10000 4-Apr 4A 18-Apr 18 A 9,980 9 980 ◦ Retail value vs Subsidy Value confusion 15-Apr CK2222 5000 16-Apr 7-May 5,000 ◦ Supply Chain / Retail Chain Discipline 21-Apr CL0009 2500 23-Apr 21-May 2,500 3-May DC9384 2000 3-May 19-Nov 1,900 5-May DR1232 2500 6-May 2-Jun 2,200 7-May DT2392 5000 9-May 6-Jun 2,380 16-May EH3920 7500 16-May 2-Dec 6,600 25-May EL2223 8000 25-May 21-Jun 7,980 30-May FI8932 2000 31-May 14-Jun 2,000 27-Jun GF3829 1000 29-Jun 20-Jul 1,000 •2 •2 Rob Mattison •© Copyright 2010 1 Rob Mattison •© Copyright 2010 2 The formal process of buying goods and services. The Purchasing Process can vary from one organization to another, but there are some common key elements. 1. 'Demand' or requirements Standard - a one time buy; this could be for a physical part (inventory) or a service. 2. A requisition is generated Planned - an agreement on a specific item details the requirements (in some cases providing a requirements speciation) at an approximate date; and 3. Triggering the procurement department. Blanket - an agreement on specific terms l k f 4. A Request for Proposal (RFP) or Request for Quotation (RFQ) is then raised. and conditions: date and quantity and 5. Suppliers send their quotations in response to the RFQ amount are not specified. 6. A review is undertaken 7. The best offer (typically based on price, availability and quality) is given the purchase order. Rob Mattison •1/21/2011 Rob Mattison •1/21/2011 © 2011 Rob Mattison www.ra-academy.org 136 of 364
- 172. Revenue Assurance Foundations RAF103: Billing Foundations Channel and Sales Assurance 1. Purchase Orders are normally accompanied by You need to identify the major control Terms and Conditions 1. Form the contractual agreement of the Transaction. parameters (the limits to the spending 2. The Supplier then delivers the products/service process set by policy) 3. The customer records the delivery 1. Goods Inspection Process. 4. An i A invoice is sent b the supplier i i by h li 5. Invoice cross-checked with the Purchase Order 6. Invoice cross-checked against receipt document 7. Payment is made and transferred to GL. Rob Mattison •1/21/2011 Rob Mattison •1/21/2011 Once materials are received (and hopefully Vendor Selection and Controls officially accepted) some kind of inventory management process should take over Product Selection and Controls Inventory Management/Supply Chain is Price Negotiation and Controls focused on making sure that things are used for the right reasons. •2 Rob Mattison •1/21/2011 Rob Mattison •1/21/2011 8 A process for keeping track of objects or Inventory Management materials. ◦ Identification of what it is, where it is, who put it there and when In common usage, the term may also refer to Check In just the software components. ◦ Acceptance of the material from outside ◦ End of procurement, beginning of supply chain Move Tickets ◦ Record each time an asset of value is moved from one location to another Put – an order to put something somewhere Get – an order to get something for someone to use Storage Locations Check Out ◦ Acceptance of the material by the final consumer Customer, Sales Rep, Field Engineer •2 •3 Rob Mattison •1/21/2011 9 Rob Mattison •1/21/2011 0 © 2011 Rob Mattison www.ra-academy.org 137 of 364
- 173. Revenue Assurance Foundations RAF103: Billing Foundations Channel and Sales Assurance Key to control is : Audit Trail ◦ Accountability ◦ Track all movements Each time an item is moved, someone takes ◦ Reconcile and “prove” all usage responsibility for it ◦ End to end consumption reports ◦ Security Inventory Control Each time an item is moved, it is put someone where it ◦ S Spot checks h k is safe ◦ Full counts (take an inventory) •3 •3 Rob Mattison •1/21/2011 1 Rob Mattison •1/21/2011 2 Break in the “chain of custody” Retail Style (SIM, Phones, etc) Insufficient audit trails Wholesale Style (SIM, Phone, etc.) Lack of end-to-end consumption reporting Maintenance and Repair Style (Field Engineers, Fault Management) (dangling inventory) Office Supplies Style ( ape , Pens) O ce Supp es Sty e (Paper, e s) d f f ( Improper identification of unique items (no Capital Expenditure Style (Switches, serial number or id) Computers etc.) Intangible “assets” for Telecom (top up) •3 •3 Rob Mattison •1/21/2011 3 Rob Mattison •1/21/2011 4 Stolen from POS/Distributor 1. Log of all claims Distributor Theft 2. Verification and Forensics using PIN Distributor “claim of theft” Lifecycle Logs Found / Recycled PINS 3. Tracking for Multiple Claims 4. Prosecution f False Claims 4 P ti for F l Cl i (EIR, Fingerprint tracking) 5. Traps and triggers ◦ Tell person to come into office to receive credit ◦ Arrest on site 6. Secret shopper •3 •3 Rob Mattison •© Copyright 2010 5 Rob Mattison •© Copyright 2010 6 © 2011 Rob Mattison www.ra-academy.org 138 of 364
- 174. Revenue Assurance Foundations RAF103: Billing Foundations Channel and Sales Assurance Activation for commission Activation Recon ◦ Premature activation ◦ Activation order (IN-Fingerprints) vs Sales records By channel to get commission (Sell Later) (Receipts from Point of Sale) Activation for theft of top Up Activation Audits ◦ Fraudster activation ◦ Same By non-paying customer who stole PIN There are more provisioning controls, but not Additional Exposure part of channel assurance ◦ SIMS ◦ Handsets/Subsidy artifacts •3 •3 Rob Mattison •© Copyright 2010 7 Rob Mattison •© Copyright 2010 8 How do you know that sales channels (internal and external) are not bypassing or manipulating the system to gain excess commision Common Exploits / Errors ◦ Commission paid at POINT OF ACTIVATION Revenue never realized Fraud / Error both possible ◦ Commission paid at POINT OF SALE Customer never delivers volume/value Margin / Market Issue for RA •3 •4 •© Copyright 2010 9 Rob Mattison •© Copyright 2010 0 Agent activates a large number of Cards/SIMS SIMS/Cards / Subsidy devices “in house” ◦ Sold to person who does not, will not generate ◦ Activation orders generate commission proposed revenue Agent either Fraud ◦ Intends to actually sell them next month ◦ Sales c a e “loads t e p pe with false custo e s Sa es channel oads the pipe” t a se customers ◦ Does not intent to sell them, but will “Loose them” ◦ Sales channel bypasses Customer Identity/credit/ or “return them later” without recovery of fraud controls commission Leakage ◦ Customer mis-represents self/intention •4 •4 Rob Mattison •© Copyright 2010 1 Rob Mattison •© Copyright 2010 2 © 2011 Rob Mattison www.ra-academy.org 139 of 364
- 175. Revenue Assurance Foundations RAF103: Billing Foundations Channel and Sales Assurance Commission plans that allow agents to Approval levels for credit adjustment charge twice for the same sale Log of each adjustment Fallacy / weakness in sales tracking systems Approval for Adjustment over specific level Fallacy / weakness in promotion design Analysis of Log to check for patterns •4 •4 Rob Mattison •© Copyright 2010 3 Rob Mattison •© Copyright 2010 4 © 2011 Rob Mattison www.ra-academy.org 140 of 364
- 176. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Traffic Assurance Prepaid Prepaid Billing Traffic Assurance • Prepaid billing is – not really billing at all – a real-time decrement of pre-purchased p p minutes. • Revenue assurance on a prepaid account is more complicated than on a postpaid account Rob Mattison Revenue Assurance Academy 1/21/2011 1/21/2011 +1-847-426-2098 www.ra-academy.org 11 © Copyright 2008 ©© Copyright 2009 Copyright 2010 © Copyright 2007 Rob Mattison 2 Four Major Control Domains Understanding Prepaid VMS Account Mgmt Rating The process of managing the application Assuring that all • Prepaid billing is the process of collecting money from of credits and debits to the customers account rates are applied customers in advance of the delivery of services to them Account Management involves: properly - Account creation / termination - Account Increment/ Decrement Mgmt - Account Adjustment • There are several different ways that prepaid business can be run, but the one we review here is “typical” for the wireless business Traffic Mgmt Channel Mgmt The process of providing service to the The process of collecting revenues from Customer based upon the credit they customers before delivery of service. Have established. • Prepaid wire line and other lines of business are possible Prepayment Management involves: Traffic Management involves: - Prepayment Channels and Media with only slight modifications to the model - Call Authorization - Revenue Accounting - Rating / Credit Decrement - Credit Accounting - Service Termination © Copyright 2007 Rob Mattison 3 © Copyright 2007 4 What is Traffic Assurance Traffic Assurance • Domain associated with assuring that all prepaid traffic is comprehensively MANAGED by the PROPER IN • Traffic Assurance assures – Authentication, Authorization – Network Assurance 1/21/2011 1/21/2011 55 © Copyright 2008 ©© Copyright 2009 Copyright 2010 © Copyright 2007 Rob Mattison 6 © 2011 Rob Mattison www.ra-academy.org 141 of 364
- 177. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Traffic Assurance Decomposition of the Domain Fraud Dimensions • Trying to assure too many aspects will • Authentication only result in confusion and greater • Authorization chance of missing something • Initial MOI (Method of Ingress) • Key traffic assurance is foundational to other forms of assurance © Copyright 2007 Rob Mattison 7 © Copyright 2007 Rob Mattison 8 How does prepaid billing work? 1. Switch determines that the customer is prepaid (VLR Check) 2. Instead of going to the routing table, the g g g , switch will turn control over to the IN 3. The IN will then check for available balance for the “polling period” 4. Permission is sent to the switch 5. Call Progresses as per postpaid © Copyright 2007 Rob Mattison 9 Many wire line Telco's offer prepaid Long distance Prepaid Long Distance • How is it the same? – Still involves IN / Account Management Database – Still involves IN routing of control to IN and bypass of normal switch controls (AXE vs MSC) – Still involves payment, account and traffic management 1/21/2011 1/21/2011 11 11 © Copyright 2008 ©© Copyright 2009 Copyright 2010 © Copyright 2007 Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 142 of 364
- 178. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Traffic Assurance Prepaid Long Distance 1. Switch Allocated to work as prepaid service switch 2. Switch is configured for origination of long distance and l di t d local calls l ll – Hooked up to POI’s etc, as any other switch 3. An IVR Number is allocated as ‘server’ 4. Accounts are loaded with balance 5. Customer calls IVR-Switch 6. Balance is decremented (exactly like Prepaid) © Copyright 2007 Rob Mattison 13 Provisioning Key Issues • Customer must be provisioned in – HLR – with proper status (prepaid) – HLR – with proper IN p p – Prepaid Billing – with balance and MSISDN – Must provision all SERVICES not just pre/post status 1/21/2011 1/21/2011 15 15 © Copyright 2008 ©© Copyright 2009 Copyright 2010 © Copyright 2007 Rob Mattison 16 Revenue / Fraud Risks Fraud Cases • Customer as Postpaid when prepaid? • Manual manipulation of HLR • Customer as Prepaid when postpaid? • Recoding of switch • Manipulation of IN / account status © Copyright 2007 Rob Mattison 17 © Copyright 2007 Rob Mattison 18 © 2011 Rob Mattison www.ra-academy.org 143 of 364
- 179. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Traffic Assurance HLR – IN Synchronization Controls • Monthly • Weekly • Daily • Reasons • Consequences 1/21/2011 © Copyright 1/21/2011 2007 © Copyright 2008 ©© Copyright 2009 Copyright 2010 19 19 • RA issues / computation © Copyright 2007 Rob Mattison 20 Verification of Switch Programming Traffic Assurance – Switch/Peg counts • Test calls • Objective • Audits of CDR’s – Assure that every call that is supposed to be prepaid is being managed by the IN – Rating, duration, etc are verified in Mediation or Billing • Test – Make sure that no transactions occur without an audit trail © Copyright 2007 Rob Mattison 21 © Copyright 2007 Rob Mattison 22 Methods Pegcount check vs MSC CDR • Peg count vs MSC-CDR count MSC • MSC-CDR vs IN-CDR Pegcount – Pegcount Assurance (raw count) Report – Recon (matching) MSC-CDR MSC-CDR MSC-CDR MSC-CDR MSC-CDR © Copyright 2007 Rob Mattison 23 Rob Mattison 24 © Copyright 2007 © 2011 Rob Mattison www.ra-academy.org 144 of 364
- 180. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Traffic Assurance Issues and Concerns • major frauds will occur at this level • Failure to assure network and AA makes MSC-CDR AAA worthless •CDR Serial # •A.num IN-CDR •B.num •Duration •Bill Rate •A.num •Total charge •B.num •Start Time •Duration •End Time •Bill Rate •Total charge •Start Time •End Time © Copyright 2007 Rob Mattison 26 © 2011 Rob Mattison www.ra-academy.org 145 of 364
- 181. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Account Account Management Assurance •2 Account Management Increment/Decrement Integrity Transfer Integrity Rating Integrity Rob Mattison •© Copyright 2007 Account Management System Intelligent Network Vulnerabilities •3 •4 Fraudulent input of credits The “minutes” or other form of credit for a System fails to decrement properly given phone number are entered into the Run-off/Run-over examples Voucher Management System (VOMS) Intermittent failure to decrement As th A the person uses up th i ti their time, th VOMS the Failure to decrement for certain types of calls amount id decremented Double decrement (or worse) (examples) When the time is out, the connection is terminated This all happens in real time via the Intelligent Network Rob Mattison •© Copyright 2007 Rob Mattison •© Copyright 2007 Increment/Decrement Integrity Assuring for account balance (passive) •5 •6 There are many ways for accounts to be adjusted: 1. Create a matrix of all activities and all methods Activation (SIM) 2. For each , review internal controls and reports Activation (Voucher) 3. Assure the integrity of each option Activation (TopUp) Administrative Adjustment (Call Center/ Agent) Transfer between accounts DEFAULT – AMS Balance Report (Daily) Usage (decrement) Rob Mattison •© Copyright 2007 Rob Mattison •© Copyright 2007 © 2011 Rob Mattison www.ra-academy.org 146 of 364
- 182. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Account Customer Reports Assuring account balance (active) •7 •8 Customer Status Report – A report that identifies Variation on Prepaid Traffic Monitoring each customer and the status of their prepaid 1. Identify all sources of increment for a 24 hour account period Customer usage report – a report summarizing the (Activations, (Activations TopUps , Adjustments) total t t l usage of th customer b month f the t by th 2. Identify all sources of decrement for a 24 hour period Customer aging report – a report showing the aging (Usage, Adjustments, Transfers) of customer usage. How long do minutes sit 3. Identify the Starting balance and ending unutilized within a customer account balance for the period 4. Reconcile Rob Mattison •© Copyright 2007 Rob Mattison •© Copyright 2007 Customer Voucher Usage Report June Totals Total # Total Previous Minutes Vouchers Minutes Month Used This New Customer Name Phone Number Activated Activated Balance Month Balance Bill Smith (9839) 382-9220 1 100 300 280 120 Mary Jones (9839) 382-9221 00 300 100 200 Amit Satpathy (9839) 382-9230 3 500 0 200 300 Rajiv Gupta (9839) 382-9231 00 5 5 0 Karina Huesca (9839) 382-9233 3 250 10 255 5 Jose Cuervo (9839) 382-9237 12 1500 100 1,573 27 Paulo Costa (9839) 384-9539 1 30 50 64 16 Brigitte Bardot (9839) 385-3467 1 30 20 50 0 Marilyn Monroe (9839) 382-9220 1 30 10 0 40 Capt. James T Kirk (9839) 382-9221 1 30 8 0 38 Capt. Janeway (9839) 382-9230 1 60 5 65 0 Capt. Picard (9839) 382-9231 1 60 16 20 56 Datta Ram (9839) 382-9233 00 500 244 256 Ganesha Tgod (9839) 382-9237 00 1,200 677 523 Dali Lama (9839) 384-9539 00 5 5 0 Voucher Distribution and Collections Report Monthly Customer Voucher Usage Summary Report Account Assurance •11 Opening Balance Plus Increments (top ups) – Fingerprints Plus Increments (adjustments) – Accting/Call Center Logs Less Decrements (rated CDRs) Less Decrements (adjustments ) – logs MSC-CDR Closing Balance •CDR Serial # •A.num IN-CDR •B.num •Duration •Bill Rate •A.num •Total charge •B.num •Start Time •Duration •End Time •Bill Rate •Total charge •Start Time •End Time Rob Mattison •© Copyright 2007 © 2011 Rob Mattison www.ra-academy.org 147 of 364
- 183. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Account PIN Lifecycle Fingerprint Trail •13 •14 IN Pre- • Final Agent sells to IN Balance • IN Mgr Generates Activation customer PINs • Customer “activates • Log all PIN/Serial the PIN’ •Final Agent/POS •Balance copied to Numbers and Authorizes the use of • MSISDN/Time/Date customers account / IN Identity of Person PINS with Logged Wallet for use Generating IVR/Web/SMS/USSD • “Fingerprints” Fingerprints Command • “Fingerprints” •Log of all PINs pre- activated and the person performing it LOG LOG LOG •“Fingerprints” IN Activation Generation Rob Mattison •© Copyright 2010 Rob Mattison •© Copyright 2010 Account Management Audit •15 •16 Daily Reconciliation Audit Reports Call center IN Application (Adjustments Screen) Rob Mattison •© Copyright 2010 Rob Mattison •© Copyright 2007 © 2011 Rob Mattison www.ra-academy.org 148 of 364
- 184. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Rating What is the difference? Rating Assurance Rating and Rate Assure that appropriate rates are applied to appropriate Assurance for Prepaid transactions Assure that rates are calculated correctly Rate Assurance Assure that appropriate rates are associated with appropriate accounts Assure that rates comply with: Regulatory Marketing Customer Agreement •2 •© Copyright 2010 Rob Mattison Rating Assurance Rating 1. Assure that all rates in system align with advertised Rating in prepaid is the same basic functionality as rating in rates postpaid 2. Assure that all rates in the rating engine align with any Complex rating rules, same assurance points “reference” rating data Nature of rating engine, nature of execution is different 3. 3 Assure that all rates activated align with product authorizations in HLR 4. Assure that unauthorized services will not be utilized 5. Rating accuracy assurance A. Rating audits (like postpaid) B. Parallel Rating Engine •3 •© Copyright 2010 •4 •© Copyright 2010 Rob Mattison Rob Mattison Simple – One Dimensional Plans Time Rate Destination (b.num) Complex Singularity Friends/Family Time Band MSC-CDR •CDR Serial # Cross Product Complexity •A.num IN-CDR SMS and Voice Voice and Data •B.num •Duration •Bill Rate •A.num •Total charge •B.num •Start Time •End Time •Duration •Bill Rate Extremely Complex •Total charge Ranges / Bands Location Based Promotion Based Physically Order Subsidized •Start Time •End Time •6 •© Copyright 2010 Rob Mattison Rob Mattison © 2011 Rob Mattison www.ra-academy.org 149 of 364
- 185. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Rating The Prepaid Rating Tree Rating Engine International Rates Master Master Wallet Wallet Promotion Sub Wallet #1 Balance Sub Wallet #1 Sub Wallet #2 Friends Sub Wallet #2 Family Reference Table Sub Wallet #3 Sub Wallet #3 Sub Wallet #4 Sub Wallet #4 •7 •© Copyright 2010 •8 •© Copyright 2010 Rob Mattison Rob Mattison Rating Engine International Rating Engine International Rates Rates Master Master Wallet Wallet Promotion Promotion Sub Wallet #1 Balance Sub Wallet #1 Balance Sub Wallet #2 Friends Sub Wallet #2 Friends Family Family Reference Reference Table Table Sub Wallet #3 Sub Wallet #3 Sub Wallet #4 Location Sub Wallet #4 Location Based Based Reference Reference Table Table •9 •© Copyright 2010 •10 •© Copyright 2010 Rob Mattison Rob Mattison Rating Prioritization IN-CDR Rating Engine Advanced IN CDR can hold Checks the conditions of the call request Rate Plan A.Num/B.Num/Other information Wallet ID Check Reference Files (Friends and Family Reference, Location Promotion ID Reference etc.) Open Balance Close Balance Start Time End Time •11 •© Copyright 2010 •12 •© Copyright 2010 Rob Mattison Rob Mattison © 2011 Rob Mattison www.ra-academy.org 150 of 364
- 186. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Rating Rating Assurance Test Calls – How does it work? Test Calls Define the domain of areas to be tested (define Horizontal New Rate Plans Test Domains) New Customers Specific rate plans Autodialers Specific products Especially Critical for complex Specific customers / segments Parallel Rating Engine Define a “test plan” Post Rating Audit Determine what variables need to be included within the test Manual Audit (Selected CDRs) plan Table / SQL Audits Define frequency, range and spread •13 •© Copyright 2010 •14 •Rob Mattison, •Copyright – 2008 GRAPA Rob Mattison Rob Mattison Test Plan Execution Alternative Methods Make the series of test calls at specified times, from specified Manual Method locations to specified locations for specified duration Clip Board, Bus Tokens, Cell Phones Collect transaction information for those periods Automated Method – Call Simulation Generator Determine if calls are captured and reported accurately Simbox in reverse Makes all calls as specified Can include extraction and reconciliation of transaction information automatically •15 •Rob Mattison, •Copyright – 2008 GRAPA •16 •Rob Mattison, •Copyright – 2008 GRAPA Rob Mattison Rob Mattison Parallel Rating Engines SQL Audit Technique Dozens available for sale Load All IN CDR into Table Re-worked billing system Build SQL Commands to test different rates/conditions Using existing billing system Standard Tests Revenue Assurance “systems” Zero Rate CDRs Below Minimum R t CDR B l Mi i Rate CDRs Group By for Wallet Depends upon nature of rerating required Group By for Rate Plan/Promotion Built into test call managers Group by for alternative conditions •17 •© Copyright 2010 •18 •© Copyright 2010 Rob Mattison Rob Mattison © 2011 Rob Mattison www.ra-academy.org 151 of 364
- 187. Revenue Assurance Foundations RAF103: Billing Foundations Prepaid Rating SQL Audit Method Rate Development Rating Analyst Regulatory Compliance Marketing IN CDRs for a Rate Book Compliance Time period Financial Models •19 •© Copyright 2010 •20 •© Copyright 2010 Rob Mattison Rob Mattison Rate Management Lifecycle Marketing Pricing Billing Sales • Develop Specialist Operations Provisioning candidate prices • Approve and • Provision the • Activation of develop pricing billing system rate plan to models with the rates Customer Rate Book •21 •© Copyright 2010 Rob Mattison © 2011 Rob Mattison www.ra-academy.org 152 of 364
- 188. Revenue Assurance Foundations RAF103: Billing Foundations Radius RADIUS History Remote Authentication Dial In User Service (RADIUS) is a networking protocol that provides centralized Authentication, Authorization, and Accounting (AAA) management for computers to connect and use a network service. RADIUS was developed by Livingston Enterprises, Inc., in 1991 as an access server authentication and accounting protocol and later brought i t th I t b ht into the Internet E i i Task Force (IETF) standards.[1] t Engineering T k F t d d Because of the broad support and the ubiquitous nature of the RADIUS protocol, it is often used by ISPs and enterprises to manage access to the Internet or internal networks, wireless networks, and integrated e-mail services. These networks may incorporate modems, DSL, access points, VPNs, network ports, web servers, etc.[2] RADIUS AND DIAMETER IP Billing Remote Authentication Dial In User Service (RADIUS) Where is Radius Applied? Protocol used for providing authentication, authorization and Original DialUp accounting services between an access point and an authentication server. Most IP based systems Provides a central user database that can be accessed by different servers Many modern Variations Authenticates users (validate credentials) Provides configuration information RADIUS server checks for the validity of a user, requesting access to a network. It authorizes the user to access the network, if the information stored in a database is verified 1/21/2011 3 IPDR Movement One industry effort that may facilitate this is the standard IP detail record (IPDR) format being DHCP defined by IPDR.org. bts SERVER The IPDR is intended to be an extensible format that AAA SERVER captures meaningful usage i f i f l information and cost i d ASN BRAS components for any IP-based service. GATEWAY bts A common IPDR would reduce the need for mediation ― at least within the IP world ― by ASN(RADIO) HOME ACCESS pushing consistent representation down to the device SERVER level. CSN (NETWORK) © 2011 Rob Mattison www.ra-academy.org 153 of 364
- 189. Revenue Assurance Foundations RAF103: Billing Foundations Radius Accounting Accounting (cont) When network access is granted to the user by the NAS, an When the user's network access is closed, the NAS issues a Accounting Start (a RADIUS Accounting Request packet containing an final Accounting Stop record (a RADIUS Accounting Request Acct-Status-Type attribute with the value start) is sent by the NAS packet containing an Acct-Status-Type attribute with the to the RADIUS server to signal the start of the user's network access. value stop) to the RADIUS server Start records typically contain the user's identification, network address, point of attachment and a unique session identifier. Provides information on the final usage in terms of time, Periodically, Interim Update records (a RADIUS Accounting Request packets transferred, data transferred, reason for disconnect transferred transferred packet containing an Acct-Status-Type attribute with the value and other information related to the user's network access. interim-update) may be sent by the NAS to the RADIUS server, to The client sends Accounting-Request packets until it receives update it on the status of an active session. an Accounting-Response acknowledgement, using some retry Interim records typically convey the current session duration and interval. information on current data usage. The primary purpose of this data is that the user can be billed accordingly; the data is also commonly used for statistical purposes and for general network monitoring. Radius vs Diameter The RADIUS protocol (Remote Access Dial In User Services) has been widely and successfully deployed to provide authentication, authorization, and accounting (AAA) services for dial-up PPP/IP and Mobile IP access access. However, inherent shortcomings of the RADIUS protocol have limited its ability to adapt to the ever-increasing capabilities of routers and network access servers, and the ever-expanding set of desired AAA services. AAA Server Diameter An AAA server is a server program that handles Backwards compatible next generation Radius user requests for access to computer resources Server authentication, authorization, and Accounting services. A ti i The AAA server typically interacts with network access and gateway servers and with databases and directories containing user information. The current standard by which devices or applications communicate with an AAA server is the Remote Authentication Dial-In User Service (RADIUS). © 2011 Rob Mattison www.ra-academy.org 154 of 364
- 190. Revenue Assurance Foundations RAF103: Billing Foundations Radius EAP EAP Methods IEEE 802.1x has introduced three entities: supplicant An EAP packet has four fields: code, identifier, length, and data. EAP constitutes bidirectional communication between (user device), authenticator (ASN-GW in WiMAX), supplicant and authentication server. authentication server (RADIUS server). EAP security varies depending on the EAP method selected: EAP-TLS, The goal of 802.1x/EAP is to distribute the shared g / PEAP, PEAP key (master key) between the supplicant and the EAP-TTLS, authentication server. EAP-FAST [RFC4851], EAP-SIM, EAPAKA, EAP-MD5, EAP-PSK, EAP-IKEv2, etc. EAP-TTLS EAP-TTLS employs tunneled TLS and removes the need of Radius Diameter client authentication but server authentication to client is required. UDP Protocol TCP / STCP Protocol EAP-TTLS introduces a TTLS server which establishes a secure Application Driven Application Driven tunnel to authenticate the client. The tunnel provides protectionfrom eavesdropping and man- Th t l id t ti f d i d in-the-middle attack. TTLS server is responsible to transmit AVPs sent by client to the AAA server. EAP-TTLS also provides supplicant identity protection and data ciphering suite negotiation in addition to the features offered by EAP-TLS Authentication Protocols Authorization capabilities NAIs (Network Access Identifier), According to RFC 3127 both RADIUS and Diameter CHAP (Challenge Handshake Authentication offer some support for access rules, authorization Protocol), restrictions, and filters. EAP (Extensible Authentication Protocol) and Protocol), Neither of them meets the requirements concerning q g PAP (Password Authentication Protocol); this area totally, but for example the abilities of proxy brokers to deny access are good in both protocols. . © 2011 Rob Mattison www.ra-academy.org 155 of 364
- 191. Revenue Assurance Foundations RAF103: Billing Foundations Radius Accounting capabilities Server-initiated messages Basic accounting capabilities of RADIUS and Diameter are RADIUS specification does not support server- similar. Internetworking real-time accounting capabilties initiated messages. Account reporting happens synchronously with events in a time- RADIUS acts a pure client-server implementation: scale of seconds. Accounting Acco nting timestamps the client makes a request, and the server replies. q , p Dynamic accounting - that is, accounting for dynamic authentication and authorization. Guaranteed delivery of accounting information with application Credit limit/ account suspension will not be forced level acknowledgements, to client until next poll Extensible accounting records. The delivery mechanisms relates to the retransmission procedure and the protocol extensibility Error Handling Radius Authentication RADIUS does not support error messages. When faults occur, RADIUS simply silently discards packets - drops them without further processing. RADIUS entity authentication applies only between This applies for example to packets with an unknown code, or packets the length of which is shorter than it says on the length field. two adjacent nodes. In other words, invalid packets are always silently discarded. [1] Thus there is no end-to-end authentication with Diameter has an error reporting mechanism. p y proxy RADIUS. Diameter messages are silently discarded only, when it is the most suitable way to solve the problem. RADIUS authentication scheme is based on the For example received duplicate answers are still silently discarded. [2] Application error messages are informational, concept of shared secrets, where each two directly Tell about a transient or permanent failure - or even about success. communicating parties must have a shared secret. Error explanation is stored in Result-Code AVP read by the peer the message of which originated the error. Protocol errors are procedural / routing related Report on the way that each proxy and relay agent on the transfer path may try to correct the error. Presence of protocol errors is always stated in the protocol header as one of the control bits, the E bit, set. Diameter authentication UDR Diameter's hop-by-hop authentication is guaranteed by TLS or IPSec. In offline accounting, packet data accounting has a They both provide security across a transport connection as long as tiered architecture: there are no untrusted third party agents on the transport path. Airlink and IPlink records. End-to-end security Airlink records are mainly number of bytes/packets Diameter agents complicate the entity authentication procedure. dropped at the BS. As data is routed via relaysor proxies the former authentication method proxies, is not sufcient any more. The serving ASN merges Airlink and IPlink records into User However, Diameter's end-to-end security framework provide Data Records (UDRs) and sends to home AAA server. message origin authentication also when there are relays or proxies UDR is created when the R6 connection is established. UDR present. can be transferred when there is handover. The security offered by translation agents depends on the other ASN uses RADIUS-Accounting-Request-Start and RADIUS- protocol as well Accounting-Request-Stop messages to start and stop the accounting in the server © 2011 Rob Mattison www.ra-academy.org 156 of 364
- 192. Revenue Assurance Foundations RAF103: Billing Foundations Radius Real Time Accounting Online accounting on the other hand introduces a packet data service with fixed volume and duration in advance. Account status is stored in a prepaid server residing in the home CSN in connection with Home AAA server. Prepaid client (PPC) that can reside either in ASN or CSN is responsible to track the traffic per user. Tariff switching is also possible to change the tariff for different time of a day. Account balance is updated by the Home AAA or Prepaid Server (PPS) according to the consumption. RADIUS-Access-Accept message coming from the server is relayed to the PPC to inform the user about the remaining balance. © 2011 Rob Mattison www.ra-academy.org 157 of 364
- 193. Revenue Assurance Foundations RAF103: Billing Foundations Convergent Billing Systems Definitional Challenges? • What is a convergent billing system? • Many definitions Convergent Billing Systems • What does it mean? ▫ Prepaid ▫ Postpaid • Consolidate multiple • Make it possible to bill • Perform all rating in products, lines multiple products / one location, using • Make is easy for services / vendors from one consistent customer / operations to track overall status one integrated billing management platform method • Real Time – always Alternative Definitions of Convergent of customer account • Converge technology and partner the same • Rate once – rate right Billing Systems Line of • LOB Convergence Reporting Rating ▫ Pulling all LOB records into one bill Business ▫ Putting CDR’s for all lines of business through one billing y system • Prepaid –Postpaid • Consolidate the different • Consolidate the ▫ US/European Model for Prepaid credit status’s of customers management of accounts / accounts • Integrated view of • Convergent Rating Engine • Prepaid / Postpaid and Flex accounts, services ▫ Real Time and Singletary Rating for Postpaid/Credit Pay • Web / App Based Accounts • Account Management Convergence Credit / ▫ Web , USSD, IVR, Call Center, Agent, POS, Accounting Account based, integrated management of Accounts (corporate and Payment Mgmt consumer) Method Sections Convergent Sourcing • Part I • Most prevalent in Eu/Us ▫ Convergent Sourcing US/Europe Based • Only critical when postpaid billing (invoiced Large Multi-Line Telco Problem billing) is dominant ▫ Prepaid-Postpaid US/European Model • Becoming critical for VNO and Multi-Line , • Part II Triple Play bundling programs ▫ Convergent Rating Engine Most common definition of the term ▫ Hyper-Convergence Integration of CRM/Billing/Provisioning The “holy grail’ of telco billing © 2011 Rob Mattison www.ra-academy.org 158 of 364
- 194. Revenue Assurance Foundations RAF103: Billing Foundations Convergent Billing Systems The Line of Business Convergence What is the problem? Challenge • Multiple billing systems • Multiple technologies • Multiple/Incompatible technical environments • Multiple partners • New technologies / Content / Services do not • Multiple business models conform with standard billing software/delivery model • Means ▫ Multiple Revenue Streams ▫ Multiple Operational Challenges Traditional billing systems are tied to Phase I : Singletary Universe individual technologies • XDRs ▫ Call detail records (CDRs) are generated by wireline voice switches. • Original Telecoms Model ▫ IP flow records are generated by Cisco routers ▫ PVC traffic history is gathered from ATM and Frame Relay devices. • One Product , One Service, One Price ▫ RADIUS accounting records monitor switched dial-up or ISDN Internet access. g p • Traditional stovepipe billing systems : • Easy to manage revenue stream ▫ gather one type of data, ▫ aggregate it, ▫ apply rates appropriate for the type of service, and ▫ generate single-service invoices • They also may include: ▫ one-time fees and ▫ recurring flat-rate, ▫ usage sensitive, ▫ distance-based, ▫ time-sensitive, and ▫ class-of-service charges. Phase 3 : Need for convergence of Phase 2 : Expansion / Experimentation billing information • As you move into multiple lines of business • GRAPA – Billing Access Architecture trend is to: • GRAPA – Content Model Architecture ▫ Create separate revenue stream billing models stream, • Separate Bills • Consolidated Bill ▫ Derived from multiple revenue/billing streams © 2011 Rob Mattison www.ra-academy.org 159 of 364
- 195. Revenue Assurance Foundations RAF103: Billing Foundations Convergent Billing Systems Billing Assurance ▫ AA(A) risks Approaches to the problem Unauthenticated access Unauthorized access ▫ Transaction Integrity Risks • Source Consolidation Transaction Capture/Transaction Transport ▫ Convert so that all sources feed into one billing Prepaid (Switch / ss7 / SIP / IN) Postpaid (Switch / CDR / Mediation / Biling) system ▫ R ti Risks Rating Ri k • Stapling Does rating occur correctly ▫ Rating Reference Risks ▫ Pull together disparate “finished bills” and re- Is all rating reference information correct and timely write them as if they were one ▫ Revenue Capture and Application Risk Channel Assurance / Application to Acct Mgmt System / Collections / Credit Risk ▫ Revenue Recognition Risks Risk to Revenue Recognition Integrity Billing Risks and Costs Required Processes (A,B,C) (Billing Assurance) Points of Transaction Capture (1-6) AA(A) Authentication / Authorization Customer Content Content Content Transaction Integrity Provider Invoice Rating Content Content Delivery Invoice Receipt Rating Reference Payment 6 5 3 1 Revenue Capture / Application 4 2 Customer Content Content Revenue Recognition Billing Delivered Reconciliation Received Reconciliation Received vs Invoice vs Accounting Delivered Accounting Content Received C B A Traditional Postpaid Voice Revenue Stream Traditional IP Revenue Stream Set Limit Provisioning Monthly Fee Credit Switch Mgmt Radius Server Collections Postpaid Mgmt CDR Credit Billing Mgmt Postpaid Collections Limits on how to vary offering Mediation Billing Mgmt Cannot bill for variance in amount except with major reclassification © 2011 Rob Mattison www.ra-academy.org 160 of 364
- 196. Revenue Assurance Foundations RAF103: Billing Foundations Convergent Billing Systems Keys to Line of Business Convergence? IPDR Movement • Require an integrated Billing Architecture • One industry effort that may facilitate this is the • Require standardized logging of transactions for standard IP detail record (IPDR) format being Receipt and Delivery of content / service defined by IPDR.org. y g • The IPDR is intended to be an extensible format ▫ Standardized CDR/Log Policy that captures meaningful usage information and ▫ Standardized Mediation a Huge Advantage cost components for any IP-based service. ▫ Standardized Settlement Procedures / Policies • A common IPDR would reduce the need for • Creates Assurance/Control Funnel mediation ― at least within the IP world ― by pushing consistent representation down to the device level. • Billing systems are also responsible for applying: • Billing systems are closely tied to customer care ▫ promotions, systems that enable customer acquisition, ▫ discounts, discounts service order entry, and contact management entry ▫ tax calculations, • Investing in a new stovepipe billing system for ▫ credits and each type of service is an expensive and ▫ adjustments, obviously suboptimal proposition. ▫ handling collections, ▫ account suspension/reactivation due to non- payment, and reporting.. Three Approaches Forensics for Converged LOB • Electronic stapling“: • 1. Standard GRAPA Revenue Mapping Discipline ▫ combines charges already calculated by two or ▫ Inventory of Products/Revenue Streams more stovepipe billing systems onto one bill. ▫ Revenue map for each • Consolidated billing : • 2. Identify points of “divergence” ▫ takes pre-rated data from legacy billing systems, • 3. Consolidate revenue streams then recalculates charges by applying package pricing and discounts to produce a single bill. • 4. Multiple project Plans (will take months) • “Integrated billing“: • 5. Critical to develop “BAA” for all new ▫ takes raw usage data and performs all billing products/services system functions in an aggregated fashion. • 6. This process will have to be performed anyway when a new Converged Billing system is installed. © 2011 Rob Mattison www.ra-academy.org 161 of 364
- 197. Revenue Assurance Foundations RAF103: Billing Foundations Convergent Billing Systems LOB Convergence • Revenue Stream Convergence ▫ Part of GRAPA Standards – Architectural Guidelines ▫ Will yield benefits in: Accuracy Assurance Cost of Ownership ▫ No matter what billing system / service lines you deploy © 2011 Rob Mattison www.ra-academy.org 162 of 364
- 198. Revenue Assurance Foundations RAF103: Billing Foundations Convergent Billing Systems Part II Alternative Definitions of Convergent Billing Systems • Convergent Rating Engine ▫ Real Time and Singletary Rating for Convergent Billing Systems Postpaid/Credit Accounts • Account Management Convergence PART II ▫ Web , USSD, IVR, Call Center, Agent, POS, Accounting based, integrated management of Accounts (corporate and consumer) Convergent Billing System Models • is a combination of an application and a database • Postpaid BackBill Model designed in such a way that it facilitates collection ▫ Original prepaid systems and transfer of information about customers, which , ▫ Really fast CDR Processing is then used by operators for business purposes. • Bill Once – IN • The clearing system is specific for each line of ▫ Bill everything on IN business. It might be a simple system based on invoices or e-invoices and used on a daily basis in all kinds of stores or a system of monthly bills for such public services as the Internet or telephone. Rating Architecture (Primary) Primary Rating Engine Bill Once – IN (Variations) • Bill Once – Balance Based ▫ Top Up account in advance for Postpaid ▫ Check Balance at end of period for invoicing • Bill Once – Rate Twice CDR ▫ Use MSC CDRs to create invoice ▫ Use IN CDRs to create invoice © 2011 Rob Mattison www.ra-academy.org 163 of 364
- 199. Revenue Assurance Foundations RAF103: Billing Foundations Convergent Billing Systems Part II Convergence Dimensions • LOB • Billing Mode Secondary Rating E i S d R ti Engine ▫ Credit|Rating • Operational Convergence ▫ Provisioning|MACD|Marketing|Accounting CDR Mediation Billing LOB Billing Mode Code • Which products and services will be supported? • What are the different was that Credit , Payment • What kinds of bundles? and Rating will be managed? • What kinds of cross-revenue stream offerings • IP • Part 1 – credit/payment method • Video • Part 2 – rating / update method • Broadcast • Special Order • Packet • Voice • Example : • Sales of Equipment ▫ Credit Mode|Rating Mode Billing mode codes: Operational Convergence • Prepaid|Prepaid ▫ Customer “tops up” balance in advance • What are the ways that the customer can ▫ All rating is applied immediately ▫ Provision a service ▫ No credit is extended ▫ Uses prepaid billing system (Real Time SS7) ▫ Activate a service • Prepaid|Postpaid ▫ Customer pays in advance (US/EU Model) ▫ Make changes to a configuration (MACD) ▫ Rating applied at the end of month ▫ Change Accounting Terms ▫ Credit can be extended ▫ Using Postpaid Billing System (Batch CDR’s) ▫ Change Credit Agreement • Postpaid|Prepaid ▫ Customer pays in advance (monthly/deposit) – credited to IN ▫ Billing is real time off of IN • Postpaid|Postpaid ▫ Traditional pure postpaid model • Hybrid (variance within these boundaries) © 2011 Rob Mattison www.ra-academy.org 164 of 364
- 200. Revenue Assurance Foundations RAF103: Billing Foundations Convergent Billing Systems Part II Systematic approach for convergent billing system LOB Analysis • Identify the products and services to be supported • Decomposition ▫ Revenue Stream analysis / Revenue Maps • Analysis ▫ Revenue amounts (forecast/actual) • Assessment • Identify the topology, AAA, Billing Architecture for • Assurance each LOB • Understand the : ▫ Point of Transaction Capture ▫ Potential Points of Control ▫ Standard Control Points Required Processes (A,B,C) Points of Transaction Capture (1-6) Determine Customer Content • How each will or can be billed Content Content Provider Invoice Content • Feedback loops Content Delivery Receipt Invoice ▫ Transaction Capture Payment ▫ Credit/Service cut off loop 6 5 3 1 ▫ Payment Loops 4 2 Customer Content Content Billing Delivered Reconciliation Received vs Received Reconciliation Invoice vs • Be sure loops are closed Accounting Delivered Accounting Content Received C B A Post Paid – Operational Charter Pre Paid – Operational Charter • Customer Identity Verification • Traffic Management • Credit Process • Channel Management ▫ How do you set the credit limit for a customer? ▫ Customer Identity / KYC ▫ How do you monitor the credit extended? Credit Exposure Calculation (Rating )and Accumulating Balance ▫ Voucher/Token Management ▫ How do you “cut off” the customer? Generation and Accounting • I Invoicing Process i i P Storage, Distribution St Di t ib ti ▫ Collection and Storage of Transaction Information Receivables Management ▫ Invoice Calculation (rating) ▫ Revenue Recognition • Rating Management ▫ Invoice Generation • Account Management • Collections Process ▫ Collection and Storage of Balance Information ▫ Tracking Invoices ▫ Applying Payments ▫ Balance Decrement (rating) ▫ Escalating Non-Payment / Partial Payment ▫ Balance Manipulation (transfer/adjustment) ▫ Accounts Receivables Management ▫ Revenue Recognition • Dunning Process (collecting when overdue) © 2011 Rob Mattison www.ra-academy.org 165 of 364
- 201. Revenue Assurance Foundations RAF103: Billing Foundations Convergent Billing Systems Part II Traditional Post Paid Billing Architecture Hybrid Systems (typical) • Maintain different status’s for different “parts” • Billing Cycle of the customers account ▫ Transactions at switch • Allow both Post/Pre paid business arrangements ▫ Generate CDR ▫ SwitchCDR to Mediation ▫ MedationCDR to Postpaid Billing ▫ PostPaidBillingCDR to Generate Invoice • Collections Cycle • Dunning Cycle • Credit Management Cycle 21 22 The Collections Process Credit Policy Management • Collections can be a critical point of revenue • Credit Policy: leakage for the company ▫ The terms established by your company regarding • There are two aspects: how much credit to grant to a customer / partner ▫ Not taking on accounts that result in collections ▫ Credit policy leads to a “don’t sell to them” or activity (credit policy) “don’t partner with them” threshold decision ▫ Not spending too much money on collections activity (dunning policy) 23 24 The Credit Management Process Ranking Challenge Define “risk classes” for logical groups of customers • How to work the ranking mechanism into the (partners) Define criteria in order to rank each customer or partner sales process Determine a mechanism for assessing the risk level • How to be sure that sales people do not “abuse” abuse associated with prospects Write and enforce credit risk assessment policies the mechanism in order to gain more immediate Examine the “risk portfolio” and make adjustments to sales credit level based upon risk exposure and history © 2011 Rob Mattison www.ra-academy.org 166 of 364
- 202. Revenue Assurance Foundations RAF103: Billing Foundations Convergent Billing Systems Part II Pre Paid – Operational Charter • Traffic Management Common Architecture • Channel Management ▫ Customer Identity / KYC • 1. Network Architecture ▫ Voucher/Token Management ▫ Authentication Generation and Accounting Storage, Distribution St Di t ib ti ▫ Authorization Receivables Management • 2. Rating Architecture • Rating Management ▫ (May be redundant/duplicated per agreement • Account Management type) ▫ Collection and Storage of Balance Information • 3. CDR (Audit) Accounting ▫ Balance Decrement (rating) ▫ Balance Manipulation (transfer/adjustment) ▫ (Same trail, different usage) ▫ Revenue Recognition Network Architecture Rating Architecture • Network Architecture SHOULD BE the same for • The Rating Architecture, like the network both forms of agreement. architecture, should be the same for both • Assumption of Authentication billing/agreement models models. • Authorization (HLR – Account status/settings) • Care must be taken to understand the can be extremely complex VLR/HLR/IN integrity and relationships as ▫ Especially challenging for wireline where no HLR these are often “kludged” for the convergent solution, leaving prone to errors Credit Rating Assurance Monitoring • Rating Assurance CDR ▫ Test calls ▫ Parallel Rating Engine Credit Mediation Management ▫ Data Warehouse (RATE TYPE / RATE CLASS) ▫ IN CDR vs MSC CDR • Rate Assurance ▫ Multiple Locations ? – Multiple Assurance Collections Invoicing • Out of synch condition common / deadly © 2011 Rob Mattison www.ra-academy.org 167 of 364
- 203. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Mobile payment • Rapidly-adopting alternative payment method – especially in Asia and Europe. • Instead of paying with cash, check or credit cards, a consumer can use a mobile phone to , p Mobile Payment pay for wide range of services and digital or hard goods such as: – Music, videos, ringtones, online game subscription or items, wallapers and other digital goods. – Transportation fare (bus, subway or train), parking meters and other services – Books, magazines, tickets and other hard goods. 1/21/2011 2 Premium SMS/USSD based Mobile payment transactional payments • The consumer sends a payment request via an • Europe and Asia. – SMS text message or an – USSD to a short code and a premium charge is applied to • Combined market $60B globally by their phone bill or their . The merchant involved is informed of the payment success and can then release the paid for 2013 goods. • Since a trusted delivery address has typically not • Some mobile payment solutions are also been given these goods are most frequently digital used in developing countries for with the merchant replying using a Multimedia Messaging Service to deliver the purchased music, micropayments. ringtones, wallpapers etc. • A Multimedia Messaging Service can also deliver barcodes which can then be scanned for confirmation of payment by a merchant. This is used as an electronic ticket for access to cinemas and events or to collect hard goods 1/21/2011 3 1/21/2011 4 Direct Mobile Billing Mobile web payments (WAP) • The consumer uses the mobile billing option during checkout at an e- • Uses web pages displayed or additional applications downloaded and commerce site--such as an online gaming site--to make a payment. installed on the mobile phone to make a payment. • After two-factor authentication involving a PIN and One-Time- • Uses WAP (Wireless Application Protocol) as underlying technology and Password, the consumer's mobile account is charged for the thus inherits all the advantages and disadvantages of WAP. purchase. – Follow-on sales where the mobile web payment can lead back to a store or to other goods the consumer may like. • It is a true alternative payment method that does not require the use of credit/debit cards or pre-registration at an online payment – High customer satisfaction from quick and predictable payments solution such as PayPal, thus bypassing banks and credit card – Ease of use from a familiar set of online payment pages companies altogether. p g – However, unless the mobile account is directly charged through a mobile network operator the use of a credit/debit card or pre-registration at operator, pre registration • This type of mobile payment method, which is extremely prevalent online payment solution such as PayPal is still required just as in a desktop and popular in Asia, provides the following benefits: environment. – Security - Two-factor authentication and a risk management engine – Mobile web payment methods are now being mandated by a number of prevents fraud. mobile network operators. – Convenience - No pre-registration and no new mobile software is – A number of different actual payment mechanisms can be used behind a required. consistent set of web pages. – Easy - It's just another option during the checkout process. – Fast - Most transactions are completed in less than 10 seconds. – Proven - 70% of all digital content purchased online in some parts of Asia uses the Direct Mobile Billing method 1/21/2011 5 1/21/2011 6 © 2011 Rob Mattison www.ra-academy.org 168 of 364
- 204. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Direct operator billing Online • A direct connection to the operator billing platform requires integration with the operator, but provides a number of • Online companies : benefits: – Simplicity - the operators already have a billing relationship with – PayPal, the consumers – Instantaneous payments giving the highest customer satisfaction – Amazon and – Accurate responses showing success and reasons for failure (no money for example) – Google Checkout – Security to protect payment details and consumer identity – Best conversion rates from a single click-to-buy and no need to enter any further payment details. • Have mobile options. – Reliability that builds confidence – Reduced customer support costs for merchants and operators • These require customers to register – Higher payout rates with operators such as Vodafone in the UK delivering up to 86% in some cases with a personal PIN 1/21/2011 7 1/21/2011 8 European NFC Consumer versus merchant initiated • Use contactless payment over mobile phones to pay for on- and • Payments can be initiated by both the consumer or off-street parking in specially demarcated areas. the merchant, although consumer payment is • Parking wardens may enforce the parkings by license plate, becoming the most common since it suits the personal transponder tags or barcode stickers. nature of mobile devices. • First conceptualized in the 1990s, the technology has seen commercial use in this century in both Scandinavia and Estonia. – Consumer focused - The consumer chooses to make a mobile payment. • End users benefit from the convenience of being able to pay for • Use mobile device to authenticate and authorize payment. parking from the comfort of their car with their mobile phone, and parking operators are not obliged t i d ki t t bli d to invest i either t in ith • Presented with status showing confirmation or failure w/reason. existing or new street-based parking infrastructures. • Extensions to this include Near Field Communications or • Parking wardens maintain order in these systems by license Contactless Payment options using additional hardware built plate, transponder tags or barcode stickers or they read a into the mobile phone. digital display with their eyes in the same way as they read a – Merchant focused - This is similar to the consumer focused pay and display receipt. scenario, however the transaction is entered and completed by the merchant (or their representative). This is similar to Mobile EFTPOS except it is processed via a mobile phone/device. 1/21/2011 9 1/21/2011 10 PHILIPPINES Example – case • Once a month, 24-year-old Jane Manarang drops by the McDonald's in • In November 2004 her busy Manila neighborhood, but she's not there for a burger and fries. • Globe Telecom - a Philippine cellular phone • Instead, she is stopping by to cash an electronic check. operator, explained their G-Cash product and • Her husband, a teller at Forex International in Hong Kong, sends a portion of his salary to Manarang using a new mobile-phone-based cash its myriad applications • remittance service called SMART Padala. His Hong Kong remittance company sends a text message to Jane's • These applications included • phone, crediting the money to her cellular phone account. Then she transfers the credit to McDonald's cellular phone account – retail sales, through her phone, and gives her the money, taking a percentage of the amount cashed as a fee. – loading of prepaid airtime over the air peer-to- • It's a great deal for Manarang and her husband, Glenn, because it costs much less than the $5 Glenn would pay for a wire transfer. peer cash transfer in an easy, safe, convenient • For amounts above $180, Manarang gets a free Big Mac meal to boot. manner. It's so fast, marvels Manarang. I receive a text message, and I can quickly get cash. 1/21/2011 11 1/21/2011 12 © 2011 Rob Mattison www.ra-academy.org 169 of 364
- 205. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Philippine Bureau of Internal A Well-Designed Revenue (BIR) Regulatory System • With Globes’ G-Cash originally teamed up to permit • Money launderers do not have a significant entry at Philippine taxpayers to make payment via cell phone. current Philippine standards that we know of, even as • The pilot was successful launched in January 2005 as this could, and most likely will, change within the PAYBIR. next year as the technology evolves and 3G capable • The BIR has since signed up SMARTs - SMART money phones bring the Internet to the cellular phone program and is in discussions with other value transfer p providers to expand the system. p y m handset. • The wireless payment system permits a convenient and – Rampant use of false identification, more transparent way to pay taxes. – Purchase of wireless value transfer services from others, • The same concept could be applied to micropayments for – Renting of services to others and the other government services including border crossings – Lack of adequate law enforcement authority to examine within the region. abuses in the system • This payment system would reduce the possibility of – Make the possibility of undetected abuse by money graft and the risk posed to drivers who carry large launderers probable. amounts of cash to pay border fees. 1/21/2011 13 1/21/2011 14 SMART SMART Load. Telecommunications • SMART Buddy m-commerce technology platform • In 2000, via a joint venture with Banco de Oro called SMART Load. (BDO), SMART Telecommunications Inc. introduced • Transferring pre-paid airtime from a retail merchant MasterCard SMART Money70, or other reseller to a pre-paid phone customer, • SMART Money allows users to transfer money from a allows the consumer to make “cash” payments to the bank account to a mobile phone. retailer. • Permitting payments as small as P30 (US$.54) and gp y ( $ ) • Value on the phone can be used like a debit card to P60 (US$1.07), SMART launched the first pre-paid $ pay for goods and services at a number of retailers cellular phone subscriber service created for the and merchants. “base of the pyramid” (BOP) market. • Cash can also be transferred from one SMART • Advertised as “telecom in sachets”, it was followed in Money account to another via short message system December of the same year by denomination loads of (SMS). P2 (US$.03) and P5 (US$.08). 1/21/2011 15 1/21/2011 16 Padala • Using “sari-saris” as well as high-end • In August 2004, SMART introduced the first international text-based remittance system retailers provided SMART with a called SMART Padala. ready-made distribution chain known • SMART relied on existing international bank and trusted by the market to sell its partners and retail outlets to distribute its product. services to the consumer consumer. • SMART provides cell phones to the remitting agents, • The agents in turn send money through the phones to the recipient’s account via an electronic wire transfer. 1/21/2011 17 1/21/2011 18 © 2011 Rob Mattison www.ra-academy.org 170 of 364
- 206. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking How SMART’s services GLOBE Telecom are regulated • Coming late to the wireless application market, Globe realized it • SMART value transfer services are tied to Banco de Oro banking faced significant competition with SMART. support and basically acts as the latter’s communication support. • However, instead of attacking the small transfer and • Bangko Sentral ng Pilipinas (BSP) regulates SMART’s services as it remittance market head on with a bank-centric model, Globe would the services of a bank. approached it from a telecommunication centric model. • KYC and clearing/settlement purposes, is viewed as bank-centric. • By offering micropayment capability, sachet packaging of • It is viewed as a bank-centric model because all value transfer airtime and value transfer together with low cost cellphones subscribers need to have accounts/access cards and also have (phones are available to rent for pesos a day or own for a few customer due diligence preformed by Banco de Oro or other banking g p y g partners. dollars depending on the type) type), • Because of its banking status the limits are higher, a PhP50, 000 • Globe’s creative entrepreneurial spirit resulted in a small ($1,000) a day limit per subscriber with maximum of PhP 20,000 payment model designed to meet the critical needs of its ($400) for ATM withdrawal and merchandise purchases and PhP 10,000 consumer base. for cash withdrawals at points of sale. • Other than the daily wallet size, there are no monthly or annual limits on transactions. 1/21/2011 19 1/21/2011 20 G-Cash/G-Exchange How Globe is Regulated • A wholly-owned subsidiary of Globe Telecom, launched its product line in November 2004 with 20,000 subscribers. • Globe worked from the start with the Bangko Sentral ng • By January 2006, Globe was boasting 1.2 million subscribers. Pilipinas (BSP) (i.e. Central Bank) and AMLC to overcome any • Globe’s premiere product, G-Cash is premised on the patent concerns about a telecommunications carrier appearing to pending technology platform Share-A-Load. provide financial services. • Text messaging is a throwaway technology built into the GSM • The regulators accepted Globe as a Money Service Business specifications that no one ever thought would be a moneymaking (MSB)81—a non-bank financial institution or money services service. business. • Ironically, sending payment instructions or transferring value • It complied with anti-money l li d ith ti laundering l d i laws b setting li it on by tti limits via text now is the engine driving adoption of cellular phone transfer and loads. Though a wallet can store as little as one mobile commerce. peso, the maximum a subscriber can transfer at one time is 10,000 pesos ($200) or a maximum of 40,000 pesos ($800) a day and 100,000 ($2,000) pesos per month. 1/21/2011 21 1/21/2011 22 Closed Systems M-PESA • The advantage of both the SMART bank-centric and Globe telecom- • (M for mobile, pesa is Swahili for money) is the product name of centric model for regulators and law enforcement is that these are a mobile-phone based money transfer service closed systems. • M-PESA is a service which allows microfinance borrowers to • The registered users stay within their unique systems. conveniently receive and repay loans using the network of • This permits basic KYC techniques, transaction monitoring for criminal Safaricom airtime resellers activity, and a point of contact to which regulators and the public can refer to resolve issues. • Microfinance institutions (MFIs) could offer more competitive • Japan, a leader in mobile technology, uses a similar system, which is loan rates to their users, as there is a reduced cost of dealing bank-centric. in cash. • So long as these systems stay in place, governments will have a way to • Th users of the service gain through being able to track th i The f th i i th hb i bl t t k their regulate and oversee commerce and financial activity. finances more easily. • So long as mobile value transfer system remain in one country and are • M-PESA is a branchless banking service, meaning that it is closed-looped (meaning the service providers digital value stays within designed to enable users to complete basic banking transactions their system only) then, service providers, regulators and law without the need to visit a bank branch enforcement can oversee the service. • The continuing success of M-PESA, in Kenya, has been due to the creation of a highly popular, affordable payment service with only limited involvement of a bank 1/21/2011 23 1/21/2011 24 © 2011 Rob Mattison www.ra-academy.org 171 of 364
- 207. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking M-PESA Customers can M-Pesa Technology • Deposit and withdraw money from a network of agents that includes airtime resellers and retail outlets acting as banking • Safaricom agents. • M-PESA is operated by Safaricom which is not classed as a – SIM toolkit deposit-taking institution (such as a bank). • Therefore, M-PESA may not be advertised as a banking service • Vodacom • The service enables its users to: – Deposit and withdraw money, p y – USSD – Transfer money to other users and non-users, – Pay bills, – Purchase airtime • Safaricom uses SIM toolkit to provide handset menus for accessing the service, Vodacom relies on USSD to provide users with menus [ 1/21/2011 25 1/21/2011 26 Deployment Mobile Suica • Service for Osaifu Keitai mobile phones, first launched on January 28, • Kenya 2006 by NTT DoCoMo and au in Japan, and now also offered by SoftBank Mobile and Willcom. • Tanzania • Suica is a prepaid rechargeable contactless smart card mainly used to pay for fares on the JR East railway network. • Afghanistan • Just like traditional Suica cards, Mobile Suica can also be charged when the remaining balance gets low. • Other features supported by the mobile phone includes the ability to review past Suica transactions via the mobile's display. • Suica uses Sony's FeliCa chip for its main functionalities. • Egypt • • Mobile Suica interacts with the FeliCa chip using Java technology. Since October 2006, it is possible to register for Mobile Suica using • S. Africa • any major credit card, a Suica VIEW card is no longer required. A limited e-money only application called Easy Mobile Suica (which does not require a credit card) was also launched in late October 2006 • India 1/21/2011 27 1/21/2011 28 Zong • International mobile payments platform, connected with 67 mobile operators in 13 countries. • Market Social Networks and Online Games. • Younger demographic, who doesn't have bank accounts or credit cards and want to complete small purchases online. • Pay with mobile device and are then charged on their account through their mobile operators. • Successful in conjunction with the purchase of online virtual goods •Global mobile payment division of mobile monetization company, Echovox. 1/21/2011 29 © 2011 Rob Mattison www.ra-academy.org 172 of 364
- 208. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Part II Mbanking RA Issues Protect the New Re-Assurance (is the old protected?) Revenue Assurance for the new revenue streams Each transaction represents revenue Each Revenue Transaction needs to be assured Product Assurance Does the system work with integrity Loss of money Loss of prestige Regulatory Exposure Fraud Risks MBANKING Theft of money Value Creation Re-Assurance Operational Model Objective Mbanking Business Functions Assurance that nothing about the implementation of the Partner Relationship Management Bank Relationships Mbanking system is going to threaten or weaken the ATM Relationships integrity of current revenue management activities Credit Card Merchant Relationships Agent Relationships Customer Relationships Product Development and Support Advertising and Promotion Customer Service Accounting, Finance, Regulatory Compliance Partner Relationship Management Partner/Participant Types Recruit Partners Carriers / Opcos Make Deals (Interconnect Agreements) Banks (ATM) Technical Vendors Business Model (Commissions Fees Promotions (Commissions, Fees, Promotions, Agents A t Exclusivity) Consumers Exchange Boundaries (See Content Assurance) (See VNO / Outsource Assurance) © 2011 Rob Mattison www.ra-academy.org 173 of 364
- 209. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Part II Customer Relationship Management Accounting, Finance, Regulatory Marketing Large requirement for financial reporting and Create products/services management Packet, price and promote Compliance to government, banking and telecoms Administration regulatory integrity g y g y Register and activate customers Yet to be fully defined (but it will be) Service verification Regulatory Overlap Billing and assurance Credit Card, Bank, Merchant Ecommerce, ATM Reporting Troubleshooting, adjustments, complaints Functional Breakdown Applications Architecture Participant Management Partner Management Wallet Management Customer Management Business Management Transaction M T ti Managementt Reporting and reconciliation R ti d ili ti Operations, Administration and Maintenance Participant Management Account Management (Wallet) Register and manage participants (entities) Manage the amounts in, and handling of End to end management of function customer/partner wallets (accounts) Different types of accounts, will have different functions and integrity rules associated Consumer Bank ATM Store / POS Gateway Etc. © 2011 Rob Mattison www.ra-academy.org 174 of 364
- 210. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Part II Reporting Requirements Activity Reporting (CDR’s) Daily An MBANKING system must have the equivalent of Activity reports for each a CDR (TDR – Transaction Data Record) for each Consumer transaction in the system Partner This will be required for audit, reconciliation, q , , Channel / Hierarchy reporting Account (Wallet) This is NOT LIKE Voice, where a “lost cdr” is no big thing. This is Critical and regulatory required Massive frauds can happen for CASH in this environment (CoNVERSION IS EASY) Event Logs: Transaction history Per subscriber Per transaction type Per day / week / month Location wise Per day charge backs Failed transactions CDR’s shall be generated for the activities. The server Balance Inquiry New subscribers added (daily / weekly / monthly) shall support only CDR format which is defined. The Types of subscribers based on profile segments New logins added and their profiles format of the CDR is in the below mentioned order EOD settlement reports and financial position reports ttl t t d fi i l iti t which is tab delimited format format. Nature of services used Subscriber Information Each line represents a record. The description of the Detailed Account / Sub account wise statistics for X year in the following frequencies: Monthly parameter of the CDRs needs to be decided as per Weekly the requirement. Daily Marketing reports Subscriber Transaction Statistics Login, transaction and error logs for the audit purpose Accounting System balancing Reconciliation reports Transaction Reject reports Currency conversion data/report Acquisition/Sales reporting Income i.e. fees, transactions etc. By agent, region, on a weekly and monthly basis Disputes / suspense accounts Subscriber support reporting Account registration Fraud reporting Service performance i.e. adherence to SLAs such as 80% of ie Abnormal account behaviour issues resolved at first attempt, card delivered within 5 days Suspicious transactions etc. Exception reports (activity flagged by fraud rules) Portfolio reporting Fraud data match i.e. known fraudsters, duplicate account details etc. Account usage and behaviour Average amount, number of transactions per month System reporting Account maintenance reports Transaction Type i.e. merchant sale, phone top-up, P2P etc. User activity logs Merchant volume © 2011 Rob Mattison www.ra-academy.org 175 of 364
- 211. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Part II Operations, Administration and Operations Manual control on applications – start stop Management Monitoring system performance Back-up restore operations Alarms Alerts – SNMP or TCP/IP based Monitoring external interface connectivity Major tasks of OAM are – Event based alarms Audio Alarms Fault Diagnosis and Resolution Visual Alarms Error Reporting Performance Measurements Remote Management Transaction counters No. of requests per bearer channel Routine System Management No. of requests per application types Round the clock Availability Error Logs Transaction failure records Connectivity failure Unauthorized access attempts Intra-platform errors Indirect/Web based GPRS Internet Direct from Mobile Access SMS USSD MSC IVR IVR GPRS WAP SERVER IN-Switch Partner Access Mobile Device MServer Point of Sale Device ATM Web Application Bank Mgmt Customer Wallet Customer Mgmt Bank Wallet Channel Wallet Channel Mgmt POS Wallet POS Mgmt GPRS WAP SERVER © 2011 Rob Mattison www.ra-academy.org 176 of 364
- 212. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Part II USSD Double Login Account Login / Password Globally, USSD is an ideal channel for services such as mobile information, mobile commerce, mobile entertainment and any service that requires interaction between Transaction Login / Password the user and the application, such as mobile banking. mMoney product uses Unstructured Supplementary Service Data (USSD) as one of Protection regardless of Channel/Method of Access its bearer to provide bi-directional session based communications, allowing development of operator-specific supplementary services and providing a variety of applications compatible with nearly all l f li ti tibl ith l ll legacy h d t handsets. Unstructured Supplementary Services Data (USSD) is one of the means of communicating in real time with backend server via GSM network. It is used to send text message between the user and application, similar to SMS. However, in contrast to SMS, USSD is not a store and forward service. USSD can be used in real time applications like, banking, stock trading, airlines insurance related queries etc. However, the mMoney’s USSD bearer product uses a combination of USSD and SMS wherein SMS responses are sent for critical and fund based transactions J2ME SMS Globally, SMS is an most commonly used channel for financial services as in today’s For the mMoney application, the user needs to register with the service fast growing world every class of people are well accustomed to use SMS compared to any other channel for various purposes such as mobile information, mobile provider via the web or at a designated outlet, which could be the bank. commerce, mobile entertainment and any service that requires interaction between After registration, the subscriber downloads the mMoney application on to the user and the application, such as mobile banking. the mobile phone through WAP push, Bluetooth, Data Cable, etc. and activates it by entering the activation code supplied following the The following type of services could be made available through mobiquity™™ SMS Mobile Banking Solutions – registration (optional), which could be sent via SMS, email or the traditional Push – This is a purely one-way interaction and helps the bank to inform subscribers about postal service. various transactions related to his/her account. The alerts that can be sent include but not / The user needs to have a java-enabled phone, with or without a GPRS limited to credit/debit information, salary credit information, bounced cheque alert, connection. Following the download and activation of the mMoney balance below alert along with any marketing or promotional campaigns. application on the mobile phone, the user is enabled to perform mMoney Push-pull – This requires two-way interaction. Bank-customers, usually from the retail segment, can send requests for the services listed in succeeding paragraphs. This is based transactions. The user is also provided with the two types of PIN(s) for on a pre-decided menu and they would receive information on demand like balance making mMoney Transactions. These Pins are Login PIN and Transaction Pin. enquiry, last three transactions, cheque clearance status enquiry etc. For making all the transactions user is required Login PIN but for money The idea of developing the SMS Banking solution is to build a secure and easy to use transfer an additional Transaction PIN is also required. The mMoney client solution that may cater the needs of every segment of the society. Hence Push and application connects to the mobiquity™ server, which in turn communicates Pull both together gives the subscriber the liberty of having their accounts in their with the banking system. hands. STK Functions STK (SIM Toolkit) as a bearer where applications are held on the SIM card of the mobile. SIM Toolkit programmed into the special SIM card essentially enables the Cash In SIM card to drive the mobile handset interface, build up an interactive exchange between a network application and the end user and access or control access to the network. In STK, the SIM card has a proactive role in the handset. This means that Cash Out the SIM initiates commands independently of the handset and the network. STK bearer has very high dependency on the operator as the SIM has to be Cash Transfer changed once the customer registered for the service. Thus, operator’s consent who operator s owns the SIM is mandatory. But it is independent of mobile handset as the SIM Top U T Up carries the STK menu and encryption logic, thus, even if subscriber changes the handset the experience remains same. Payment Out Subscriber can request for any of the mMoney application features by selecting particular transaction option together with mMoney PIN in the STK menu. Once the Payment In subscriber is registered with mobiquity™ then onwards subscriber doesn’t have to enter any critical account or card data as it can be directly sent to the mMoney system in an encrypted format or mMoney system can store it at the back-end and after authentication can communicate the same to third party / merchant switch © 2011 Rob Mattison www.ra-academy.org 177 of 364
- 213. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Part II Cash In Cash Out For accessing fund-based services, every subscriber must have money in the mobiquity™ accounts. Cash-In process provides the facility to credit money into subscriber’s mobiquity™ accounts. mobiquity™ provides the flexibility convenience to their subscribers to make Cash-In transactions by providing various channels like – On occasions, the subscriber needs to get cash-out from the mobiquity™ account through some medium. For this mobiquity™ system can provide a choice of Cash-Out channels to the Walk-In subscriber. The Cash-Out can happen through the following channels – One of the most widely used channel for Cash-In is Walk-In to the various channel partners that accepts cash from subscribers credit them to subscriber’s accounts. mobiquity™ maintained the complete hierarchy of service provider’s channel member to provide the cash –in functionality to their subscribers. Bank Outlets / Bank Accounts Bank Accounts The subscriber can transfer the mobiquity™ balance to their bank account directly for which Existing bank account holders has an option of making Cash-In to their mobiquity™ accounts from their bank accounts directly. They can do it either online or by visiting a bank branch. Alternatively, if the bank account is also mapped to the subscriber’s MSISDN then through mMoney the subscribers can make the transfer using subscriber should have a bank account linked with their mobiquity™ account. the mobile handset. Channel P t Ch l Partner Cards Cash-Out can be done at channel partner. authorized POS or retail outlet within the The subscribers can also deposit money in mobiquity™ account through various cards available in the market. These cards can be prepaid, cash, credit or debit cards. Subscribers just need to transfer their card balance to their mobiquity™ account and that can be done either online or through the mobile handset. regulatory framework of the country. The channel partner can initiate cash-out by entering amount, subscriber’s Wallet number and his own PIN. The mobiquity™ subscriber receives Vouchers notification on his handset and approve/validate by providing the mobiquity™ PIN, then In absence of banking, card and other physical infrastructure, the alternate solution to load the mobiquity™ account could be through the prepaid vouchers. The transaction is sent to mobiquity™ system for processing and both the parties are notified by subscribers will go to a retail outlet and buy the prepaid voucher by paying in cash, which will be available in various denominations. The vouchers will carry a PIN SMS and agent remits the money to the subscriber and when the subscribers will input that PIN through the mobile handset, the amount on the voucher will be credited to the mobiquity™ account as these voucher PIN(s) will be maintained in the mobiquity™ system. Bank / Prepaid Cards Subscribers can also load various cards from their mobiquity™ account, through which they can spend directly or they can withdraw cash at any ATM or utilize the same at a POS. Re-Assurance Domains Re-assurance-AAA AAA Review the status and conditions for the creation of Does the implementation of MBANKING bypass or in any accounts for all ‘parties’ participating in the way compromise current AAA They often “leverage” AAA, but they may create “special mbanking system conditions” Assure that all of them are subject to the same, (or j ,( i.e. – All mbanking agents, banks, pos must have an account and a sim. Do you allow MASS provisioning, or ‘special provisioning’ for more stringent) rules regarding provisioning, these SIMS activation and treatment within the network Are these Real SIMS or Virtual SIMS environment How handled in HLR Will these “special SIMS’ become “free service SIMS” because of HLR – SPECIAL RULES Key Questions Revenue Assurance Domains Classes of Accounts Mbanking Customer – No Voice/Data Revenue Streams Bank For each “product” do we get our proper revenue ATM credit? POS Channel Partnership/Interconnect Assurance p/ Merchant Payouts – Assurance Status Checks Provisioning and Activation PayIns – Assurance Status on HLR Status in Billing Systems Filters / Alarms in Mediation, Postpaid Billing, SMSC, MMSC, IN, WAP Gateway, GPRS Portals © 2011 Rob Mattison www.ra-academy.org 178 of 364
- 214. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Part II Revenue Stream Assurance Partnership Assurance Step 1 : Revenue Inventory Agreement assurance Acquire a list of all transaction/product types For each, understand the exchange (revenue agreement) Settlement assurance Step 2: Forensics Margin Assurance Understand how the transaction happens, how it is captured As per margin vno content assurance controls margin, vno, and how it is applied Step 3: Revenue Stream Controls Capture, Transport, I/O, FSEC, etc. Step 4: Separation, assurance as normal part of billing/rating assurance (just new “rate plans” to be assured) Settlement Reconciliation Debit Card Issuance mobiquity™’s Settlement and Reconciliation module offers service providers a quick, mobiquity™ platform will provide the functionality of ATM card issuance management to provide service provider subscriber the ability to perform ‘basic’ electronic financial transactions on ATM network in a particular geographical area. convenient and comprehensive way to reconcile transactions between the bank accounts of the This requires an ATM interface with the mobiquity™ platform from ATM switch. The scope of the mobiquity™ card source and destination service providers. management covers: Communication between ATM Swich and mobiquity™ in ATM interface message format Settlement and reconciliation typically involves synchronizing financial reports with completed transactions and mobiquity™ system transfers to validate amounts transferred to the bank Message structure which will be exchanged between mobiquity™ and ATM Swtich accounts with the amounts recorded by mobiquity™’s reporting tools. mobiquity™ system On partner ATM network, subscribers will be able to: comes with a reliable settlement system that automatically verifies, records, reports and stores Withdraw cash from their mobiquity™ stored wallet all of daily transactions for accurate and efficient reconciliation. Check their stored wallet balance Change their ATM Card PIN on switch The Settlement Fil f Th S l File format replaces the Hi l h History L fil and offers f Log file d ff functionality, i l di a i li including Switch and mobiquity™, both, adhere to the financial interfaces or any other banking standard messaging formats. The switch dedicated row for each debit and credit in the Settlement File report. In addition, the system provides ATM transaction switching, ATM transaction authorization and card issuing. mobiquity™ subscriber ATM Settlement File formats allow reports to be produced in a customized file format. Transactions that are authorized locally would be sent to mobiquity™ host system for authorization. The mobiquity™ host system would maintain stored Wallet accounts of all mobiquity™ subscribers for that service provider. This system would be ‘online’ to the switch all the time i.e. 24/7. All transactions performed on ATMs by mobiquity™ The Settlement File is in a comma-separated value (CSV) format. It consists of three primary subscribers will be routed to this system for processing, after switch performs authentication at the card and PIN level. mobiquity™ card transactions acquired by switch will always be routed to mobiquity™ for authorization. ATM switch will be sections: responsible for PIN verification of these Cards. The X-digit PIN number will identify mobiquity™ Card transactions. The header, which details the date and time the file was generated, the service provider that The mobiquity™ system will generate and provide a batch of pre determined card fields to the switch for card production generated the file, and other notes. through a card data file hand-off at regular intervals. The cards will be produced in multiple currencies if required by the service provider. For the same a GUI is to be provided to back-office to generate the same as per the requirement. The body, which consists of individual rows for each transaction in the applicable date. These rows are called “settlement records.” The summary (or footer), which is a total of credits and debits by currency for the given date. GRAPA New Product Assurance Mbanking represents Domains A new class of product to be assured 6 categories of risk Risk is higher Network Exposure is higher Billing M More assurance / not less is required q M Market Subsidy Partner Sales/Channel © 2011 Rob Mattison www.ra-academy.org 179 of 364
- 215. Revenue Assurance Foundations RAF103: Billing Foundations Mobile Banking Part II New Risks Account Management Risk Assure the integrity of EACH ACCOUNT Transaction Assurance Assure the integrity of each TRANSACTION May not involve revenue May not be on the RA – “Radar Screen” © 2011 Rob Mattison www.ra-academy.org 180 of 364
- 216. Revenue Assurance Foundations RAF103: Billing Foundations Location Based Billing Location-Based Services Future of Telecommunications (Location Based Billing) Based upon ability of carriers to adapt, integrate and commercialize new technology opportunities quickly Location-Based Services Represent probably BTS Billing the LARGEST SINGLE POTENTIALITY What are LBS? Categories of Services Offered Location-based services (LBS) - sometimes called Navigation and Real-Time Traffic location-based mobile services (LBMS) – are an emerging technology combining ... hardware devices Emergency Assistance and wireless communication networks with Tracking and Tracing geographic information and software applications to provide location-related guidance for customers. Concierge and Travel Services It differs from mobile position determination systems, Location-Based Advertising and Marketing such as global positioning systems (GPS), in that LBS provide much broader application- oriented New Sales Chains location services. Location-Based Billing Navigation and Traffic Tracking and Tracing Tom-Tom – GPS Child Watch – Directions and Navigation Spouse Watch Traffic and Conditions Management Elderly Watch – Quickly Expanding Marketing/Sales Watch Emergency Assistance © 2011 Rob Mattison www.ra-academy.org 181 of 364
- 217. Revenue Assurance Foundations RAF103: Billing Foundations Location Based Billing Concierge and Travel Services Location Based Marketing What is close by? Advertise when a person is “in reach” Where can I get? Advertise based upon where a person HAS How do I find? BEEN New Sales Chains Location Based Billing Started transaction – with local completion Charge people different rates depending Get it when you are ready to get it upon where they are AND what they are Availability , Inventory , Partnership Handoff doing Management Location Sensitive Billing Primary Risks / Costs This is another example of a service that can not stand-alone. Call processing capability (Network Risk) Instead, location sensitive billing (LSB) adds value to the core Billing capability (Billing Architecture Risk) service by location enabling the core service. Location sensitive billing can be used in conjunction with post post- Customer Support (Market Risk) paid, prepaid, and/or VPN based mobile communications services to establish zones for which differentiated billing – Can the architecture support thousands of individualized treatment may be applied. rate zones? For example, a home zone, work zone, and premium price – How easy is it to maintain the subscriber rate zone data? zone could be established to allow an operator to offer – Can the product evolve to provide enhanced services to differentiated service to its customers. customers? – Does the system allow the operator to provide other location-based services? © 2011 Rob Mattison www.ra-academy.org 182 of 364
- 218. Revenue Assurance Foundations RAF103: Billing Foundations Location Based Billing Billing Based Systems Switch Based Solutions Provide location capability in a post call- 1. The zone determination takes place during the call. processing framework. 2. The wireless operator associates a subset of cells with a billing zone, which is stored in the switch. 1. The wireless network operator associates a subset of cells with a billing zone within the billing system system. 3. 3 CSRs then assign subscribers to that zone, and those 2. Customer service representatives (CSRs) then assign subscribers to the assignments are also provisioned in the switch. billing zone. 4. When a subscriber makes a phone call, the switch determines 3. When a subscriber makes a call, the switch formats the call detail record whether the cell identifier servicing the call is assigned to the (CDR) with the cell identifier servicing the call and sends the record to the subscriber’s billing zone. billing system. 5. The result is formatted into the CDR and sent to the carrier’s 4. During the rating process, the billing system interprets the cell identifier billing system. and determines whether the subscriber was in his or her zone when making the call. This architecture enables some additional capabilities that aren’t possible with a billing system-based 5. The billing system then applies the appropriate rate. architecture. Subscribers can be notified whether they are in their zone when they make or receive phone calls. The switch can also determine whether subscribers are moving out of their zones during calls, apply a “split rate” to the calls, and notify subscribers (via tones) of the change in billing rate. And, again, subscribers don’t have to buy a special handset to get this service This approach has the advantage of not forcing a lot of change into the wireless operator’s customer care, billing or network systems. It also works well in a heterogeneous switch environment, and subscribers don’t have to buy a special handset to get the service. The trick is figuring out to which billing zone the subscriber should be assigned. Customer premise equipment (CPE)- based architecture Limitations Also known as fixed wireless If the goal is to provide unique billing zones to all subscribers, then subscriber data must be stored in a central location. Consists of installing hardware at the customer’s home. For the switch-based solutions, it is not architecturally sound to make Although CPE can take a number of different forms, it often the switch store customer data on this scale. resembles a cordless phone The receiver in the house is phone. From the perspective of maintaining subscriber zone data, switch- F th ti f i t i i b ib d t it h hooked up to the public switched telephone network based and billing system-based architectures are unattractive for (PSTN). migrating to individualized zone service. The handset utilizes a designated frequency when a By defining billing zones in terms of cell identifiers, they create a subscriber is at home and switches to the normal cellular requirement to update subscriber data whenever a change to the cellular network is implemented. frequencies when the subscriber moves out of the home zone. Some fairly sophisticated functions would have to be developed to identify which subscriber zones are affected when the coverage of a Home zone calls are routed through the landline connections, cell site is changed or a new cell site is constructed. and out-of-zone calls through the cellular network. Other Restrictions In Practice The billing system and switch-based solutions also cannot Operators of billing- and switch-based systems have easily move beyond cell ID for deducing whether subscribers are in or out of their rate zones. implemented location capability only incrementally; Enhancing the billing system and switch based solutions to switch-based – they do not claim to support individual billing zones for a take advantage of better sources of location data would require massive subscriber base. essentially an overhaul of their existing functionality. – they represent a compromise, which enables a wireless Even if this could be accomplished, it is unclear whether the operator to provide a limited number of zones within its functionality to interface with and interpret the LFT data belongs network and then allow subscribers to share the zones. in the switch or billing systems. – This mitigates the provisioning and maintenance issues discussed above. © 2011 Rob Mattison www.ra-academy.org 183 of 364
- 219. Revenue Assurance Foundations RAF103: Billing Foundations Location Based Billing Intelligent Network-based Solution New Components Added to Support The service control points (SCPs) are designed to act as a Once location technology is deployed in the network, a new resource is centralized resource for accessing customer data and hosting needed to interface with this technology and provide location applications. information to applications that use location information to control the call. In the case of location-based billing applications, an SCP-based g pp application could tell the switch whether a subscriber is in or out of zone. IS-41 – MPC (Mobile Positioning Center) GSM – MLC (Mobile Location Center) (The mechanism for supporting this interaction already exists by using IS-41 trigger messages that the switch sends to the IN-based application.) Both can simply request a location and determine whether subscribers are in their rate zone. Another advantage to basing location services in the IN is that it becomes easier to move beyond using cell ID as the only Placing location services into the IN is that the services can work with source of location. multiple switches and do not require a single vendor’s switch platform. Adding Location to Other Offerings Location Based Billing In Based Solution Provides Greater “Solution Rating Development Flexibility” – Rate structure now include: A service could be offered that gives a wireless g Service | Time | Location | Condition subscriber unlimited use of a phone at home but has – (Possibly a condition associated with that combination) Ie. Different rate when BTS not busy dialing restrictions out of zone. – – Ie Special promo rate for football match Location information could also be integrated with other Verification IN-based services such as prepaid or abbreviated – We now must verify Service | Time | Location | Condition dialing services. Billing (For example, a subscriber would not be subject to a – Accuracy of Billing Operation to pull together all of the information prepaid limit until leaving his or her zone.) Assurance – Verifying the integrity of all components SS7/C7 and Mobile Positioning Network Based Positioning One of the easiest means of positioning the mobile user is to COO is not always available leverage the SS7 network to derive location. When a user invokes a service that requires the MSC to launch – (for example: via SS7 with non-GSM WAP based a message to a LBS residing on a SCP the MSC may launch a SCP, services) SS7 message contain the cell of origin (COO) or cell ID (of the – nor does it always meet the QOS requirements of corresponding cell site currently serving the user). the LBS application. While potentially covering a large area, the COO may be used by LBS to approximate the location of the user. Therefore, network-based (or handset This type of positioning therefore has a large degree of based) PDE must be employed. uncertainty that should be taken into account by the LBS application in term of required quality of service (QOS). These methods leverage radio signals to (Place Cell ID on CDR or include for PP Rating Engine) determine location © 2011 Rob Mattison www.ra-academy.org 184 of 364
- 220. Revenue Assurance Foundations RAF103: Billing Foundations Location Based Billing SIM Toolkit Billing Risks/Costs The SIM Toolkit (STK), as an API between the Billing Subscriber Identity Module (SIM) of a GSM mobile phone and an application – Pricing/Margin – will it be profitable? It provides the means of positioning a mobile unit unit. – Billing Accuracy (BAA) (Billing and Assurance Architecture) – Positioning information may be as approximate as COO or – Billing Compliance – Does the billing model comply with more precise through additional means such as use of the regulatory requirements mobile network operation called timing advance (TA) or a procedure called network measurement report (NMR). – Billing Assure-ability (BAA) – Can you verify it? – The STK allows for communication between the SIM (which – New Complex Rate Plans may contain additional algorithms for positioning) and a location server application (which may contain additional Assurance of Rate Information algorithms to assist in mobile positioning). Assurance of Location Information Assurance of Rating Processes Network Risk/Cost Marketing Risks/Costs Network – Market Impacts and Risks (Headcount, Loyalty, Brand Equity, Revenue) – Service Level Assurance (can it be delivered – Usability Assurance – Is the customer being y g reliably) li bl ) informed and educated properly to understand – Service Level Assurance (can service failure be and use the product? detected, reported and managed ((Refund, – Does the customer trust the Location-Based Regulatory Reporting) Methodology? – Network Capacity Impact / Planning – How is the customer notified of change of location/condition – Opt-In or Force-Feed? Location Management and Reporting Approach – areas to assure Method 1. Location Management and Reporting Develop a “Systems Flow Diagram” of how the Method location information is managed. Specify specific technology accuracy limitations technology, 2. Rate Plan / Offer Management Include how the location/time/condition information is 3. Rating Process transmitted to the billing/rating engine This could tend to be an extremely Complex I/T – database environment © 2011 Rob Mattison www.ra-academy.org 185 of 364
- 221. Revenue Assurance Foundations RAF103: Billing Foundations Location Based Billing Forensics and Assurance Rate Plan / Offer Management Once the streams are understood define the While the opco will probably start with only one revenue risks involved plan/offer, it is likely to expand rapidly to all kinds of non-conventional offers/models non conventional offers/models. Define “control points” and reports to assure the entire stream Promotion assurance and Marketing assurance controls will be required to manage this information Without this kind of control infrastructure deals/offers/plans can quickly get to be out of control and unmanageable Typical Controls – Typical Controls – Billing Assurance Architecture Compliance User Acceptance Testing BAAC – Postpaid User Acceptance Testing CDR Collection Points – Operational and Tested – Billing verification CDR Integrity Verification – All traffic captured and reported Mediation Verification – Assurance verification A ifi i – Transport, I/O, FSEC Postpaid Billing Verification – Network capabilities – Rates, Volumes, Treatment, Presentation – Adjustments , Refunds Processing – User Usability Testing Rating Assurance – Prepaid – Verification of marketing claims/education vs Traffic (all activity accurately managed by IN) capability / actuality Rating Channel Acct Management Typical Controls – Marketing Revenue Assurance Development of Marketing Tracking Reports – Report HC, Revenue, Usage, Loyalty BY CUSTOMER – Set and Operationalize alarms for: Network Traffic (Hi/Low) Revenue (Hi/Low) Headcount (Hi/Low) Postpaid Subsidy Uptake (Hi/Low) © 2011 Rob Mattison www.ra-academy.org 186 of 364
- 222. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Intro Why is interconnect so critical? 1. Interconnect represents CORE VALUE 2. Interconnect represents CASH OUT INTERCONNECT ISSUES Interconnect environment internally Interconnect environment externally 1. It is a “Gangster business model” Leaves incredible number of possibilities 2. Regulatory Graft is common in many markets 1. Many vulnerabilities 3. Regulatory lack of concern is even more common 2. Many exploits – well established 4. Regulatory lack of understanding is rampant g y g p 3. Many external fraudsters willing to pay for 5. No international enforcement, laws or rules collusioin 4. Typical work environment lacks controls Technical Vulnerabilities Keys to Interconnect Management 1. VOIP Learn the fundamentals 2. POI and Penetration (exploits) 3. Severe complexity You must understand the: Business model Contracts Standard ways of doing business Exploit Library (all domains) © 2011 Rob Mattison www.ra-academy.org 187 of 364
- 223. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Intro Cases : Exploit Examples RA vs Fraud Mexican – CEO Special Project In this domain, the mutual responsibility of : Asian – Routing Table “Errors” Operational Manager African – IC Manager – Entreprenuer RA Pacific – Traffic Pirates Europe E rope – Call Sell / SIM Fraud with IC Twist Fra d Fraud Asia – Regulatory/Squeeze Play This is why standard controls is more important than best Is clear practice (any control would have been enough) Jurisdictional negotiation and assurance of 100% Each case worth Millions of Dollars in Loss coverage is critical Each case : Untracked for months Jurisdictional Analysis External Jurisdictions Network Frauds Regulatory Frauds Collusion – Honesty, integrity and controls within Who manages regulator relationship network are key Law Enforcement Interfaces Interconnect Management Based Frauds g Getting Law Enforcement Involved . To enforce Kick backs, cooperative “deals” , settlement frauds, agreement frauds, hundreds of possibilities Whose domain is the integrity of the IC Manager Accounting Frauds Multi-National / Carrier coops In Your Organization? Need to build coalitions with other carriers Jurisdictions and Responsibilities Peers Network Supply chain peers Interconnect business manager No international law or authority Interconnect operational staff p Only cooperative action and heavy defensive I/T posture can protect you Law Enforcement Regulator Interconnect partner relations How easy will it be for you to “take action” © 2011 Rob Mattison www.ra-academy.org 188 of 364
- 224. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Intro Legal Perspective Technical An introduction to the interconnect Business Model The technical architecture for interconnect The nature of interconnect agreements POIs, POPs, GMSCs Basic mechanics of the settlement process SS7 protocols and activities Legal terms and conditions V Variations and challenges g Interconnect contracts CDR Topology/Strategy Regulatory constraints and issues Revenue Streams Operational Perspective The “Regulators” Dilemma How is the interconnect LOB managed Understanding the different environments, Revenue stream management frameworks and incentives for IC partners Processes Why is Interconnect a GANGSTA business ? C Controls Issues Externally driven IC Frauds Denial Of Revenue How does someone create a collusion scenario When fraudsters and “partners” decide to cheat Exploit Library you out of your revenues Summary of types, methods, signs How is it done? Controls and Forensics How do you detect it? What are you options to remedy? Key regulator and partner management issues LK © 2011 Rob Mattison www.ra-academy.org 189 of 364
- 225. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Intro SIMBOX Tutorial Internal Interconnect Frauds Simboxes represent a major source of Bypass How to protect yourself from the inside (Denial of Revenue) Fraud Key controls for What are they Network How are they implemented Interconnect Operations What is the business model Accounting How can it be addressed I/T Key Exploits Scenarios MOD Forensics and Controls Bypass Mapping Methodology Questions Method for determining who is likely to perform a fraud, why and how Market analysis Key to defensive/ally structuring © 2011 Rob Mattison www.ra-academy.org 190 of 364
- 226. Revenue Assurance Foundations RAF104: Partner Foundations Business Model Protocols Business Model Protocols Business Model Protocols • The telecommunications industry is made up of several different types of businesses – Primary carriers, LEC (Local Exchange Carriers), Home Carriers – these are the companies whose primary customers are consumers or businesses – Transit carriers, a carriers who carry traffic from one carrier to another (B2B) – Hybrids – companies that do both 1/25/2011 1/25/2011 © Copyright 2009 11 ©© Copyright 2009 Copyright 2007 Rob Mattison 2 Business Model Protocols Major components/concepts • There are formal ways that businesses interact as • Interconnect AGREEMENTS (see interconnect partners example) • The rules are defined by: – Terms and conditions – Convention – Credit and Payment Terms y – History – Recourse and Remedy – Regulator – ITU – How terms are set – Type of business • The Settlement Process • Understanding these protocols is the first step in – Settlement contracted variance managing the environment Rob Mattison 3 Rob Mattison 4 Profitability Issues What is Interconnect? • Wholesale costs (what you pay the • Interconnect is the form of telecoms partner) business which allows one carrier to • Retail costs (what you collect from originate traffic and terminate it on another customer) network • Trunkgroup/Interconnect costs (what you pay to connect) • Quality of Service • Management of the relationship Rob Mattison 5 Rob Mattison 6 © 2011 Rob Mattison www.ra-academy.org 191 of 364
- 227. Revenue Assurance Foundations RAF104: Partner Foundations Business Model Protocols Interconnect Interconnect agreements • Is what makes telecom so powerful and • Go back to the earliest days of telecoms effective • The Public Switched Telephone Network – The Largest Machine in the world • The more people that are added to the network , the more powerful and useful Rob Mattison 7 Rob Mattison 8 Multiple What is Interconnect? • Jurisdictions • Interconnect is the form of telecoms • Technologies business which allows one carrier to • Languages originate traffic and terminate it on another network • Laws L Rob Mattison 9 Rob Mattison 10 Interconnect Interconnect agreements • Is what makes telecom so powerful and • Go back to the earliest days of telecoms effective • The Public Switched Telephone Network – The Largest Machine in the world • The more people that are added to the network , the more powerful and useful Rob Mattison 11 Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 192 of 364
- 228. Revenue Assurance Foundations RAF104: Partner Foundations Business Model Protocols Multiple Why is interconnect so critical? • Jurisdictions • First - inter-carrier traffic can represent as • Technologies much as 75% of the revenues for many • Languages firms • Laws L • Second - inter-carrier accounts payable inter carrier represent, by far, the single largest cash outflow that the carrier needs to deal with. • Both of these issues make interconnect and roaming revenue assurance key areas. Rob Mattison 13 Rob Mattison 14 Interconnection Architecture CDRs and POIs • Every Telco arranges for shared points of • Each POI switch is set to generate CDRs connection with any other Telco with in order to track all traffic between the two whom it does business. carriers. – Internationally – Known as POI (Point of y ( • This includes CDRs for Interconnect) – incoming calls (calls originated on the other – Domestically – Known as POP (Point of carrier's network and terminated on the home Presence) or POC (Point of Connection) network) • An interconnect point is a shared location – outgoing calls (calls originated on the home where the home Telco switch hooks up to network and terminated on the other network). the competitive carrier switch. Rob Mattison 15 Rob Mattison 16 CDR Handling Invoice Balance • Each carrier collects foreign interconnect • CDRs are either CDRs for a period of time: – more incoming than outgoing – Daily, Weekly, Monthly – more outgoing than incoming • The CDRs are then added up and • …, so the Telco either sends an invoice for translated into a net invoice amount for the the amount due to the other carrier, or foreign carrier. sends a payment for the amount owed. Rob Mattison 17 Rob Mattison 18 © 2011 Rob Mattison www.ra-academy.org 193 of 364
- 229. Revenue Assurance Foundations RAF104: Partner Foundations Business Model Protocols What About a Mismatch? Conflict Resolution Treaties • Of course, the chances of both companies • Internationally being exactly the same in the estimate of – Rules for the reconciliation of bills between charges is rare. carriers are set by international treaty and ITU conventions. • Therefore, there must be rules for the resolution of conflict. • Nationally – The national government establishes the rules for reconciliation. Rob Mattison 19 Rob Mattison 20 Interconnect Settlement is Especially Challenging Dispute handling • Your vulnerability is GREATLY increased because you • For most telco’s keeping track of every single CDR and are dependent not only upon your own operations, but it’s handling is too expensive for the benefit received. upon the operations of your competitor • Therefore most telco’s will make an agreement with – Assuming that they will even try to be accurate their interconnect partners that as long as the invoice • The nature of the vulnerability is especially aggravated amounts submitted by each are within a certain since an error represents not only lost revenue , but percentage of the other, there will be no dispute and the LOST REVENUE and LOST CASH (since you must pay carrier that owes the difference will simply pay the the other carrier) difference. • Conversely the benefit of accuracy is doubled since it • If the variance between the two is greater than this represents accounts receivable from the other carrier if agreed upon threshold , then government or treaty you are in surplus defined mediation services will be employed to resolve the difference. It is here in the area of dispute reconciliation and proof that many telco revenue enhancement opportunities can be found. Rob Mattison 21 Rob Mattison 22 Settlement Synchronization Errors Settlement Management Issues • Out of Date Rates – Interconnect rates are negotiated often, and if the wrong rates • Settlement Management Review is are used, big discrepancies can occur basically the same process for • Numbering Errors – Charging is from POI to b-number (destination number) interconnect, that billing review is for – B-number rates that are not accurate or detailed enough leave room for big discrepancies p p postpaid. In settlement management g • (ie how do you interpret a PARTICULAR b-number) review we want to assure that the invoices • Day Elements – Charging based on date/time of day (whose date, whose time of being generated (or paid) for each carrier day?) are accurate and reasonable. • Duplicate and Ineffective Calls – Multiple attempts at connection, and dropped call accounting must be tracked on both sides • Rounding – Rounding assumptions and errors Rob Mattison 23 Rob Mattison 24 © 2011 Rob Mattison www.ra-academy.org 194 of 364
- 230. Revenue Assurance Foundations RAF104: Partner Foundations Business Model Protocols Settlement Process Management Settlement Rating Management Reports • Does the Inter-carrier Billing System accurately capture • Carrier Rating Tables and Codes Report – This report and reflect the originating and terminating traffic? collects detailed information from each of the rating tables and code tables used by the settlement , and • Are the inter-carrier rates applied correctly to both types reports their contents in a form that allows the of traffic? investigator to cross reference and validate that all entries are correctly cross referenced. • Do the minutes reported by other carriers align with what p y g we are reporting? What is the discrepancy? Why does • Settlement Rating Tables and Codes Source System this happen? Reconciliation Reports – These reports provide a detailed reconciliation of all billcodes and other critical codes and table values, against the source systems that provided them. This allows the investigator to validate that all values utilized by the rating engine are valid and in synch with other telecom management systems. Rob Mattison 25 Rob Mattison 26 Service Level Agreements can include: Methods of Revenue Sharing • Direct Billing - each carrier bills and is billed for the portion that • Volume of business to be delivered they carry. • Cascade Billing - billing is only allowed in an either upstream or • Quality of the connection downstream manner. • Distance Based Billing – Rates based upon distance – Line quality • Revenue Sharing – Pre-agreement upon percentages – # successful terminations (connections) • Cost Based Billing – (e.g. BT uses the # of switches traversed) g ( g ) • ITU Settlement Process (The Accounting Rate System) - In this process, the traffic originator reports traffic to all transiting and terminating operators. – For example, between two network operators with direct or indirect access to each other, traffic is measured and priced according to their agreement negotiated within the framework of ITU rules. Prices are based on Total Accounting Rate (TAR). Each operator renders monthly declarations of traffic sent to the other operator. Settlements typically occur on a quarterly basis. The last mile has been largely ignored, as there is usually only one local company. Rob Mattison 27 Rob Mattison 28 Interconnect Agreements Key to profitability in Interconnect • Keep track of negotiated rates • When this interconnection agreement is reached, several things are resolved including: • Shift traffic to the best price at the right – The locations where traffic will pass between the 2 carriers (the POI (point of interconnect) or POP (point of presence)) time – The way that the carrier will generate CDR’s in order to track CDR s the traffic being passed – An agreed upon method for the reconciliation of amounts due between the 2 carriers (often dictated by government edict or international treaty) – An agreed upon pricing and price negotiation method. Rob Mattison 29 Rob Mattison 30 © 2011 Rob Mattison www.ra-academy.org 195 of 364
- 231. Revenue Assurance Foundations RAF104: Partner Foundations Business Model Protocols Agreement Management Questions Agreement Management Issues • Questions: • Gaining insight into the nature and viability of interconnect agreements will, in general, have a lot more to do with the • Are the terms of the agreement clear, manageable, reviewing of contracts and procedures than with systems and enforceable and advantageous to the carrier? policies. The trick will be to review those contracts and then assure that the settlement groups policies, procedures and systems • Are renegotiation, settlement, mediation, escrow support what those agreements dictate. management and accounts receivable and payables terms appropriate and reasonable? • M Many ti times, telco settlement operations are h dl d i a f l t l ttl t ti handled in far less than formal or systematic way, and therefore, the potentialities for • Are inter-carrier rates renegotiated as often as things being missed, or misunderstood is quite high. possible? • Is the process for evaluating inter-carrier traffic and • The most important information and reporting related aspects of this area will have to do with the ability of the investigator to review the negotiating for new rates well understood and rates that are agreed upon, see a history of how those rates have executed? changed over time, and review the information used to drive the decisions to change those rates. Rob Mattison 31 Rob Mattison 32 Attachments / assignment • Review the interconnect contract provided? • Be prepared to answer questions • Review the TAR Rob Mattison 33 © 2011 Rob Mattison www.ra-academy.org 196 of 364
- 232. GRAPA Case Study Investigation Area: Wholesale Business Area Description The wholesale business for Carrier is the sale of termination and transit services for agents at a discounted price. It represents 52% of the company’s revenue. Wholesalers are companies, like IDT, who purchase termination and transit services from operators and resell them to consumers by means of calling cards. In the case of Carrier, all wholesale calling cards are sold outside of Country. The cards are used mainly for calls back to Country, although some of the traffic goes elsewhere. Business Model Wholesale business is 100% inbound. Parties involved 1. Carrier 2. Wholesaler 3. Interconnect partners 4. Consumer/calling party 5. Called party Commercial details Carrier invoices the wholesaler weekly. Billing is done manually. Charges are variable rates based on negotiated rules. It is not possible to determine in advance if or when the client will reach certain levels of minutes or when the client may pass the credit limit. For this reason, wholesale business is monitored on a daily basis through a manual Excel spreadsheet-based process and Marketing is notified. Wholesalers tend to be a credit risk. To establish credit, the wholesaler fills out a credit application. Carrier checks the credit risk via a DB report. Carrier generally gets payment up front against a 15% discount. The client, therefore, works with a positive account balance. Once this balance is used up, the service is cut off. Depending on the relationship and the history with the client, Carrier may negotiate more lenient terms. Value Proposition • Wholesalers purchase services at discounted rates and sell at a profit • Consumers purchase phone time at lower rates than from the major carriers • Carrier sells high volume of business RA Assessment – Wholesale confidential - for internal use only. 1 of 6 197 of 364
- 233. GRAPA Case Study Exchange Points Following are the points of economic exchange within this business model. a. Consumers buy discounted phone time from the wholesaler and get a lower rate for making the call than by using “traditional” carriers. The benefit to consumers is reduced price; the cost is the inconvenience and risk of using a non-traditional provider. b. Wholesalers negotiate a “discounted” rate for time. They buy “bulk” blocks of time. The more time the wholesalers sell, the lower the rate they pay. In exchange, Carrier provides network capacity and termination services. The wholesaler makes profit by selling minutes for less than the cost (the amount paid to Carrier). c. When the called party is an existing Carrier customer, the customer receives the call at no charge (as per normal contact terms). Carrier is able to keep all of the fees for the calls terminated on-net. d. When the called party is in Country, but not part of the Carrier network, Carrier routes the call to a national interconnect partner who, in turn, terminates the call. Carrier pays the national interconnect partner for terminating the call. Carrier makes a profit by charging more for the time than they pay to the interconnect partner. e. When the called party is not in Country, Carrier routes the call to an international interconnect partner who, in turn, terminates the call. Carrier pays the interconnect partner for terminating the call. Carrier makes a profit by charging more for the time than they pay to the interconnect partner. a Called Party (Subscriber) Wholesaler Consumer (1. Sells termination time to c (Receive Call) (Person buying consumer. services from the 2. Purchases termination time Wholesaler) from carrier) Domestic b Interconnect d Domestic Interconnect Partner (Terminate calls not to Subscribers) Carrier Carrier (1. Terminates calls by the consumer, passed e International to Marcatel by the Wholesaler. Interconnect 2. Terminates On-Net (when customer is a Marcatel customer) 3. Terminates Off-Net (When the called party is a non-Marcatel Subscriber.. Can be International Interconnect Partner Domestic or International) (Terminate calls not to Subscribers) Business Process Model Each point of exchange has a business model associated with it. A) Wholesaler / Consumer The business process for this economic exchange is as follows: RA Assessment – Wholesale confidential - for internal use only. 2 of 6 198 of 364
- 234. GRAPA Case Study 1. Wholesaler Wholesalers identify carriers who offer termination services at a discounted rate. They “shop” among different carriers and negotiate the best rates possible with each. Wholesalers continuously negotiate and renegotiate rates. The wholesalers then create “termination products,” which are long distance or local termination “packages” that offer various types of termination (different locations, times etc.) at different rates. Rates are defined so that they are: • Lower than the rates offered by other carriers • Lower than the rates that consumers will be charged Wholesalers then invoke marketing and sales channels to advertise these products to their consumer markets. Wholesalers own some form of switching and routing device or facility (an intelligent network component, a phone call server, or an internet server). This device will: • Keep track of customers’ time and decrement their balances • Keep track of routing needs and route consumer calls to the best carrier partner 2. Consumer Consumers buy a “product” from the wholesaler and gain access to the wholesaler’s network or gateway by calling a specific number or via internet connection. B) Wholesaler / Carrier The business process for this economic exchange is as follows: 1. Wholesaler Wholesalers shop different carriers for the best negotiated rate for termination charges. 2. Carrier The Carrier sales group negotiates with each wholesale partner for the best terms and rates. In this case, the following business rules apply. In general, wholesalers are considered a bad credit risk. Therefore, most work pay in advance (a deposit) for services. The balance of their usage is tracked on a daily basis. Wholesalers that exceed their set limit have their services terminated. Rates are usually negotiated with wholesalers on a sliding scale. The more minutes they utilize, the lower the rates. There is a dedicated trunk(s) for each wholesaler that is hooked up to the Carrier network. Information about the nature, destination, and duration of each call routed to Carrier via the wholesaler’s trunk is captured through an inbound wholesale call detail record (CDR). Each inbound wholesale CDR is captured, mediated, and forwarded to the wholesale billing system. The wholesale billing group reviews wholesale customer balances on a daily basis to determine if the wholesale customer has exceeded the credit limit. Based on the terms of the contract, CDR information is saved until a wholesale invoice has been created. At that time, the appropriate rate to the wholesaler is determined (based on how well the criteria set in the billing arrangement were met). RA Assessment – Wholesale confidential - for internal use only. 3 of 6 199 of 364
- 235. GRAPA Case Study C) Carrier / Local Customer If the called party of a wholesale call is an existing Carrier customer, then the call is terminated subject to the terms that exist between Carrier and that customer. For each call terminated on the Carrier network, a CDR is generated at the terminating switch. These CDRs are captured and passed to mediation and finally to the Consumer billing system. (This applies to those cases where the customer is charged for termination. If the customer is not charged for termination, then ???.) D) Carrier / National Interconnect Partner Carrier has established interconnect partnership arrangements with several national interconnect partners and has negotiated set termination fees with each of these carriers. The terms are renegotiated when the contract is up for renewal or when conditions change. To support this business, Carrier has established a number of Points of Interconnect (POIs) with each of these carriers. Each carrier has its own unique trunk(s). Each time a call is routed to the interconnect partner, a CDR is generated at the existing POI and forwarded to the Interconnect billing system. On a monthly basis, the interconnect carrier is paid for the balance due. E) Carrier / International Interconnect Partner Carrier has established interconnect partnership arrangements with several international interconnect partners and has negotiated set termination fees with each of these carriers. The terms are renegotiated when the contract is up for renewal or when conditions change. To support this business, Carrier has established a number of Points of Interconnect (POIs) with each of these carriers. Each carrier has its own unique trunk(s). Each time a call is routed to the interconnect partner, a CDR is generated at the existing POI and forwarded to the Interconnect billing system. On a monthly basis, the interconnect carrier is paid for the balance due. RA Assessment – Wholesale confidential - for internal use only. 4 of 6 200 of 364
- 236. GRAPA Case Study Systems Architecture Each of the business processes potentially has a systems architecture associated with it. Siemens Switch Wholesale originating CDRs Wholesale Wholesale Wholesale Wholesale Mediation Billing Collections Dunning Consumer terminating CDRs Consumer Consumer Consumer Consumer Mediation Billing Collections Dunning Siemens Switch CDRs for calls terminated to Interconnect carrier trunk Interconnect Interconnect Interconnect Interconnect Mediation Billing Collections Dunning Nextone Wholesaler / Consumer Out of scope. Wholesaler / Carrier • Incoming Switch POI • Mediation System • Wholesale Billing System Carrier / On-Net Customer • Terminating Switch • Mediation System • Consumer Billing System (if applicable) Carrier / National Interconnect Partner • POI/Trunk attached to interconnect partner • Mediation System • Interconnect Billing System Carrier/International Interconnect Partner • POI/Trunk attached to Interconnect Partner • Mediation System • Interconnect Billing System RA Assessment – Wholesale confidential - for internal use only. 5 of 6 201 of 364
- 237. GRAPA Case Study Network Architecture 40% of the traffic is voice traffic that is routed directly through the Siemens platform. 60% of the traffic is received over IP, in which case it is routed via the Nextone platform where it is converted. There are 2 Siemens switches involved (POIs): 1. EWSD Monterrey with 60,000 trunks 2. EWSD Mcallen with 30,000 trunks a. 1 trunk per customer Calls are terminated based on routing and BNUM. Locally Terminated Calls Wholesaler1 switch Trunks to Interconnect Partners Trunks from Siemens Wholesalers Switches Wholesaler3 switch Wholesaler 7 Gateway Wholesaler 8 The Gateway Nextone Internet Wholesaler 9 Gateway Provisioning How is a wholesaler provisioned on: • Nextone • Siemens • Mediation • Billing How is an interconnect partner provisioned on: • Siemens • Mediation • Billing RA Assessment – Wholesale confidential - for internal use only. 6 of 6 202 of 364
- 238. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Technical Protocols Assumptions (Prerequisite) Interconnect Technical Protocols • SS7 • Interconnect routing / rating • Interconnect agreements (overview) Interconnect Technology Profile 1/25/2011 1/25/2011 © Copyright 2009 11 ©© Copyright 2009 Copyright 2007 Rob Mattison •2 Interconnect Technical Protocols What is interconnect? • POI/POP Architecture and Costs • CDR / Topology Strategy – The CDR Game (interactive session) • Routing Tables Local Wireless Wireline Carrier • Trunkgroup Controls Carrier Long Distance Carrier Rob Mattison Rob Mattison •3 •4 POI – Point of Interconnect POP – Point of Presence Package is eventually routed to a Hooks up POI/POP to circuit CIRCUIT SWITCH, which directs the individual switch on call where it is destined. some other network. (This is where CDRs are created.) CDR 1/25/2011 1/25/2011 © Copyright 2009 55 ©© Copyright 2009 Copyright 2007 © 2011 Rob Mattison www.ra-academy.org 203 of 364
- 239. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Technical Protocols Interconnection Architecture • Every Telco arranges for shared points of connection with any other Telco with Carrier 1 POI Switch whom it does business. – Internationally – Known as POI (Point of y ( Interconnect) Carrier 1 - Ring Carrier 2 – Ring – Domestically – Known as POP (Point of Presence) or POC (Point of Connection) Carrier 2 • An interconnect point is a shared location POI Switch where the home Telco switch hooks up to the competitive carrier switch. Rob Mattison Rob Mattison •7 •8 Global Crossing TM CDRs and POIs Telmex ATT Optus Reliance • Each POI switch is set to generate CDRs BT in order to track all traffic between the two carriers. • This includes CDRs for – incoming calls (calls originated on the other carrier's network and terminated on the home POI1 POI2 network) POI3 – outgoing calls (calls originated on the home network and terminated on the other network). • Trunkgroups Rob Mattison •10 CDR Handling POI1 POI2 • Each carrier collects foreign interconnect POI3 CDRs for a period of time: – Daily, Weekly, Monthly Outbound Inbound and Outboun • The CDRs are then added up and ( g (Originated Calls) ) Customer Pays Calls translated into a net invoice amount for the (SETTLEMENT) Mediation foreign carrier. Postpaid Interconnect Billing Billing CDRs and Billing Rob Mattison •11 © 2011 Rob Mattison www.ra-academy.org 204 of 364
- 240. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Technical Protocols Trunkgroup Protocols Trunkgroup Controls • Network control of interconnect is typically reported by trunkgroup • Each Switch has a set of trunkgroups assigned • Each trunkgroup traffic is reported separately 1/25/2011 1/25/2011 © Copyright 2009 •13 13 13 ©© Copyright 2009 Copyright 2007 Rob Mattison •14 Trunkgroup Controls Standard Controls • Control over trunkgroups is key • Formal “list of trunkgroups” • Unregistered trunkgroup = fraud leakage • * Mediation “synch list” • Unmanaged trunkgroup , the same • * New trunkgroup change management procedure Rob Mattison Rob Mattison •15 •16 Routing Rules Routing Protocols • Typical configuration: – The POI has the alternate routing tables – All other switches route to the POI • The problem risk occurs when routing tables are not correct 1/25/2011 1/25/2011 © Copyright 2009 •17 17 17 ©© Copyright 2009 Copyright 2007 Rob Mattison •18 © 2011 Rob Mattison www.ra-academy.org 205 of 364
- 241. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Technical Protocols Routing Controls • Network control POI Routing Tables – Routing table security – Routing table accuracy When routes change how do you know that changes have been made properly. Routing frauds. 1/25/2011 1/25/2011 © Copyright 2009 •20 20 20 Rob Mattison ©© Copyright 2009 Copyright 2007 •19 Routing Tables Partner Routing Tables • Each “source switch” has a B.Num routing • Routing to partners (from the POI/GMSC) table will depend upon • This table contains routing to interconnect – Interconnect Agreements switches – Topology p gy • The “default” or “primary” route is listed in – Nature of partner (Intl/National) the source switch – National Standard • In GSM – all is routed to a Gateway • There are different IC SS7 standards for (GMSC) different relationships Rob Mattison Rob Mattison •21 •22 Rob Mattison Rob Mattison •23 •24 © 2011 Rob Mattison www.ra-academy.org 206 of 364
- 242. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Technical Protocols SS7 Protocols Other functions • Support ISUP but contain “interspersed” • Trunk available? commands for alternative traffic handling • Route available? methods Rob Mattison Rob Mattison •25 •26 Alternative Methods of availability Key Forensics detection • Standard SS7 • Which method is utilized in your network • Old Switch – Polarity (+/-) Detection • Must be accomplished on a: • VOIP – Crude – Switch by Switch – Utilize fundamental non SS7 protocol fundamental, non-SS7 – TG by TG – Highly fraud and leakage prone – Partner by Partner Basis • VOIP – SIP • Different methods = different risks – Close to standard handoff • Don’t be “put off” by network “don’t worry about it” Rob Mattison Rob Mattison •27 •28 Routing Tables • Review alternative routing table techniques • Build your own routing tables • Assess SS7 Sequence Rob Mattison •29 © 2011 Rob Mattison www.ra-academy.org 207 of 364
- 243. Revenue Assurance Foundations RAF104: Partner Foundations GRAPA Sample Interconnect Numbers Trunk Group Operator 2BTG1 British Telecom BBTG2 British Telecom 2BTG3 British Telecom OBTGA British Telecom 2BTG4 British Telecom 2BTG2 British Telecom BBTG1 British Telecom 2BIDT8 IDT 2BIDT7 IDT 2BIDT2 IDT 2BIDT3 IDT 2BIDT5 IDT 2BIDT4 IDT 2BIDT1 IDT 2RELIT Reliance International 2RELIM Reliance International RELI1 Reliance International RELI2 Reliance International 2OSUDA Sudatel www.ra-academy.org 208 of 364
- 244. Revenue Assurance Foundations RAF104: Partner Foundations GRAPA Sample Interconnect Numbers Trunk Group Operator Calls Minutes Tariff/Mn Revenue - PDOLLARS 2BTG1 British Telecom 330,918 1,174,142 0.08 113,892 2BTG2 British Telecom 320,794 1,006,789 0.08 97,659 2BTG3 British Telecom 385,037 1,498,267 0.074 145,332 2BTG4 British Telecom 392,020 1,522,461 0.012 147,679 2BIDT1 IDT 297,856 1,114,426 0.08 96,955 2BIDT2 IDT 260,499 939,626 0.089 81,747 2BIDT3 IDT 457,206 1,617,146 0.08 140,692 2BIDT4 IDT 747,395 2,821,223 0.065 245,446 2BIDT5 IDT 11,120 16,397 0.08 1,427 BBTG1 British Telecom 295,281 1,193,772 0.014 115,796 BBTG2 British Telecom 284,187 1,086,943 0.1 105,433 3,782,313 13,991,193 1,292,058 www.ra-academy.org 209 of 364
- 245. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Operational Protocols Key Interconnect Operations Interconnect Operational Protocols • Partner Selection Protocols • Partner Provisioning Protocols • Relationship Maintenance Protocols – Rate Change Protocols – Least cost routing Protocols • Margin Management Protocols Interconnect Revenue Operations 1/25/2011 1/25/2011 © Copyright 2009 11 ©© Copyright 2009 Copyright 2007 Rob Mattison 2 Key Issues Partner Selection Protocols • Rates • Quality • Reach (How many termination / origination points for the cost) • “Hidden costs” • Credit Risk • Fraud Risk 1/25/2011 1/25/2011 © Copyright 2009 33 ©© Copyright 2009 Copyright 2007 Rob Mattison 4 Partner Selection Controls Rates • Purchasing Due Diligence • Public Posted • Variations • Highly volatile – Board Approval of Partner – Purchasing Department RFP/RFI • Key factor – Segregation of Duties • Selector separate from manager • Deepens the risk (Purchasing Fraud vs Ops Fraud) – Watch the watcher • Build in CROSS CONTROLS – IC mgr to report on Purchasing and ViceVersa Rob Mattison 5 Rob Mattison 6 © 2011 Rob Mattison www.ra-academy.org 210 of 364
- 246. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Operational Protocols Quality Answer/Seizure ratio (ASR) • number of successfully answered calls divided by the total number • ASR – Answer Seizure Rate of calls attempted (seizures) multiplied by 100. • (Answer / Seizure) * 100 = AnswerSeizureRatio • NER – Network Efficiency Ratio • Since busy signals and other rejections by the called number count as call failures, the calculated ASR value can vary depending on • Line quality user behavior. • Lower ASR may be caused by the Far End switch congestion, not • Overall A il bilit O ll Availability Answering b called party and b A i by ll d t d busy number at f end, all th b t far d ll these factors bring a low (Poor) ASR which is uncontrollable by the operators. • Reach • The ASR is a measure of network quality defined in ITU SG2 Recommendation E.411: International network management - Operational guidance. • In Pakistan the telecommunications regulation authority PTA ( Pakistan Telecommunication Authority) has set the licensing standards of Inward ASR requirements of 55% and outward ASR requirements of 66% Rob Mattison 7 Rob Mattison 8 Network Effectiveness Ratio (NER) Reach • measures the ability of a network to deliver • How many destinations for the connection a call to the called terminal. • “richness of the line” = lower operational • Busy signals and other call failure due to costs user behaviour are counted as successful call d li ll delivery f NER calculation for l l ti purposes. • Unlike ASR, NER excludes the effects of customer and terminal behaviour. • The NER is a measure of network quality defined in ITU-T Recommendation E.425. Rob Mattison 9 Rob Mattison 10 Hidden Costs Credit Risk • Trunkgroup costs • Huge issue • Connection costs • Many credit fraud cases • Satellite costs Rob Mattison 11 Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 211 of 364
- 247. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Operational Protocols Fraud Risk • Will this partner enable Agreements and Pricing – Bypass – Piracy – SIMBOX 1/25/2011 1/25/2011 © Copyright 2009 14 14 Rob Mattison 13 ©© Copyright 2009 Copyright 2007 Agreements Service Level Agreements can include: • Each time 2 carriers create an • Volume of business to be delivered interconnection, an agreement is made • Quality of the connection • This agreement dictates the Service Level – Line quality Commitments and prices to be charged for – # successful terminations (connections) shared traffic Rob Mattison 15 Rob Mattison 16 Pricing Terms Terms of agreements are set by • Cost per call • International treaty • Units (second, minutes etc.) • National Regulators • Time bands / date bands • Standards Groups (GSM) • By B arrangement b tt between carriers i Rob Mattison 17 Rob Mattison 18 © 2011 Rob Mattison www.ra-academy.org 212 of 364
- 248. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Operational Protocols Methods of Revenue Sharing Interconnect Agreements • Direct Billing - each carrier bills and is billed for the portion that they carry. • Cascade Billing - billing is only allowed in an either upstream or • When this interconnection agreement is reached, downstream manner. several things are resolved including: • Distance Based Billing – Rates based upon distance – The locations where traffic will pass between the 2 carriers • Revenue Sharing – Pre-agreement upon percentages (the POI (point of interconnect) or POP (point of presence)) • Cost Based Billing – (e.g. BT uses the # of switches traversed) g ( g ) – The way that the carrier will generate CDR’s in order to track CDR s • ITU Settlement Process (The Accounting Rate System) - In this the traffic being passed process, the traffic originator reports traffic to all transiting and terminating operators. – An agreed upon method for the reconciliation of amounts due – For example, between two network operators with direct or indirect access to between the 2 carriers (often dictated by government edict or each other, traffic is measured and priced according to their agreement international treaty) negotiated within the framework of ITU rules. Prices are based on Total Accounting Rate (TAR). Each operator renders monthly declarations of – An agreed upon pricing and price negotiation method. traffic sent to the other operator. Settlements typically occur on a quarterly basis. The last mile has been largely ignored, as there is usually only one local company. Rob Mattison 19 Rob Mattison 20 Pricing Key to profitability in Interconnect • Interconnect pricing is set by regulators, or • Keep track of negotiated rates negotiated at set intervals • Shift traffic to the best price at the right • Weekly is common, daily, hourly possible time and growing in interest • There are also “brokers” who will negotiate “on the spot” • There are also “cost based” pricing models Rob Mattison 21 Rob Mattison 22 Agreement Management Questions Agreement Management Issues • Questions: • Gaining insight into the nature and viability of interconnect agreements will, in general, have a lot more to do with the • Are the terms of the agreement clear, manageable, reviewing of contracts and procedures than with systems and enforceable and advantageous to the carrier? policies. The trick will be to review those contracts and then assure that the settlement groups policies, procedures and systems • Are renegotiation, settlement, mediation, escrow support what those agreements dictate. management and accounts receivable and payables terms appropriate and reasonable? • M Many ti times, telco settlement operations are h dl d i a f l t l ttl t ti handled in far less than formal or systematic way, and therefore, the potentialities for • Are inter-carrier rates renegotiated as often as things being missed, or misunderstood is quite high. possible? • Is the process for evaluating inter-carrier traffic and • The most important information and reporting related aspects of this area will have to do with the ability of the investigator to review the negotiating for new rates well understood and rates that are agreed upon, see a history of how those rates have executed? changed over time, and review the information used to drive the decisions to change those rates. Rob Mattison 23 Rob Mattison 24 © 2011 Rob Mattison www.ra-academy.org 213 of 364
- 249. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Operational Protocols Inter-carrier traffic Pattern and Trend Reports (agreement profitability review) • (Pattern trend reports, are reports that use information from the Partner Provisioning tracking and reports, and provide an in depth breakdown of the information they contain over time, and by different distribution breakouts.) • Carrier Invoicing Summary Trend Analyses – These reports provide a historical view of the variation in totals on a carrier, daily, weekly, and monthly basis by carrier, settlement p y y , period, day of week, time of , y , day and day of year (seasonal view). Summary trend reports allow the revenue assurance investigator to identity situations where significant variances in trends might indicate underlying problems with carrier relationships, reference tables, business policies or other causes. • Carrier Traffic Distribution Analyses – These reports break out the normal tracking and SA reports by several hierarchies including : – Geography – Customer Type , Segment – Carrier – Call Duration 1/25/2011 1/25/2011 © Copyright 2009 26 26 • Origination / termination (carrier Mattison geography) Rob and 25 ©© Copyright 2009 Copyright 2007 Provisioning Issues • Physical Trunkgroup Enablement Relationship Maintenance • Routing table implementation and testing • Rate and partner loads – Billing systems – Accounting Systems – Mediation / other revenue stream points – IN Methods 1/25/2011 1/25/2011 © Copyright 2009 28 28 Rob Mattison 27 ©© Copyright 2009 Copyright 2007 Ongoing Maintenance • Rate Adjustments Routing and Rating – Security and speed • Route Adjustments – Security and speed • Margin Tracking – When is it time to change 1/25/2011 1/25/2011 © Copyright 2009 30 30 Rob Mattison 29 ©© Copyright 2009 Copyright 2007 © 2011 Rob Mattison www.ra-academy.org 214 of 364
- 250. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Operational Protocols When a decision is made to utilize an IC partner How is routing managed? • Decide which countries (cities) the partner • SS7 Routing tables will be utilized as terminator • Routing databases • Agree upon a termination rate for that • Routing applications termination point • Configure the network to route calls to the appropriate trunkgroup Rob Mattison 31 Rob Mattison 32 Prioritization Where is the risk? • Typically, 1 IC partner cannot be counted • There are many ways for the routing on for 100% coverage all of the time decision to be circumvented • Alternates (2nd and 3rd options) will also be – Failure to communicate changes in routing configured decisions – Errors in routing tables • These are typically more expensive, but more dependable – Intentional fraudulent manipulation of routing tables • Profitability decision is based upon an assumption of a certain amount of traffic to each Partner Rob Mattison 33 Rob Mattison 34 Do you know the margins ? Margin Management • Route • TG • Partner • Destination Level D ti ti L l 1/25/2011 1/25/2011 © Copyright 2009 35 35 ©© Copyright 2009 Copyright 2007 Rob Mattison 36 © 2011 Rob Mattison www.ra-academy.org 215 of 364
- 251. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Operational Protocols Settlement Leakage Breakdown Points Settlement Synchronization Errors • There are many ways that leakage can occur within the • Out of Date Rates Settlement space. A partial list includes – Interconnect rates are negotiated often, and if the wrong rates – Losses due to currency conversion errors are used, big discrepancies can occur – Losses due to use of disadvantageous currency conversion • Numbering Errors agreements – Charging is from POI to b-number (destination number) – Poorly or improperly negotiated interconnect rates – B-number rates that are not accurate or detailed enough leave – Failure to capture and/or report originating CDR’s correctly CDR s room for big discrepancies – Failure to capture and/or report terminating CDR’s correctly • (ie how do you interpret a PARTICULAR b-number) – Interconnection – vendors change rates without you knowing or • Day Elements reacting – Charging based on date/time of day (whose date, whose time of – Interconnection – manage vendors by margins day?) – Improperly applied interconnection rates (originate or terminate) • Duplicate and Ineffective Calls – Escrow fund not in alignment with revenue difference between – Multiple attempts at connection, and dropped call accounting carriers must be tracked on both sides – Lack of credible proof to support legal mediation discrepancy claims • Rounding – Rounding assumptions and errors Rob Mattison 37 Rob Mattison 38 Settlement Management Issues Settlement Process Management • Settlement Management Review is • Does the Inter-carrier Billing System accurately capture and reflect the originating and terminating traffic? basically the same process for • Are the inter-carrier rates applied correctly to both types interconnect, that billing review is for of traffic? p p postpaid. In settlement management g • Do the minutes reported by other carriers align with what p y g review we want to assure that the invoices we are reporting? What is the discrepancy? Why does this happen? being generated (or paid) for each carrier are accurate and reasonable. Rob Mattison 39 Rob Mattison 40 Settlement Rating Management Reports • Carrier Rating Tables and Codes Report – This report collects detailed information from each of the rating tables and code tables used by the settlement , and reports their contents in a form that allows the investigator to cross reference and validate that all entries are correctly cross referenced. • Settlement Rating Tables and Codes Source System Reconciliation Reports – These reports provide a detailed reconciliation of all billcodes and other critical codes and table values, against the source systems that provided them. This allows the investigator to validate that all values utilized by the rating engine are valid and in synch with other telecom management systems. Rob Mattison 41 © 2011 Rob Mattison www.ra-academy.org 216 of 364
- 252. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example printer-friendly Sample Business Contracts Home: Sample Business Contracts: General Terms and Conditions Page 1 AGREEMENT THIS AGREEMENT is made by and between TelcoX Telecommunications, Inc., (TelcoX), a StateX corporation, and The Other Phone Company, Inc. d/b/a TelcoY Communications, a StateY corporation, The Other Phone Company, Inc. d/b/a TelcoY Inc., (NOT in StateY) a StateY corporation and TelcoY Inc., a Pennsylvania corporation (collectively referred to as TelcoY), and shall be deemed effective 30 days after the date of the last signature of both Parties (Effective Date). This Agreement may refer to either TelcoX or TelcoY or both as a Party or Parties. W I T N E S S E T H WHEREAS, TelcoX is a local exchange telecommunications company authorized to provide telecommunications services in the states of StateZ, StateY, StateX, StateA, StateB, StateC, and StateF; and WHEREAS, TelcoY is a Local carrier authorized to provide telecommunications services in one or more of the following states: StateZ, StateY, StateX, StateA, StateB, StateC, StateD, StateE, and StateF; and WHEREAS, TelcoY wishes to resell TelcoX's telecommunications services and purchase network elements and other services, and the Parties wish to interconnect their facilities and exchange traffic pursuant to Sections 251 and 252 of the Act. NOW THEREFORE, in consideration of the mutual agreements contained herein, TelcoX and TelcoY agree as follows: DEFINITIONS AFFILIATE is defined as a person that (directly or indirectly) owns or controls, is owned or controlled by, or is under common ownership or control with, another person. For purposes of this paragraph, the term own means to own an equity interest (or equivalent thereof) of more than 10 percent. COMMISSION is defined as the appropriate regulatory agency in each of TelcoX's nine-state region, StateZ, StateY, StateX, StateA, StateB, StateC, , and StateF. COMPETITIVE LOCAL EXCHANGE CARRIER (CLEC) means a telephone company certificated by the Commission to provide local exchange service within TelcoX's franchised area. END USER means the ultimate user of the Telecommunications Service. FCC means the Federal Communication Commission. PAGE General Terms and Conditions Page 2 GENERAL TERMS AND CONDITIONS means this document including all of the terms, provisions and conditions set forth herein. TELECOMMUNICATIONS means the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received. TELECOMMUNICATIONS SERVICE means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used. TELECOMMUNICATIONS ACT OF 1996 (ACT) means Public Law 104-104 of the United States Congress effective February 8, 1996. The Act amended the Communications Act of 1934 (47 U.S.C. Section 1 et. seq.). 1. CLEC CERTIFICATION 1.1 TelcoY has provided to TelcoX in writing the certificate number or docket number, for the docket pending certification, for all states covered www.ra-academy.org 217 of 364
- 253. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example by this Agreement except StateA. 1.2 TelcoX will file this Agreement with the appropriate commission for approval. 2. TERM OF THE AGREEMENT 2.1 The term of this Agreement shall be three years, beginning on the Effective Date and shall apply to the TelcoX territory in the state(s) of StateZ, StateY, StateX, StateA, StateB, StateC, StateD, South Carolina and StateF. 2.2 The Parties agree that by no later than one hundred and eighty (180) days prior to the expiration of this Agreement, they shall commence negotiations for a new agreement to be effective beginning on the expiration date of this Agreement (Subsequent Agreement). If as of the expiration of this Agreement, a Subsequent Agreement has not been executed by the Parties, then except as set forth in Section 2.3.2 below, this Agreement shall continue on a month-to-month basis while a Subsequent Agreement is being negotiated. The Parties' rights and obligations with respect to this Agreement after expiration shall be as set forth in Section 2.3 below. 2.3 If, within one hundred and thirty-five (135) days of commencing the negotiation referred to in Section 2.2 above, the Parties are unable to negotiate new terms, conditions and prices for a Subsequent Agreement, either Party may petition the Commission to establish appropriate terms, conditions and prices for the Subsequent Agreement pursuant to 47 U.S.C. 252. In the event the Commission does not issue its order prior to the expiration date of this Agreement, or if the PAGE General Terms and Conditions Page 3 Parties continue beyond the expiration date of this Agreement to negotiate the Subsequent Agreement without Commission intervention, the terms, conditions and prices ultimately ordered by the Commission, or negotiated by the Parties, shall be retroactive to the day following the expiration date of this Agreement. 2.3.1 Except as set forth in Section 2.3.2 below, notwithstanding the foregoing, in the event that as of the date of expiration of this Agreement and conversion of this Agreement to a month-to-month term, the Parties have not entered into a Subsequent Agreement and no arbitration proceeding has been filed in accordance with Section 2.3 above, or the Parties have not mutually agreed (where permissible) to extend the arbitration window for petitioning the applicable Commission(s) for resolution of those terms upon which the Parties have not agreed, then either Party may terminate this Agreement upon sixty (60) days notice to the other Party. In the event that TelcoX terminates this Agreement as provided above, TelcoX shall continue to offer services to TelcoY pursuant to the terms, conditions and rates set forth in TelcoX's then current standard interconnection agreement. In the event that TelcoX's standard interconnection agreement becomes effective as between the Parties, the Parties may continue to negotiate a Subsequent Agreement, and the terms of such Subsequent Agreement shall be retroactive to the day following the expiration date of this Agreement. 2.3.2 Notwithstanding Section 2.3 above, in the event that as of the date of expiration of this Agreement the Parties have not entered into a Subsequent Agreement and (1) no arbitration proceeding has been filed in accordance with Section 2.2 above, and (2) TelcoY either is not certified as a CLEC in any particular state to which this Agreement applies or has not ordered any services under this Agreement as of the date of expiration, then this Agreement shall not continue on a month to month basis but shall be deemed terminated as of the expiration date hereof. 3. OPERATIONAL SUPPORT SYSTEMS 3.1 TelcoY shall pay charges for Operational Support Systems (OSS) as set forth in this Agreement in Attachment 1 and/or in Attachments 2, 3 and 5, as applicable. 4. PARITY 4.1 When TelcoY purchases, pursuant to Attachment 1 of this Agreement, telecommunications services from TelcoX for the purposes of resale to End Users, TelcoX shall provide said services so that the services are equal in quality, subject to the same conditions, and provided within the same provisioning time intervals that TelcoX provides to its affiliates, subsidiaries and End Users. The quality of a Network Element, as well as the quality of the access to such Network Element provided by TelcoX to TelcoY shall be at least equal in quality to that which TelcoX provides to itself, its affiliates or any other telecommunications carrier. The provisioning intervals for Network Elements shall PAGE General Terms and Conditions Page 4 be at least equal to, but no longer than, those that TelcoX provides to www.ra-academy.org 218 of 364
- 254. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example itself. TelcoX shall make available Network Elements to TelcoY on the same terms and conditions as TelcoX provides to its affiliates, subsidiaries, End Users and any other carriers. The quality of the interconnection between the networks of TelcoX and the network of Talk America shall be at a level that is equal to that which TelcoX provides itself, a subsidiary, an Affiliate, or any other party. The interconnection facilities shall be designed to meet the same technical criteria and service standards that are used within TelcoX's network and shall extend to a consideration of service quality as perceived by TelcoX's end users and service quality as perceived by TelcoY. 5. WHITE PAGES LISTINGS 5.1 TelcoX shall provide TelcoY and their customers access to white pages directory listings in the same manner TelcoX provides such listings to its own end users, and consistent with the following terms: 5.2 Listings. TelcoY shall provide all new, changed and deleted listings on a timely basis and TelcoX or its agent will include TelcoY residential and business customer listings in the appropriate White Pages (residential and business) or alphabetical directories. Directory listings will make no distinction between TelcoY and TelcoX subscribers. 5.2.1 Rates. So long as TelcoY provides subscriber listing information to TelcoX in accordance with Section 5.3 below, TelcoX shall provide to TelcoY one (1) primary White Pages listing per TelcoY subscriber at no charge other than applicable service order charges as set forth in Section A4 of the TelcoX General Subscriber Services Tariffs. These service order charges are applicable for resale services only. These service order charges are in addition to the OSS charges which are applicable for all services. 5.3 Procedures for Submitting TelcoY Subscriber Information are found in The TelcoX Business Rules for Local Ordering. 5.3.1 Notwithstanding any provision(s) to the contrary, TelcoY shall provide to TelcoX, and TelcoX shall accept, TelcoY's Subscriber Listing Information (SLI) relating to TelcoY's customers in the geographic area(s) covered by this Interconnection Agreement. TelcoY authorizes TelcoX to release all such TelcoY SLI provided to TelcoX by TelcoY to qualifying third parties via either license agreement or TelcoX's Directory Publishers Database Service (DPDS), General Subscriber Services Tariff, Section A38.2, as the same may be amended from time to time. Such TelcoY SLI shall be intermingled with TelcoX's own customer listings and listings of any other CLEC that has authorized a similar release of SLI. Where necessary, TelcoX will use good faith efforts to obtain state commission approval of any necessary modifications to Section A38.2 of its tariff to provide for release of third party directory listings, including modifications regarding listings to be released PAGE General Terms and Conditions Page 5 pursuant to such tariff and TelcoX's liability thereunder. TelcoX's obligation pursuant to this Section shall not arise in any particular state until the commission of such state has approved modifications to such tariff. 5.3.2 No compensation shall be paid to TelcoY for TelcoX's receipt of TelcoY SLI, or for the subsequent release to third parties of such SLI. In addition, to the extent TelcoX incurs costs to modify its systems to enable the release of TelcoY's SLI, or costs on an ongoing basis to administer the release of TelcoY SLI, TelcoY shall pay to TelcoX its proportionate share of the reasonable costs associated therewith. 5.3.3 Neither TelcoX nor any agent shall be liable for the content or accuracy of any SLI provided by TelcoY under this Agreement. Talk America shall indemnify, hold harmless and defend TelcoX and its agents from and against any damages, losses, liabilities, demands claims, suits, judgments, costs and expenses (including but not limited to reasonable attorneys' fees and expenses) arising from TelcoX's tariff obligations or otherwise and resulting from or arising out of any third party's claim of inaccurate TelcoY listings or use of the SLI provided pursuant to this Agreement. TelcoX may forward to TelcoY any complaints received by TelcoX relating to the accuracy or quality of TelcoY listings. 5.3.4 Listings and subsequent updates will be released consistent with TelcoX system changes and/or update scheduling requirements. 5.4 Unlisted/Non-Published Subscribers. TelcoY will be required to provide to TelcoX the names, addresses and telephone numbers of all Talk America customers that wish to be omitted from directories. 5.5 Inclusion of TelcoY Customers in Directory Assistance Database. TelcoX will include and maintain TelcoY subscriber listings in TelcoX's Directory Assistance databases at no recurring charge and Talk America shall provide such Directory Assistance listings at no recurring charge. Changes to subscriber listing information may be subject to non www.ra-academy.org 219 of 364
- 255. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example recurring charges as set forth in Section 5.2.1. TelcoX will update the Directory Assistance database with the same timeliness as for its retail end users. TelcoX and TelcoY will formulate appropriate procedures regarding lead-time, timeliness, format and content of listing information. 5.6 Listing Information Confidentiality. TelcoX will accord TelcoY's directory listing information the same level of confidentiality that TelcoX accords its own directory listing information, and TelcoX shall limit access to TelcoY's customer proprietary confidential directory information to those TelcoX employees or agents who are involved in the preparation of listings or directories and such information shall not be used for other purposes. PAGE General Terms and Conditions Page 6 5.7 Additional and Designer Listings. Additional and designer listings will be offered by TelcoX at tariffed rates as set forth in the General Subscriber Services Tariff. 5.7.1 Enhanced Listings. Where TelcoX offers to publish, at no charge, in its white pages directory Enhanced White Pages Listings to its retail customers, TelcoX shall publish such listings, at no charge and under the same terms and conditions, for TelcoY for its end users. Where TelcoX charges its retail customers for Enhanced White Pages Listings, TelcoX shall publish such listings under the same terms and conditions to TelcoY for its Customers at the applicable wholesale discount set forth in Attachment 1. 5.8 Directories. TelcoX or its agent shall make available White Pages directories and Yellow Pages directories to TelcoY subscribers at no charge and in the same manner as TelcoX provides directories to its own end users or as specified in a separate BAPCO agreement. 6. BONA FIDE REQUEST/NEW BUSINESS REQUEST PROCESS FOR FURTHER UNBUNDLING 6.1 TelcoX shall, upon request of TelcoY, provide to TelcoY access to its network elements at any technically feasible point for the provision of TelcoY's telecommunications service where such access is necessary and failure to provide access would impair the ability of Talk America to provide services that it seeks to offer. Any request by Talk America for access to a network element, interconnection option, or for the provisioning of any service or product that is not already available shall be treated as a Bona Fide Request/New Business Request (BFR/NBR), and shall be submitted to TelcoX pursuant to the BFR/NBR process as described in Attachment 11 to this Agreement. 6.2 TelcoY shall submit any BFR/NBR in writing to TelcoY's Account Manager. The BFR/NBR shall specifically identify the requested service date, technical requirements, space requirements and/or such specifications that clearly define the request such that TelcoX has sufficient information to analyze and prepare a response. The BFR/NBR also shall include TelcoY's designation of the request as being (i) pursuant to the Act or (ii) pursuant to the needs of the business. 6.3 Upon request, a service or product requested by another carrier through the BFR/NBR process shall be available pursuant to an amendment to TelcoY on the same rates, terms and conditions as set forth in the other carrier's amendment for such service or product. 7. LOCAL DIALING PARITY TelcoX shall provide local dialing parity as described in the Act and required by FCC rules, regulations and policies. TelcoY End Users shall not have to dial any greater number of digits than TelcoX End Users to complete the same call. In addition, TelcoY End Users shall experience at least the same service PAGE General Terms and Conditions Page 7 quality as TelcoX End Users in terms of post-dial delay, call completion rate and transmission quality. 8. COURT ORDERED REQUESTS FOR CALL DETAIL RECORDS AND OTHER SUBSCRIBER INFORMATION 8.1 Subpoenas Directed to TelcoX. Where TelcoX provides resold services or local switching for TelcoY, TelcoX shall respond to subpoenas and court ordered requests delivered directly to TelcoX for the purpose of providing call detail records when the targeted telephone numbers belong to TelcoY end users. Billing for such requests will be generated by TelcoX and directed to the law enforcement agency initiating the request. TelcoX shall maintain such information for TelcoY end users for the same length of time it maintains such information for its own end users. 8.2 Subpoenas Directed to TelcoY. Where TelcoX is providing to Talk America telecommunications services for resale or providing to TelcoY www.ra-academy.org 220 of 364
- 256. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example the local switching function, then TelcoY agrees that in those cases where TelcoY receives subpoenas or court ordered requests regarding targeted telephone numbers belonging to TelcoY end users, and where TelcoY does not have the requested information, TelcoY will advise the law enforcement agency initiating the request to redirect the subpoena or court ordered request to TelcoX for handling in accordance with 7.1 above. 8.3 In all other instances, where either Party receives a request for information involving the other Party's end user, the Party receiving the request will advise the law enforcement agency initiating the request to redirect such request to the other Party. 9. LIABILITY AND INDEMNIFICATION 9.1 TelcoX Liability. TelcoX shall take financial responsibility for its own actions in causing, or its lack of action in preventing, unbillable or uncollectible TelcoY revenues. 9.2 Liability for Acts or Omissions of Third Parties. Neither TelcoX nor TelcoY shall be liable for any act or omission of another telecommunications company providing a portion of the services provided under this Agreement. 9.3 Limitation of Liability. 9.3.1 With respect to any claim or suit, whether based in contract, tort or any other theory of legal liability, by TelcoY, any TelcoY customer or by any other person or entity, for damages associated with any of the services provided by TelcoX pursuant to or in connection with this Agreement, including but not limited to the installation, provision, preemption, termination, maintenance, repair or restoration of service, and PAGE General Terms and Conditions Page 8 subject to the provisions of the remainder of this Part A, TelcoX's liability shall be limited to an amount equal to the proportionate charge for the service provided pursuant to this Agreement for the period during which the service was affected. With respect to any claim or suit, whether based in contract, tort or any other theory of legal liability, by TelcoX, any TelcoX customer or by any other person or entity, for damages associated with any of the services provided by TelcoY pursuant to or in connection with this Agreement, including but not limited to the installation, provision, preemption, termination, maintenance, repair or restoration of service, and subject to the provisions of the remainder of this Part A, TelcoY 's liability shall be limited to an amount equal to the proportionate charge for the service provided pursuant to this Agreement for the period during which the service was affected. Notwithstanding the foregoing, claims for damages by TelcoY, any Talk America customer or any other person or entity resulting from the gross negligence or willful misconduct of TelcoX and claims for damages by TelcoY resulting from the failure of TelcoX to honor in one or more material respects any one or more of the material provisions of this Agreement shall not be subject to such limitation of liability. Likewise, claims for damages by TelcoX, any TelcoX customer or any other person or entity resulting from the gross negligence or willful misconduct of Talk America and claims for damages by TelcoX resulting from the failure of TelcoY to honor in one or more material respects any one or more of the material provisions of this Agreement shall not be subject to such limitation of liability. 9.3.2 Limitations in Tariffs. Subject to the provisions of 9.3.1, a Party may, in its sole discretion, provide in its tariffs and contracts with its Customer and third parties that relate to any service, product or function provided or contemplated under this Agreement, that to the maximum extent permitted by Applicable Law, such Party shall not be liable to Customer or third Party for (i) any Loss relating to or arising out of this Agreement, whether in contract, tort or otherwise, that exceeds the amount such party would have charged that applicable person for the service, product or function that gave rise to such Loss and (ii) Consequential Damages. To the extent that a Party elects not to place in its tariffs or contracts such limitations of liability, and the other Party incurs a Loss as a result thereof, such Party shall indemnify and reimburse the other Party for that portion of the Loss that would have been limited had the first Party included in its tariffs and contracts the limitations of liability that such other Party included in its own tariffs at the time of such Loss. 9.3.3 Neither TelcoX nor TelcoY shall be liable for damages to the other's terminal location, POI or other company's customers' premises resulting from the furnishing of a service, including, but not limited to, the installation and removal of equipment or associated wiring, except to the extent caused by a company's negligence or willful misconduct or by a company's failure to properly ground a local loop after disconnection. 9.3.4 Under no circumstance shall a Party be responsible or liable for indirect, incidental, or consequential damages, including, but not limited to, economic loss or lost PAGE www.ra-academy.org 221 of 364
- 257. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example General Terms and Conditions Page 9 business or profits, damages arising from the use or performance of equipment or software, or the loss of use of software or equipment, or accessories attached thereto, delay, error, or loss of data. In connection with this limitation of liability, each Party recognizes that the other Party may, from time to time, provide advice, make recommendations, or supply other analyses related to the Services, or facilities described in this Agreement, and, while each Party shall use diligent efforts in this regard, the Parties acknowledge and agree that this limitation of liability shall apply to provision of such advice, recommendations, and analyses. 9.4 Indemnification for Certain Claims. TelcoX and TelcoY providing services, their affiliates and their parent company, shall be indemnified, defended and held harmless by each other against any claim, loss or damage arising from the receiving company's use of the services provided under this Agreement pertaining to (1) claims for libel, slander, invasion of privacy or copyright infringement arising from the content of the receiving company's own communications, or (2) any claim, loss or damage claimed by the other company's customer arising from one company's use or reliance on the other company's services, actions, duties, or obligations arising out of this Agreement; provided that in the event of a claim arising under this Section 9.4(2), to the extent any claim, loss or damage is caused by the gross negligence or willful misconduct of the providing party, the receiving Party shall have no obligation to indemnify, defend or hold harmless the providing Party hereunder, subject to the other terms of this Section 9. 9.5 Disclaimer. EXCEPT AS SPECIFICALLY PROVIDED TO THE CONTRARY IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE OTHER PARTY CONCERNING THE SPECIFIC QUALITY OF ANY SERVICES, OR FACILITIES PROVIDED UNDER THIS AGREEMENT. THE PARTIES DISCLAIM, WITHOUT LIMITATION, ANY WARRANTY OR GUARANTEE OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING, OR FROM USAGES OF TRADE. 9.6 TelcoY and TelcoX will work cooperatively to minimize fraud associated with third-number billed calls, calling card calls, or any other services related to this Agreement. The Parties fraud minimization procedures are to be cost effective and implemented so as not to unduly burden or harm one Party as compared to the other. 10. INTELLECTUAL PROPERTY RIGHTS AND INDEMNIFICATION 10.1 No License. No patent, copyright, trademark or other proprietary right is licensed, granted or otherwise transferred by this Agreement. TelcoY is strictly prohibited from any use, including but not limited to in sales, in marketing or advertising of telecommunications services, of any TelcoX name, service mark or trademark. Notwithstanding the foregoing, TelcoY may use TelcoX's name (1) in response to inquiries of customers or potential customers regarding the PAGE General Terms and Conditions Page 10 source of the underlying service or the identity of repair or service technicians under this Agreement, and (2) TelcoY may use the TelcoX name in comparative advertising so long as the reference is truthful and factual, does not relate to the source of the underlying service and does not imply any agency relationship, partnership, endorsement, sponsorship or affiliation by or with TelcoX. 10.2 Ownership of Intellectual Property. Any intellectual property which originates from or is developed by a Party shall remain the exclusive property of that Party. Except for a limited license to use patents or copyrights to the extent necessary for the Parties to use any facilities or equipment (including software) or to receive any service solely as provided under this Agreement, no license in patent, copyright, trademark or trade secret, or other proprietary or intellectual property right now or hereafter owned, controlled or licensable by a Party, is granted to the other Party or shall be implied or arise by estoppel. It is the responsibility of each Party to ensure at no additional cost to the other Party that it has obtained any necessary licenses in relation to intellectual property of third Parties used in its network that may be required to enable the other Party to use any facilities or equipment (including software), to receive any service, or to perform its respective obligations under this Agreement. 10.3 Indemnification. The Party providing a service pursuant to this Agreement will defend the Party receiving such service or data provided as a result of such service against claims of infringement arising solely from the use by the receiving Party of such service in the manner contemplated under this Agreement and will indemnify the receiving Party for any damages awarded based solely on such claims in accordance with Section 9 preceding. 10.4 Claim of Infringement. In the event that use of any facilities or equipment (including software), becomes, or in the reasonable judgment of the Party who owns the affected network is likely to become, the subject of a claim, action, suit, or proceeding based on intellectual property infringement, then said Party shall promptly and at its sole expense and sole option, but www.ra-academy.org 222 of 364
- 258. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example subject to the limitations of liability set forth below: 10.4.1 modify or replace the applicable facilities or equipment (including software) while maintaining form and function, or 10.4.2 obtain a license sufficient to allow such use to continue. 10.4.3 In the event 10.4.1 or 10.4.2 are commercially unreasonable, then said Party may, terminate, upon reasonable notice, this contract with respect to use of, or services provided through use of, the affected facilities or equipment (including software), but solely to the extent required to avoid the infringement claim. 10.5 Exception to Obligations. Neither Party's obligations under this Section shall apply to the extent the infringement is caused by: (i) modification of the facilities or PAGE General Terms and Conditions Page 11 equipment (including software) by the indemnitee; (ii) use by the indemnitee of the facilities or equipment (including software) in combination with equipment or facilities (including software) not provided or authorized by the indemnitor, provided the facilities or equipment (including software) would not be infringing if used alone; (iii) conformance to specifications of the indemnitee which would necessarily result in infringement; or (iv) continued use by the indemnitee of the affected facilities or equipment (including software) after being placed on notice to discontinue use as set forth herein. 10.6 Exclusive Remedy. The foregoing shall constitute the Parties' sole and exclusive remedies and obligations with respect to a third party claim of intellectual property infringement arising out of the conduct of business under this Agreement. 10.7 Dispute Resolution. Any claim arising under this Section 10 shall be excluded from the dispute resolution procedures set forth in Section 13 and shall be brought in a court of competent jurisdiction. 11. PROPRIETARY AND CONFIDENTIAL INFORMATION 11.1 Proprietary and Confidential Information. It may be necessary for TelcoX and TelcoY, each as the Discloser, to provide to the other Party, as Recipient, certain proprietary and confidential information (including trade secret information) including but not limited to technical, financial, marketing, staffing and business plans and information, strategic information, proposals, request for proposals, specifications, drawings, maps, prices, costs, costing methodologies, procedures, processes, business systems, software programs, techniques, customer account data, call detail records and like information. This proprietary and confidential information also includes, but is not limited to all orders for Services and Network Elements placed by either Party, and information that would constitute customer proprietary network information and recorded usage data, whether disclosed by the Discloser or otherwise acquired by the Recipient in the course of the performance of this Agreement. (This proprietary and confidential information is collectively the Information). All such Information conveyed in writing or other tangible form shall be clearly marked with a confidential or proprietary legend. Notwithstanding the foregoing, the Parties agree that all orders for Services and Network Elements and information that would constitute customer proprietary network information and recorded usage data is proprietary and confidential information and as such no confidential or proprietary legend is required. Information conveyed orally by the Discloser to Recipient shall be designated as proprietary and confidential at the time of such oral conveyance, shall be reduced to writing by the Discloser within forty-five (45) days thereafter, and shall be clearly marked with a confidential or proprietary legend. All information provided to Recipient by Discloser shall be treated as proprietary and confidential. 11.2 Use and Protection of Information. Recipient shall use the Information solely for the purpose(s) of performing this Agreement, and Recipient shall protect PAGE General Terms and Conditions Page 12 Information from any use, distribution or disclosure except as permitted hereunder. Recipient will use the same standard of care to protect Information as Recipient uses to protect its own similar confidential and proprietary information, but not less than a reasonable standard of care. Recipient may disclose Information solely to the Authorized Representatives of the Recipient who (a) have a substantive need to know such Information in connection with performance of the Agreement; (b) have been advised of the confidential and proprietary nature of the Information; and (c) have personally agreed in writing to protect from unauthorized disclosure all confidential and proprietary information, of whatever source, to which they have access in the course of their employment. Unless otherwise agreed, Recipient shall not permit employees or agents of Recipient with end user marketing, product development, or any other non-Discloser purpose, to have www.ra-academy.org 223 of 364
- 259. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example access to Information under any circumstances, and in no event shall the Information be used to create a lead or other information base for a winback sales program. Authorized Representatives are the officers, directors and employees of Recipient and its Affiliates, as well as Recipient's and its Affiliates' consultants, contractors, counsel and agents. 11.3 Exceptions. Discloser's Information does not include: (a) any information publicly disclosed by Discloser; (b) any information Discloser in writing authorizes Recipient to disclose without restriction; (c) any information already lawfully known to Recipient at the time it is disclosed by the Discloser, without an obligation to keep confidential; or (d) any information Recipient lawfully obtains from any source other than Discloser, provided that such source lawfully disclosed and/or independently developed such information. If Recipient is required to provide Information to any court or government agency pursuant to written court order, subpoena, regulation or process of law, Recipient must first provide Discloser with prompt written notice of such requirement and cooperate with Discloser to appropriately protect against or limit the scope of such disclosure. To the fullest extent permitted by law, Recipient will continue to protect as confidential and proprietary all Information disclosed in response to a written court order, subpoena, regulation or process of law. 11.4 Ownership, Copying Return of Information. Information remains at all times the property of Discloser. Recipient may make tangible or electronic copies, notes, summaries or extracts of Information only as necessary for use as authorized herein. All such tangible or electronic copies, notes, summaries or extracts must be marked with the same confidential and proprietary notice as appears on the original. Upon Discloser's request, all or any requested portion of the Information (including, but not limited to, tangible and electronic copies, notes, summaries or extracts of any information) will be promptly returned to Discloser or destroyed according to Discloser's request, and Recipient will provide Discloser with written certification stating that such Information has been returned or destroyed. 11.5 Recipient agrees to use the Information solely for the purposes of negotiations pursuant to 47 U.S.C. 251 or in performing its obligations under this Agreement and for no other entity or purpose, except as may be otherwise agreed to in writing PAGE General Terms and Conditions Page 13 by the Parties. Nothing herein shall prohibit Recipient from providing information requested by the Federal Communications Commission or a state regulatory agency with jurisdiction over this matter, or to support a request for arbitration or an allegation of failure to negotiate in good faith, provided Recipient simultaneously notifies the other Party and provides the other Party with a copy of the information. 11.6 Recipient agrees not to publish or use the Information for any advertising, sales promotions, press releases, or publicity matters that refer either directly or indirectly to the Information or to the Discloser or any of its affiliated companies. 11.7 The disclosure of Information neither grants nor implies any license to the Recipient under any trademark, patent, copyright, or application which is now or may hereafter be owned by the Discloser. 11.8 Equitable Relief. Recipient acknowledges and agrees that any breach or threatened breach of this Agreement is likely to cause Discloser irreparable harm for which money damages may not be an appropriate or sufficient remedy. Recipient therefore agrees that Discloser or its Affiliates, as the case may be, are entitled to receive injunctive or other equitable relief to remedy or prevent any breach or threatened breach of this Agreement. Such remedy is not the exclusive remedy for any breach or threatened breach of this Agreement, but is in addition to all other rights and remedies available at law or in equity. 11.9 Survival of Confidentiality Obligations. The Parties' rights and obligations under this Section 11 shall survive and continue in effect until two (2) years after the expiration or termination date of this Agreement with regard to all Information exchanged during the term of this Agreement. Thereafter, the Parties' rights and obligations hereunder survive and continue in effect with respect to any Information that is a trade secret under applicable law. 11.10 Assignments 11.10.1 Any assignment by either Party to any non-affiliated entity of any right, obligation or duty, or of any other interest hereunder, in whole or in part, without the prior written consent of the other Party shall be void. Such consent will not be unreasonably withheld. A Party may assign this Agreement or any right, obligation, duty or other interest hereunder to an Affiliate of the Party without the consent of the other Party; provided, however, that the assigning Party shall notify the other Party in writing of such assignment thirty (30) days prior to the Effective Date thereof and, provided further, if the assignee is an assignee of Talk America, the assignee must provide evidence of Commission CLEC certification. The Parties shall amend this Agreement to reflect such www.ra-academy.org 224 of 364
- 260. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example assignments and shall work cooperatively to implement any changes required due to such assignment. All obligations and duties of any Party under this Agreement shall be binding on all successors in interest and assigns of such Party. No assignment or delegation PAGE General Terms and Conditions Page 14 hereof shall relieve the assignor of its obligations under this Agreement in the event that the assignee fails to perform such obligations. 12. ESCALATION PROCEDURES Each Party hereto shall provide the other party hereto with the names and telephone numbers or pagers of their respective managers up to the Vice Presidential level for the escalation of unresolved matters relating to their performance of their duties under this Agreement. Each Party shall supplement and update such information as necessary to facilitate prompt resolution of such matters. Each Party further agrees to establish an automatic internal escalation procedure relating to unresolved disputes arising under this Agreement. 13. RESOLUTION OF DISPUTES 13.1 Except as otherwise provided herein, any dispute, controversy or claim (individually and collectively, a Dispute) arising under this Agreement shall be resolved in accordance with the procedures set forth in this Section. In the event of a Dispute between the Parties relating to this Agreement, and upon the written request of either Party, each of the Parties shall appoint within ten (10) calendar days after a Party's receipt of such request, a designated representative who has authority to settle the Dispute and who is at a higher level of management than the persons with direct responsibility for administration of this Agreement. The designated representatives shall meet as often as they reasonably deem necessary in order to discuss the Dispute and negotiate in good faith in an effort to resolve such Dispute. The specific format for such discussions will be left to the discretion of the designated representatives; however, all reasonable requests for relevant information made by one Party to the other Party shall be honored. If the Parties are unable to resolve issues related to a Dispute within thirty (30) days after a Party's request is made for appointment of designated representatives as set forth above, either Party may seek relief from the appropriate state regulatory agency of any Dispute upon which the Parties hereto are unable to reach agreement or may seek such other relief to which it is entitled to under Applicable Law. Notwithstanding the foregoing, in no event shall the Parties permit the pendency of a Dispute to disrupt service to any TelcoY or TelcoX End User, unless such service is damaging or interfering with customer services or network operations. 13.2 The Parties agree that this Section does not prevent either Party from seeking temporary equitable remedies, including temporary restraining orders. A request by a Party to a court or a regulatory authority for interim measures or equitable relief shall not be deemed a waiver of the obligation to comply with the Dispute Resolution provisions. 14. TAXES 14.1 Definition. For purposes of this Section, the terms taxes and fees shall include but not limited to federal, state or local sales, use, excise, gross receipts or other PAGE General Terms and Conditions Page 15 taxes or tax-like fees of whatever nature and however designated (including tariff surcharges and any fees, charges or other payments, contractual or otherwise, for the use of public streets or rights of way, whether designated as franchise fees or otherwise) imposed, or sought to be imposed, on or with respect to the services furnished hereunder or measured by the charges or payments therefore, excluding any taxes levied on income. 14.2 Taxes and Fees Imposed Directly On Either Providing Party or Purchasing Party. 14.2.1 Taxes and fees imposed on the providing Party, which are not permitted or required to be passed on by the providing Party to its customer, shall be borne and paid by the providing Party. 14.2.2 Taxes and fees imposed on the purchasing Party, which are not required to be collected and/or remitted by the providing Party, shall be borne and paid by the purchasing Party. 14.3 Taxes and Fees Imposed on Purchasing Party But Collected And Remitted By Providing Party. 14.3.1 Taxes and fees imposed on the purchasing Party shall be borne by the purchasing Party, even if the obligation to collect and/or remit such taxes or fees is placed on the providing Party. www.ra-academy.org 225 of 364
- 261. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example 14.3.2 To the extent permitted by applicable law, any such taxes and/or fees shall be shown as separate items on applicable billing documents between the Parties. Notwithstanding the foregoing, the purchasing Party shall remain liable for any such taxes and fees regardless of whether they are actually billed by the providing Party at the time that the respective service is billed. 14.3.3 If the purchasing Party determines that in its opinion any such taxes or fees are not payable, the providing Party shall not bill such taxes or fees to the purchasing Party if the purchasing Party provides written certification, reasonably satisfactory to the providing Party, stating that it is exempt or otherwise not subject to the tax or fee, setting forth the basis therefor, and satisfying any other requirements under applicable law. If any authority seeks to collect any such tax or fee that the purchasing Party has determined and certified not to be payable, or any such tax or fee that was not billed by the providing Party, the purchasing Party may contest the same in good faith, at its own expense. In any such contest, the purchasing Party shall promptly furnish the providing Party with copies of all filings in any proceeding, protest, or legal challenge, all rulings issued in connection therewith, and all correspondence between the purchasing Party and the taxing authority. 14.3.4 In the event that all or any portion of an amount sought to be collected must be paid in order to contest the imposition of any such tax or fee, or to avoid the existence of a lien on the assets of the providing Party during the pendency of such contest, the purchasing Party shall be responsible for such payment and shall be entitled to the benefit of any refund or recovery. PAGE General Terms and Conditions Page 16 14.3.5 If it is ultimately determined that any additional amount of such a tax or fee is due to the imposing authority, the purchasing Party shall pay such additional amount, including any interest and penalties thereon. 14.3.6 Notwithstanding any provision to the contrary, the purchasing Party shall protect, indemnify and hold harmless (and defend at the purchasing Party's expense) the providing Party from and against any such tax or fee, interest or penalties thereon, or other charges or payable expenses (including reasonable attorney fees) with respect thereto, which are incurred by the providing Party in connection with any claim for or contest of any such tax or fee. 14.3.7 Each Party shall notify the other Party in writing of any assessment, proposed assessment or other claim for any additional amount of such a tax or fee by a taxing authority; such notice to be provided, if possible, at least ten (10) days prior to the date by which a response, protest or other appeal must be filed, but in no event later than thirty (30) days after receipt of such assessment, proposed assessment or claim. 14.4 Taxes and Fees Imposed on Providing Party But Passed On To Purchasing Party. 14.4.1 Taxes and fees imposed on the providing Party, which are permitted or required to be passed on by the providing Party to its customer, shall be borne by the purchasing Party. 14.4.2 To the extent permitted by applicable law, any such taxes and/or fees shall be shown as separate items on applicable billing documents between the Parties. Notwithstanding the foregoing, the purchasing Party shall remain liable for any such taxes and fees regardless of whether they are actually billed by the providing Party at the time that the respective service is billed. 14.4.3 If the purchasing Party disagrees with the providing Party's determination as to the application or basis for any such tax or fee, the Parties shall consult with respect to the imposition and billing of such tax or fee. Notwithstanding the foregoing, the providing Party shall retain ultimate responsibility for determining whether and to what extent any such taxes or fees are applicable, and the purchasing Party shall abide by such determination and pay such taxes or fees to the providing Party. The providing Party shall further retain ultimate responsibility for determining whether and how to contest the imposition of such taxes and fees; provided, however, that any such contest undertaken at the request of the purchasing Party shall be at the purchasing Party's expense. 14.4.4 In the event that all or any portion of an amount sought to be collected must be paid in order to contest the imposition of any such tax or fee, or to avoid the existence of a lien on the assets of the providing Party during the pendency of such contest, the purchasing Party shall be responsible for such payment and shall be entitled to the benefit of any refund or recovery. PAGE General Terms and Conditions Page 17 14.4.5 If it is ultimately determined that any additional amount of such a tax or fee is due to the imposing authority, the purchasing Party shall pay www.ra-academy.org 226 of 364
- 262. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example such additional amount, including any interest and penalties thereon. 14.4.6 Notwithstanding any provision to the contrary, the purchasing Party shall protect indemnify and hold harmless (and defend at the purchasing Party's expense) the providing Party from and against any such tax or fee, interest or penalties thereon, or other reasonable charges or payable expenses (including reasonable attorney fees) with respect thereto, which are incurred by the providing Party in connection with any claim for or contest of any such tax or fee. 14.4.7 Each Party shall notify the other Party in writing of any assessment, proposed assessment or other claim for any additional amount of such a tax or fee by a taxing authority; such notice to be provided, if possible, at least ten (10) days prior to the date by which a response, protest or other appeal must be filed, but in no event later than thirty (30) days after receipt of such assessment, proposed assessment or claim. 14.5 Mutual Cooperation. In any contest of a tax or fee by one Party, the other Party shall cooperate fully by providing records, testimony and such additional information or assistance as may reasonably be necessary to pursue the contest. Further, the other Party shall be reimbursed for any reasonable and necessary out of- pocket copying and travel expenses incurred in assisting in such contest. 15. NETWORK MAINTENANCE AND MANAGEMENT 15.1 The Parties shall work cooperatively to implement this Agreement. The Parties shall exchange appropriate information (e.g., maintenance contact numbers, network information, information required to comply with law enforcement and other security agencies of the Government, etc.) as reasonably required to implement and perform this Agreement. 15.2 Each Party hereto shall design, maintain and operate their respective networks as necessary to ensure that the other Party hereto receives service quality which is consistent with generally accepted industry standards at least at parity with the network service quality given to itself, its Affiliates, its End Users. 15.3 Neither Party shall use any service or facility provided under this Agreement in a manner that impairs the quality of service to other telecommunications carriers' or to either Party's End Users. Each Party will provide the other Party notice of any such impairment at the earliest practicable time. 15.4 TelcoX agrees to provide TelcoY prior notice consistent with applicable FCC rules and the Act of changes in the information necessary for the transmission and routing of services using TelcoX's facilities or networks, as well as other changes that affect the interoperability of those respective facilities and networks. This Agreement is not intended to limit TelcoX's ability to upgrade its network through the incorporation of new equipment, new software or otherwise so long as PAGE General Terms and Conditions Page 18 such upgrades are not inconsistent with TelcoX's obligations to Talk America under the terms of this Agreement. 16. FORCE MAJEURE 16.1 In the event performance of this Agreement, or any obligation hereunder, is either directly or indirectly prevented, restricted, or interfered with by reason of fire, flood, earthquake or like acts of God, wars, acts of terriorism, revolution, civil commotion, explosion, acts of public enemy, embargo, acts of the government in its sovereign capacity, labor difficulties, including without limitation, strikes, slowdowns, picketing, or boycotts, unavailability of equipment from vendor, changes requested by Customer, or any other circumstances beyond the reasonable control and without the fault or negligence of the Party affected, the Party affected, upon giving prompt notice to the other Party, shall be excused from such performance on a day-to-day basis to the extent of such prevention, restriction, or interference (and the other Party shall likewise be excused from performance of its obligations on a day-to-day basis until the delay, restriction or interference has ceased); provided however, that the Party so affected shall use diligent efforts to avoid or remove such causes of non-performance and both Parties shall proceed whenever such causes are removed or cease. 17. ADOPTION OF AGREEMENTS 17.1 TelcoX shall make available, pursuant to 47 USC 252 and the FCC rules and regulations regarding such availability, to TelcoY any interconnection, service, or network element provided under any other agreement filed and approved pursuant to 47 USC 252 in that respective state. The Parties shall adopt all rates, terms and conditions concerning such other interconnection, service or network element and any other rates, terms and conditions that are legitimately related to or were negotiated in exchange for or in conjunction with the interconnection, service or network element being adopted. The rates, terms and conditions adopted by the Parties shall be effective as of the date the Agreement is amended. The adopted interconnection, service, or network element and agreement shall www.ra-academy.org 227 of 364
- 263. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example apply to the same states as such other agreement. The term of the adopted agreement or provisions shall expire on the same date as set forth in the agreement which was adopted. 18. MODIFICATION OF AGREEMENT 18.1 If TelcoY changes its name or makes changes to its company structure or identity due to a merger, acquisition, transfer or any other reason, it is the responsibility of TelcoY to notify TelcoX of said change and request that an amendment to this Agreement, if necessary, be executed to reflect said change. 18.2 No modification, amendment, supplement to, or waiver of the Agreement or any of its provisions shall be effective and binding upon the Parties unless it is made in writing and duly signed by the Parties. PAGE General Terms and Conditions Page 19 18.3 In the event that any effective legislative, regulatory, judicial or other legal action materially affects any material terms of this Agreement, or the ability of TelcoY or TelcoX to perform any material terms of this Agreement, TelcoY or TelcoX may, on fifteen (15) days' written notice require that such terms be renegotiated, and the Parties shall renegotiate in good faith such mutually acceptable new terms as may be required. In the event that such new terms are not renegotiated within forty-five (45) days after such notice, the Dispute shall be referred to the Dispute Resolution procedure set forth in this Agreement. In the event that the Parties reach agreement as to the new terms consistent with the above, the Parties agree to make the effective date of such amendment consistent with the effective date specified in the action or, if the action is silent, then as negotiated between the Parties on a case by case basis. 18.4 Notwithstanding anything to the contrary in this Agreement, this Agreement shall not be amended or modified after the expiration date hereof as set forth in Section 2 above. 19. NON-WAIVER OF LEGAL RIGHTS 19.1 Execution of this Agreement by either Party does not confirm or infer that the executing Party agrees with any decision(s) issued pursuant to the Act and the consequences of those decisions on specific language in this Agreement. Neither Party waives its rights to appeal or otherwise challenge any such decision(s) and each Party reserves all of its rights to pursue any and all legal and/or equitable remedies, including appeals of any such decision(s). 20. INDIVISIBILITY 20.1 The Parties intend that this Agreement be indivisible and nonseverable, and each of the Parties acknowledges that it has assented to all of the covenants and promises in this Agreement as a single whole and that all of such covenants and promises, taken as a whole, constitute the essence of the contract. Without limiting the generality of the foregoing, each of the Parties acknowledges that any provision by TelcoX of Collocation Space (or space pursuant to Adjacent Arrangement) under this Agreement is solely for the purpose of facilitating the provision of other services under this Agreement and that neither Party would have contracted with respect to the provisioning of Collocation Space (or space pursuant to Adjacent Arrangement) if the covenants and promises of the other Party with respect to the other services provided for under this Agreement had not been made. The Parties further acknowledge that this Agreement is intended to constitute a single transaction, that the obligations of the Parties under this Agreement are interdependent, and that payment obligations under this Agreement are intended to be recoupable against other payment obligations under this Agreement. 21. WAIVERS PAGE General Terms and Conditions Page 20 21.1 A failure or delay of either Party to enforce any of the provisions hereof, to exercise any option which is herein provided, or to require performance of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or options, and each Party, notwithstanding such failure, shall have the right thereafter to insist upon the performance of any and all of the provisions of this Agreement. 22. GOVERNING LAW 22.1 To the extent any provisions of this Agreement are subject to the jurisdiction of the FCC, applicable federal rules and regulations shall govern those provisions. To the extent any provisions of this Agreement are subject to the jurisdiction of the state Commission, applicable Commission rules and regulations shall govern those provisions. All other provisions of this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of StateX, without regard to its www.ra-academy.org 228 of 364
- 264. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example conflict of laws principles. 23. ARM'S LENGTH NEGOTIATIONS 23.1 This Agreement was executed after arm's length negotiations between the undersigned Parties and reflects the conclusion of the undersigned that this Agreement is in the best interests of all Parties. 24. NOTICES 24.1 Every notice, consent, approval, or other communications required or contemplated by this Agreement shall be in writing and shall be delivered by hand, by overnight courier or by US mail postage prepaid, address to: TELCOX TELECOMMUNICATIONS, INC. Account Team 600 North 19th Street Birmingham, StateZ 35203 and General Attorney - COU Suite 4300 675 W. Peachtree St. Atlanta, GA 30375 PAGE General Terms and Conditions Page 21 TELCOY Senior Vice President, Operations 12020 Sunrise Valley Drive Suite 250 Reston, VA 20191 and General Counsel 6805 Route 202 New Hope, PA 18938 and Director, Carrier Relations 12001 Science Drive, Suite 130 Orlando, FL 32826 or at such other address as the intended recipient previously shall have designated by written notice to the other Party. 24.2 Where specifically required, notices shall be by certified or registered mail. Unless otherwise provided in this Agreement, notice by mail shall be effective on the date it is officially recorded as delivered by return receipt or equivalent, and in the absence of such record of delivery, it shall be presumed to have been delivered the fifth day, or next business day after the fifth day, after it was deposited in the mails. 24.3 Notwithstanding the foregoing, TelcoX shall provide TelcoY 45-day advance notice, to the extent that TelcoX is afforded 45 days notice from the Commission, via Internet posting of price changes, changes to the terms and conditions of services available for resale per Commission Orders. To the extent that revisions occur between the time TelcoX notifies TelcoY of changes under this Agreement and the time the changes are scheduled to be implemented, TelcoX will immediately notify TelcoY of such revisions consistent with its internal notification process. TelcoY may not hold TelcoX responsible for any cost incurred as a result of such revisions, unless such costs are incurred as a result of TelcoX's intentional misconduct. TelcoY may not utilize any notice given under this subsection concerning a service to market resold offerings of that service in advance of TelcoX. TelcoX will also post changes to business processes and policies, notices of new service offerings, and changes to service offerings not requiring an amendment to this Agreement, notices required to be posted to TelcoX's website, and any other information of general applicability to CLECs. 25. RULE OF CONSTRUCTION PAGE General Terms and Conditions Page 22 25.1 No rule of construction requiring interpretation against the drafting Party hereof shall apply in the interpretation of this Agreement. 26. HEADINGS OF NO FORCE OR EFFECT 26.1 The headings of Articles and Sections of this Agreement are for convenience of reference only, and shall in no way define, modify or restrict the www.ra-academy.org 229 of 364
- 265. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example meaning or interpretation of the terms or provisions of this Agreement. 27. MULTIPLE COUNTERPARTS 27.1 This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which shall together constitute but one and the same document. 28. IMPLEMENTATION OF AGREEMENT 28.1 If TelcoY is a facilities based provider or a facilities based and resale provider, this section shall apply. Within 60 days of the execution of this Agreement, the Parties may adopt a schedule for the implementation of the Agreement. The schedule shall state with specificity time frames for submission of including but not limited to, network design, interconnection points, collocation arrangement requests, pre-sales testing and full operational time frames for the business and residential markets. 29. FILING OF AGREEMENT 29.1 Upon execution of this Agreement it shall be filed with the appropriate state regulatory agency pursuant to the requirements of Section 252 of the Act, and the Parties shall share equally any filing fees therefor. If the regulatory agency imposes any filing or public interest notice fees regarding the filing or approval of the Agreement, TelcoY shall be responsible for publishing the required notice and the publication and/or notice costs shall be borne by TelcoY. Notwithstanding the foregoing, this Agreement shall not be submitted for approval by the appropriate state regulatory agency unless and until such time as TelcoY is duly certified as a local exchange carrier in such state, except as otherwise required by a state Commission. 30. COMPLIANCE WITH APPLICABLE LAW 30.1 Each Party shall comply at its own expense with Applicable Law. 31. NECESSARY APPROVALS 31.1 Each Party shall be responsible for obtaining and keeping in effect all approvals from, and rights granted by, governmental authorities, building and property owners, other carriers, and any other persons that may be required in connection with the performance of its obligations under this Agreement. Each Party shall reasonably cooperate with the other Party in obtaining and maintaining any PAGE General Terms and Conditions Page 23 required approvals and rights for which such Party is responsible. 32. GOOD FAITH PERFORMANCE 32.1 Each Party shall act in good faith in its performance under this Agreement and, in each case in which a Party's consent or agreement is required or requested hereunder, such Party shall not unreasonably withhold or delay such consent or agreement. 33. NONEXCLUSIVE DEALINGS 33.1 This Agreement does not prevent either Party from providing or purchasing services to or from any other person nor, except as provided in Section 252(i) of the Act, does it obligate either Party to provide or purchase any services (except insofar as the Parties are obligated to provide access to Interconnection, services and Network Elements to TelcoY as a requesting carrier under the Act). 34. RATE TRUE-UP 34.1 This section applies to Local Interconnection and/or Unbundled Network Elements and Other Services rates that are interim or expressly subject to true-up under this Agreement. 34.2 The interim prices for Network Elements and Other Services and Local Interconnection shall be subject to true-up according to the following procedures: 34.3 The interim prices shall be trued-up, either up or down, based on final prices determined either by further agreement between the Parties, or by a final order (including any appeals) of the Commission which final order meets the criteria of (3) below. The Parties shall implement the true-up by comparing the actual volumes and demand for each item, together with interim prices for each item, with the final prices determined for each item. Each Party shall keep its own records upon which the true-up can be based, and any final payment from one Party to the other shall be in an amount agreed upon by the Parties based on such records. In the event of any disagreement as between the records or the Parties regarding the amount of such true-up, the Parties agree that the body having jurisdiction over the matter shall be called upon to resolve such differences, or the Parties may mutually agree to submit the matter to the Dispute Resolution process in accordance with the provisions of Section 13 of the General Terms and Conditions and Attachment 1 of this Agreement. www.ra-academy.org 230 of 364
- 266. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example 34.4 The Parties may continue to negotiate toward final prices, but in the event that no such Agreement is reached within nine (9) months, either Party may petition the Commission to resolve such disputes and to determine final prices for each item. Alternatively, upon mutual agreement, the Parties may submit the matter to the Dispute Resolution Process set forth in Section 13 of the General Terms and Conditions and Attachment 1 of this Agreement, so long as they file the resulting PAGE General Terms and Conditions Page 24 Agreement with the Commission as a negotiated Agreement under Section 252(e) of the Act. 34.5 An effective order of the Commission that forms the basis of a true-up shall be based upon cost studies submitted by either or both Parties to the Commission and shall be binding upon TelcoX and TelcoY specifically or upon all carriers generally, such as a generic cost proceeding. 35. SURVIVAL 35.1 The Parties' obligations under this Agreement which by their nature are intended to continue beyond the termination or expiration of this Agreement shall survive the termination or expiration of this Agreement. 36. ESTABLISHMENT OF SERVICE In accordance with FCC Slamming Liability Rules, TelcoX will reestablish service with the appropriate local service provider and will assess Talk America as the CLEC initiating the alleged unauthorized change, the appropriate nonrecurring charges, as set forth in Section A4 of the General Subscriber Service Tariff. 37. ENTIRE AGREEMENT 37.1 This Agreement and its Attachments, incorporated herein by this reference, sets forth the entire understanding and supersedes prior interconnection agreements between the Parties relating to the subject matter contained herein and merges all prior discussions between them. Any orders placed under prior agreements between the Parties shall be governed by the terms of this Agreement. Neither Party shall be bound by any definition, condition, provision, representation, warranty, covenant or promise other than as expressly stated in this Agreement or as is contemporaneously or subsequently set forth in writing and executed by a duly authorized officer or representative of the Party to be bound thereby. 37.2 This Agreement includes Attachments with provisions for the following: Resale Network Elements and Other Services Network Interconnection Collocation Access to Numbers and Number Portability Pre-Ordering, Ordering and Provisioning, Maintenance and Repair Billing and Billing Accuracy Certification Rights-of-Way, Conduits and Pole Attachments Performance Measurements TelcoX Disaster Recovery Plan Bona Fide Request/New Business Request Process PAGE General Terms and Conditions Page 25 TelcoY shall be permitted, at its discretion, to configure these services with respect to any manner necessary to provide telephone exchange or exchange access service to TelcoY End Users. 37.3 THE FOLLOWING SERVICES ARE INCLUDED AS OPTIONS FOR PURCHASE BY TALK AMERICA. TELCOY MAY ELECT TO PURCHASE SAID SERVICES BY WRITTEN REQUEST TO ITS ACCOUNT MANAGER IF APPLICABLE: Optional Daily Usage File (ODUF) Enhanced Optional Daily Usage File (EODUF) Access Daily Usage File (ADUF) Line Information Database (LIDB) Storage Centralized Message Distribution Service (CMDS) Calling Name (CNAM) LNP Data Base Query Service 38. RELATIONSHIP OF PARTIES This Agreement shall not establish, be interpreted as establishing, or be used by either Party to establish, or to represent their relationship as any form of agency, partnership or joint venture. Neither Party shall have any authority to bind the other or to act as an agent for the other unless written authority, separate from this Agreement, is provided. Nothing in this Agreement shall be construed as providing for the sharing of profits www.ra-academy.org 231 of 364
- 267. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example or losses arising out of the efforts of either or both of the Parties. Nothing herein shall be construed as making either Party responsible or liable for the obligations and undertakings of the other Party. 39. THIRD PARTY BENEFICIARIES This Agreement does not provide, and shall not be construed to provide, third parties with any benefit, remedy, claim, liability, reimbursement, cause of action, or other privilege. 40. COOPERATION ON PREVENTING END USER FRAUD The Parties agree to cooperate fully with one another to investigate, minimize, prevent, and take corrective action in cases of fraud. 41. INDEPENDENT CONTRACTORS Each Party is an independent contractor, and has and hereby retains the right to exercise full control of and supervision over its own performance of its obligations under this Agreement, and retains full control over the employment, direction, compensation and discharge of its employees assisting in the performance of such obligations. Each Party shall be solely responsible for all matters relating to payment of such employees, including compliance with social security taxes, withholding taxes and all other regulations governing such matters. Subject to the PAGE General Terms and Conditions Page 26 limitations on liability and except as otherwise provided in this Agreement, each Party shall be responsible for (i) its own acts and performance of all obligations imposed by Applicable Law in connection with its activities, legal status and property, real or personal and, (ii) the acts of its own Affiliates, employees, agents and contractors during the performance of the Party's obligations hereunder. 42. SUBCONTRACTING If any obligation is performed through a subcontractor, each Party shall remain fully responsible for the performance of this Agreement in accordance with its terms, including any obligations either Party performs through subcontractors, and each Party shall be solely responsible for payments due the Party's subcontractors. No contract, subcontract or other Agreement entered into by either Party with any third party in connection with the provision of any facilities or services provided herein, shall provide for any indemnity, guarantee or assumption of liability by, or other obligation of, the other Party to this Agreement with respect to such arrangement, except as consented to in writing by the other Party. No subcontractor shall be deemed a third party beneficiary for any purposes under this Agreement. Any subcontractor who gains access to CPNI or Confidential Information covered by this Agreement shall be required by the subcontracting Party to protect such CPNI or Confidential Information to the same extent that the subcontracting Party is required to protect the same under the terms of this Agreement. 43. CUSTOMER INQUIRIES AND DISPARAGEMENT 43.1 Each Party shall refer all questions regarding the other Party's services or products directly to the other Party at a telephone number specified by that Party. 43.2 Each Party shall ensure that each of their representatives who receive inquiries regarding the other Party's services: (i) provide the numbers described in Section 43.1 to callers who inquire about the other Party's services or products, and (ii) do not in any way disparage or discriminate against the other Party or its products or services. 43.3 Neither Party shall disparage the other Party when speaking with a customer or potential customer. 44. LABOR RELATIONS PAGE General Terms and Conditions Page 27 Each Party shall be responsible for labor relations with its own employees. Each Party agrees to notify the other Party as soon as practicable whenever such Party has knowledge that a labor dispute concerning its employees is delaying or threatens to delay such Party's timely performance of its obligations under this Agreement and shall endeavor to minimize impairment of service to the other Party (by using its management personnel to perform work or by other means) in the event of a labor dispute to the extent permitted by Applicable Law. 45. COMPLIANCE WITH THE COMMUNICATIONS LAW ENFORCEMENT ACT OF 1994 (CALEA) Each Party represents and warrants that any equipment, facilities or services provided to the other Party under this Agreement comply with CALEA to the extent applicable. Each Party shall indemnify and hold the other www.ra-academy.org 232 of 364
- 268. Revenue Assurance Foundations RAF104: Partner Foundations Interconnect Contract Example Party harmless from any and all penalties imposed upon the other Party for such other Party's noncompliance, and shall at the non-compliant Party's sole cost and expense, modify or replace any equipment, facilities or services provided to the other Party under this Agreement to ensure that such equipment, facilities and services fully comply with CALEA. IN WITNESS WHEREOF, the Parties have executed this Agreement the day and year written below. TELCOX TELECOMMUNICATIONS, INC. THE OTHER PHONE COMPANY, INC. D/B/A TELCOY COMMUNICATIONS THE OTHER PHONE COMPANY, INC. D/B/A TELCOY INC. (NOT IN STATEY) TELCOY INC. ------------------------- ------------------------- Signature Signature ------------------------- ------------------------- Name Name Managing Director EVP-General Counsel ------------------------- ------------------------- Title Title 5-13-02 5-10-02 ------------------------- ------------------------- Date Date www.ra-academy.org 233 of 364
- 269. CHAPTER 21. INTERCONNECTION AGREEMENTS FOR TELECOMMUNICATIONS SERVICE PROVIDERS Subchapter D. DISPUTE RESOLUTION. §21.95. Compulsory Arbitration. (a) Request for arbitration. (1) Any party to negotiations concerning a request for interconnection, services or network elements pursuant to the Federal Telecommunications Act of 1996 (FTA) §251 may request arbitration by the commission by filing with the commission's filing clerk a petition for arbitration. The petitioner shall send a copy of the petition and any documentation to the negotiating party with whom agreement cannot be reached not later than the day on which the commission receives the petition. (2) The petition must be received by the commission during the period from the 135th to the 160th day (inclusive) after the date the negotiating party received the request for negotiation. The commission shall perform a sufficiency review of the petition. To the extent that a petition is determined to be insufficient, the commission shall file a notice of insufficiency within five working days of receipt of the petition. In the absence of a notice of insufficiency, the petition shall be presumed sufficient. (3) Where a petition for arbitration is found insufficient, the presiding officer may consider dismissal without prejudice pursuant to §21.67 of this title (relating to Dismissal of a Proceeding) and order the petitioner to refile. (4) A petition that is procedurally sufficient must be on file with the commission by the 160th day after the date on which petitioner requested negotiation. (5) In addition to the requirements of form specified in §21.33 of this title (relating to Formal Requisites of Pleadings and Documents to be Filed with the Commission) the petition for arbitration shall include: (A) the name, address, telephone number, facsimile number, and email address of each party to the negotiations and the party's designated representative; (B) a description of the parties' efforts to resolve their differences by negotiation, including but not limited to the dates of the request for negotiation and the projected timeline for compliance under FTA deadlines; (C) a Decision Point List (DPL) that includes a list of any unresolved issues and the position of each of the parties on each of those issues; (D) proposed contract language for each unresolved issue; (E) all agreed contract language; (F) if the request concerns a request for interconnection under §26.272 of this title (relating to Interconnection), the material required by §26.272(g) of this title; (G) the most current version of the interconnection agreement being negotiated by the parties, if any, containing both the agreed language and the disputed language of both parties; and (H) a certificate of service. (b) Response. Any non-petitioning party to the negotiation shall respond to the request for arbitration by filing the response with the commission's filing clerk and serving a copy on each party to the negotiation. Pursuant to FTA §252(b)(3) the response must be filed within 25 days after the commission received the request for arbitration. The response shall indicate any disagreement with the matters contained in the petition for arbitration, including a detailed response to the DPL and alternative proposed contract language, and may provide such additional information as the party wishes to present. §21.95--1 effective date 03/01/04 234 of 364
- 270. CHAPTER 21. INTERCONNECTION AGREEMENTS FOR TELECOMMUNICATIONS SERVICE PROVIDERS Subchapter D. DISPUTE RESOLUTION. §21.95 continued (c) Selection and replacement of presiding officer. (1) Upon receipt of a complete petition for arbitration, a presiding officer shall be selected to act for the commission, unless two or more of the Commissioners choose to hear the arbitration en banc. The parties shall be notified of the commission-designated presiding officer, or of the Commissioners' decision to act as presiding officer themselves. The presiding officer along with designated commission staff will act as an arbitration team. The presiding officer may be advised on legal and technical issues by members of the arbitration team. The commission staff members selected to be part of the team shall be identified to the parties. (2) If at any time a presiding officer is unable to continue presiding over a case, a substitute presiding officer shall be appointed who shall perform any remaining functions without the necessity of repeating any previous proceedings. The substitute presiding officer shall read the record of the proceedings that occurred prior to their appointment before issuing an arbitration award or other decision. (d) Participation. Only parties to the negotiation may participate as parties in the arbitration hearing. The presiding officer may allow interested persons to file a statement of position to be considered in the proceeding. (e) Prehearing conference; challenges. As soon as practical after selection, the presiding officer shall schedule a prehearing conference with the parties to the arbitration. At the prehearing conference, parties should be prepared to raise any challenges to the appointment of the presiding officer or to the inclusion of any issue identified for arbitration in the petition and responses. If such challenges are not raised at the first prehearing conference, they shall be deemed waived by the parties. The presiding officer shall serve parties with the orders ruling on challenges within ten working days of the first prehearing conference. The presiding officer has the authority to schedule additional prehearing conferences to consider discovery, procedural schedules, clarification of issues, amending pleadings, stipulations, evidentiary matters, requests for interim relief, and any other matters as may assist the disposition of the proceedings in a fair and efficient manner. (f) Notice. The presiding officer shall make arrangements for the arbitration hearing, which may not be scheduled earlier than 35 days after the commission receives a complete request for arbitration. The presiding officer shall notify the parties, not less than ten days before the hearing, of the date, time, and location of the hearing. (g) Record of hearing. The arbitration hearing shall be open to the public. If any party requests it, a stenographic record shall be made of the hearing by an official court reporter appointed by the commission. It is the responsibility of the party ordering the stenographic record to request that the commission have an official reporter present. A party may purchase a copy of the transcript from the official reporter at rates set by the commission. The court reporter shall provide the transcript and exhibits in a hearing to the presiding officer at the time the transcript is provided to the requesting party. If no court reporter is requested by a party, the presiding officer shall record the proceedings and maintain the official record and exhibits. Each party to the arbitration hearing shall be responsible for its own costs of participation in the arbitration process. (h) Hearing procedures. (1) The parties to the arbitration are entitled to be heard, to present evidence, and to cross- examine witnesses appearing at the hearing. (2) Redirect may be allowed at the discretion of the presiding officer, provided that parties have reserved time for redirect. §21.95--2 effective date 03/01/04 235 of 364
- 271. CHAPTER 21. INTERCONNECTION AGREEMENTS FOR TELECOMMUNICATIONS SERVICE PROVIDERS Subchapter D. DISPUTE RESOLUTION. §21.95(h) continued (3) The presiding officer may temporarily close the arbitration hearing to the public to hear evidence containing information filed as confidential under §21.77 of this title (relating to Confidential Material). The presiding officer shall close the hearing only if there is no other practical means of protecting the confidentiality of the information. (4) In addition to providing sufficient copies for all parties, the presiding officer, and, if appropriate, the court reporter, parties shall provide three copies of all exhibits for purposes of appeal at the hearing. (i) Applicable rules. The rules of privilege and exemption recognized by Texas law shall apply to arbitration proceedings under this subchapter. The Texas Rules of Civil Procedure, Texas Rules of Civil Evidence, Texas Administrative Procedure Act §2001.081, and Chapter 22 of this title (relating to Practice and Procedure) may be used as guidance in proceedings under this chapter. (j) Authority of presiding officer. (1) Generally. The presiding officer has broad discretion in conducting the arbitration hearing, including the authority given to a presiding officer pursuant to §22.202 of this title (relating to Presiding Officer). In addition, the presiding officer has broad discretion to ask clarifying questions and to direct a party or a witness to provide information, at any time during the proceeding, as set out in subsection (q) of this section. (2) Subpoenas. (A) Issuance of Subpoenas. Pursuant to APA, §2001.089, the presiding officer may issue a subpoena for the attendance of a witness or for the production of books, records, papers, or other objects. Motions for subpoenas to compel the production of books, records, papers, or other objects shall describe with reasonable particularity the objects desired and the material and relevant facts sought to be proved by them. (B) Service and return. A subpoena may be addressed to the sheriff or any constable, who may serve the subpoena in any manner authorized by the Texas Rules of Civil Procedure; and service thereof may be accepted by any witness by a written memorandum, signed by such witness, attached to the subpoena, or by any other method authorized by the Texas Rules of Civil Procedure. (C) Fees. Subpoenas shall be issued by the presiding officer only after sums have been deposited to ensure payment of expense fees incident to the subpoenas. Payment of any such fees or expenses shall be made in the manner prescribed in APA, §2001.089 and §2001.103. (D) Motions to quash. Motions to quash subpoenas shall be filed within five working days after the issuance of the subpoena, unless the party ordered to respond to the subpoena shows that it was justifiably unable to file objections at that time. (k) Discovery. Pursuant to subsection (j) of this section, the presiding officer has broad discretion regarding discovery. Except as modified in paragraphs (1) - (3) of this subsection, Chapter 22, Subchapter H of this title (relating to Discovery Procedures) shall serve as guidance for all discovery conducted under this chapter. (1) Scope. The presiding officer shall permit only such discovery as the presiding officer determines is essential, considering public policy, the needs of the parties and the commission, the commission's deadlines under FTA §252(b)(4)(c), and considering the desirability of making discovery effective, expeditious and cost effective. The presiding officer shall be the judge of the relevance and materiality of the discovery sought. §21.95--3 effective date 03/01/04 236 of 364
- 272. CHAPTER 21. INTERCONNECTION AGREEMENTS FOR TELECOMMUNICATIONS SERVICE PROVIDERS Subchapter D. DISPUTE RESOLUTION. §21.95(k) continued (2) Limits. Parties may obtain discovery relevant to the arbitration by submitting requests for information (RFIs), requests for inspection and production of documents (RFPs), requests for admissions (RFAs), and depositions by oral or written examination. RFIs, RFPs and RFAs shall contain no more than 40 requests (subparts are counted as separate requests). The presiding officer, upon a motion filed by a party, may permit a party to propound more than 40 requests provided that the moving party has made a clear demonstration of the relevance of and the need for the additional requests. Factors to be considered by the presiding officer in determining whether to allow additional requests shall include, but are not limited to: the number of unresolved issues, the complexity of the unresolved issues, and whether the proceeding addresses costs and/or cost studies. (3) Timing. Discovery may commence upon the filing of the petition for arbitration. Parties shall file a proposed discovery schedule that accommodates the commission's deadlines under FTA §252(b)(4)(c), taking into consideration relevant commission regulatory timeframes. The presiding officer may impose a discovery schedule that accommodates the commission's deadlines under FTA §252(b)(4)(c). If any party requests an extension that will affect the ability to complete the proceeding within the commission's deadlines under FTA §252(b)(4)(c), all parties must agree to the extension and file a joint waiver to extend such deadlines. (l) Time for hearing. The arbitration hearing shall be conducted expeditiously and in an informal manner. The presiding officer is empowered to impose reasonable time limits. The presiding officer may continue a hearing from time to time and place to place. Unless additional time is allowed by the commission or additional information is requested by the presiding officer, the hearing may not exceed five working days. (m) Evidence. (1) Relevance. The parties may only offer such evidence as is relevant and material to a proceeding and shall provide such evidence as the presiding officer may deem necessary to determination of the proceeding. The presiding officer shall be the judge of the relevance and materiality of the evidence offered. (2) Conformity to rules. The presiding officer shall have the authority to decide whether or not to apply strict rules of evidence (or any other rules) as to the admissibility, relevance, or weight of any material tendered by a party on any matter of fact or expert opinion. The presiding officer shall provide notice of this decision prior to the deadline for filing direct testimony. (3) Exhibits. The offering of exhibits shall be governed by §22.226 of this title (relating to Exhibits). (4) Offers of proof. Offers of proof shall be governed by §22.227 of this title (relating to Offers of Proof). (5) Stipulation of facts. Stipulation of facts shall be governed by §22.228 of this title (relating to Stipulation of Facts). (6) Prefiled evidence. (A) Parties to the hearing shall provide their direct cases to the presiding officer at least 15 working days prior to the hearing unless the presiding officer establishes a different deadline. Ten copies of the direct case shall be filed with the commission filing clerk and a copy shall be provided to each of the other parties to the hearing at the same time it is provided to the presiding officer. §21.95--4 effective date 03/01/04 237 of 364
- 273. CHAPTER 21. INTERCONNECTION AGREEMENTS FOR TELECOMMUNICATIONS SERVICE PROVIDERS Subchapter D. DISPUTE RESOLUTION. §21.95(m)(6) continued (B) The prepared direct case shall include all of the party's direct evidence on all DPL issues in the proceeding, including written direct testimony of all of its witnesses and all exhibits that the party intends to offer as part of its direct case. The prepared case shall present the entirety of the party's direct evidence on each of the issues in controversy and shall serve as the party's complete direct case. (C) Prefiled evidence shall include, to the extent allowed or requested by the presiding officer, prefiled rebuttal testimony and exhibits and shall be filed not less than eight working days prior to the hearing unless the presiding officer establishes a different deadline. (7) Public Information. Except as provided in §21.77 of this title (relating to Confidential Information), all materials filed with the commission or provided to the presiding officer shall be considered public information under the Texas Public Information Act (TPIA), Texas Government Code, §552.001, et. seq. (n) Sanctions. Whenever a party fails to comply with a presiding officer's order or commission rules in a manner deemed material by the presiding officer, the presiding officer shall fix a reasonable period of time for compliance. If the party does not comply within that time period, then after notice and opportunity for a hearing, the presiding officer may impose a remedy as set forth in §21.71 of this title (relating to Sanctions). (o) Decision Point List (DPL) and witness list. (1) Ten days after the filing of the response to the petition, the parties shall file a revised DPL that is jointly populated to the extent practicable, taking into consideration the status of discovery. (2) Parties shall file a jointly populated DPL in a format approved by the presiding officer, no later than five working days before the commencement of the hearing. An electronic copy of the DPL shall also be provided. The DPL shall identify all issues to be addressed, the witnesses who will address each issue, and a short synopsis of each witness's position on each issue, with specific citation to the parties' testimony relevant to that issue. The DPL shall also provide the parties' competing contract language. Except as provided in §21.77 of this title (relating to Confidential Material), all materials filed with the commission or provided to the presiding officer shall be considered public information under the TPIA, Texas Government Code, §552.001, et. seq. (p) Cross-examination. Each witness presenting written prefiled testimony shall be available for cross- examination by the other parties to the arbitration. The presiding officer shall judge the credibility of each witness and the weight to be given their testimony based upon their response to cross- examination. If the presiding officer determines that the witness's responses are evasive or non- responsive to the questions asked, the presiding officer may disregard the witness's testimony on the basis of a lack of credibility. (q) Clarifying questions. The presiding officer or an arbitration team member, at any point during the proceeding, may ask clarifying questions and may direct a party or a witness to provide additional information as needed to fully develop the record of the proceeding. This has no effect on a party's responsibility to meet its burden of proof. If a party fails to present information requested by the presiding officer, the presiding officer shall render a decision on the basis of the best information available from whatever source derived. Moreover, failure to provide requested information may subject a party to sanctions, as set forth in §21.71 of this title. §21.95--5 effective date 03/01/04 238 of 364
- 274. CHAPTER 21. INTERCONNECTION AGREEMENTS FOR TELECOMMUNICATIONS SERVICE PROVIDERS Subchapter D. DISPUTE RESOLUTION. §21.95 continued (r) Briefs. The presiding officer may require the parties to submit post-hearing briefs or written summaries of their positions. The presiding officer shall determine the filing deadline and any limitations on the length of such submissions. Reply briefs shall not be permitted unless the presiding officer determines that they would aid in the resolution of the proceeding, after consideration of applicable deadlines. (s) Time for decision. The presiding officer shall endeavor to issue a Proposal for Award on the arbitration within 30 days after the filing of any post-hearing briefs. If post-hearing briefs are not filed, the presiding officer shall endeavor to issue the Proposal for Award within 30 days after the conclusion of the hearing. The arbitration team shall issue an arbitration award not later than nine months after the date on which a party receives a request for negotiation under FTA, unless the parties have waived the nine-month deadline in writing or orally on the record. (t) Decision. (1) Proposal for Award. The Proposal for Award shall be based upon the record of the arbitration hearing. The presiding officer may agree with the positions of one or more of the parties on any or all issues or may offer an independent resolution of the issues. The presiding officer is the judge of whether a party has met its burden of proof. The Proposal for Award shall include: (A) a ruling on each of the issues presented for arbitration by the parties, including specific contract language; (B) a statement of any conditions imposed on the parties to the agreement in order to comply with the provisions of FTA §252(c); (C) a statement of how the final decision meets the requirements of FTA §251, including any regulations adopted by the Federal Communications Commission (FCC) pursuant to FTA §251; (D) the rates for interconnection, services, and/or network elements established according to FTA §252(d); (E) a schedule for implementation of the terms and conditions by the parties to the agreement; (F) a narrative report explaining the rulings included in the Proposal for Award, unless the arbitration is conducted by two or more of the commissioners acting as the presiding officers; and (G) to the extent that a ruling establishes a new or different price for an unbundled network element, combination of unbundled network elements, or resold service, a statement requiring that all certificated carriers be notified of such price either through web posting, mass mailing, or electronic mail within ten days of the date the ruling becomes final. (2) Exceptions to the Proposal for Award. Within ten working days of the issuance of the Proposal for Award the parties shall file any Exceptions to the Proposal for Award specifying any alleged ambiguities or errors. To the extent that a party objects to contract language within the Proposal for Award, the party's Exceptions to the Proposal for Award must include alternative contract language along with an explanation of why the alternative language is appropriate, with citation to the record. (3) Arbitration Award. The Arbitration Award shall be based upon the record of the arbitration hearing. The presiding officer shall endeavor to issue the Arbitration Award within ten working days of the receipt of parties' Exceptions to the Proposal for Award. The presiding officer may agree with the positions of one or more of the parties on any or all issues or may offer an independent resolution of the issues. The presiding officer is the judge of whether a party has met its burden of proof. The Arbitration Award shall include: §21.95--6 effective date 03/01/04 239 of 364
- 275. CHAPTER 21. INTERCONNECTION AGREEMENTS FOR TELECOMMUNICATIONS SERVICE PROVIDERS Subchapter D. DISPUTE RESOLUTION. §21.95(t)(3) continued (A) a ruling on each of the issues presented for arbitration by the parties, including specific contract language; (B) a statement of any conditions imposed on the parties to the agreement in order to comply with the provisions of FTA §252(c), if any; (C) a statement of how the final decision meets the requirements of FTA §251, including any regulations adopted by the FCC pursuant to §251; (D) the rates for interconnection, services, and/or network elements established according to FTA §252(d), as appropriate; (E) a schedule for implementation of the terms and conditions by the parties to the agreement; (F) a narrative report explaining the presiding officer's rationale for each of the rulings included in the final decision, unless the arbitration is conducted by two or more of the commissioners acting as the presiding officers; and (G) to the extent that a ruling establishes a new or different price for an unbundled network element, combination of unbundled network elements, or resold service, a statement requiring that all certificated carriers be notified of such price either through web posting, mass mailing, or electronic mail within ten days of the date the ruling becomes final. (u) Distribution. The Proposal for Award and Arbitration Award shall be filed with the commission as a public record and shall be mailed by first class mail, or transmitted via facsimile to all parties of record in the arbitration. On the same day that a decision is issued, the presiding officer shall notify the parties by facsimile or electronic mail that a decision has been issued. If a decision involves 9-1-1 issues, the presiding officer shall also notify the Commission on State Emergency Communications (CSEC) by facsimile or electronic mail on the same day. (v) Implementation. Unless modified, implementation of the terms and conditions of the Arbitration Award shall comply with §21.99 of this title (relating to Approval of Arbitrated Agreements). (w) Motions for reconsideration. No motions for reconsideration of the Proposal for Award are permitted. Motions for reconsideration of the Arbitration Award shall be filed pursuant to §21.75 of this title (relating to Motions for Clarification and Motions for Reconsideration). §21.95--7 effective date 03/01/04 240 of 364
- 276. Revenue Assurance Foundations RAF104: Partner Foundations The Regulators Dilemma What is the Prisoner’s Dilemma? The prisoner's dilemma is a fundamental problem in game theory that demonstrates why two people might not cooperate even if it is in both their best The Regulators Dilemma interests to do so. A Variation on the Prisoner’s Dilemma Two suspects are arrested by If you testify (defects from the other) for the prosecution against the other the police. prisoner and the he remains silent The police have insufficient (cooperates with the other), you go evidence for a conviction free and he goes to jail for 10 years (for bank robbery). They separate both prisoners, If you both remain silent, you both go They visit each of them to offer to jail for 6 months for car theft. the same deal. If you both testify against the other, you each receive a five-year five- sentence. Strategies Each prisoner must choose to betray the other or to remain Prisoner B Stays Silent Prisoner B Betrays silent. Prisoner A Stays Each one is assured that the Silent Prisoner A: 10 Each serves 6 months years other would not know about the betrayal before the end of the Prisoner B: goes free investigation. Prisoner A Betrays Prisoner A: goes free How should the prisoners act ? Each serves 5 Prisoner B: 10 years years © 2011 Rob Mattison www.ra-academy.org 241 of 364
- 277. Revenue Assurance Foundations RAF104: Partner Foundations The Regulators Dilemma Top Strategies Nice The most important condition is that the strategy Forgiving must be nice, that is, it will not defect before its opponent does (this is sometimes referred to as an Successful strategies must also be forgiving. optimistic algorithm). Though players will retaliate, they will once Almost all of the top-scoring strategies were nice; top- again fall back to cooperating if the opponent therefore a purely selfish strategy will not cheat on its opponent, for purely utilitarian reasons first. does not continue to defect. Retaliating This stops long runs of revenge and counter- counter- However, the successful strategy must not be a revenge, maximizing points. blind optimist. Non- Non-envious It must sometimes retaliate. An example of a non-retaliating strategy is Always non- The last quality is being non-envious, that is not non- Cooperate. striving to score more than the opponent This is a very bad choice, as nasty strategies will It is impossible for a ‘nice’ strategy, i.e., a 'nice' ruthlessly exploit such players. strategy can never score more than the opponent Applications to Interconnect Deterministic Factors 1. You cannot always choose Market Share of each your partners Regulatory environment 2. You can always choose to Punitive (aggressive) “cheat” and you might g away y g get y Uninvolved (l i U i l d (laissez-f i ) (laissez-faire) with it Fiddlers (financial 3. Your partner can also cheat incentives/penalties) on you 4. Optimum strategy depends Nature of the market upon Number of participants The Regulator’s Dilemma Mario Sammy 1 Each participant will be give 2 ____ GRAPA – Dollars 3 Several “markets” of 3 carriers 4 each will be created 5 You will be “paired” with 2 other 6 “carriers” in your market 7 You will then be given a 8 “settlement scorecard” 9 10 11 © 2011 Rob Mattison www.ra-academy.org 242 of 364
- 278. Revenue Assurance Foundations RAF104: Partner Foundations The Regulators Dilemma __________ ___________ Round 1,2,3 1 2 Cheat/Cheat – Each pay 1 (-1 (- 3 for both) 4 No Cheat / No Cheat – Each 5 receive 1 (+1 for both) 6 Cheat / No Cheat – No Cheat 7 Pays Cheater +1 (+1 cheater / - 8 1 no cheater) 9 10 11 Round 4,5,6 Round 7,8,9 Scenario : Cheat/Cheat – Aggressive / Punitive/Highly Involved Regulator Cheat -1 No Cheat (NA) --- Cheat/Cheat – Each pay 2 (-2 for (- No Cheat / No Cheat – Cheat (NA) --- both) No Cheat +2 No Cheat / No Cheat – Each receive Cheat / No Cheat – 2 (+2 for both) Cheat +4 Cheat / No Cheat – Cheater Pays No No Cheat -4 Cheater +2 (- 2 cheater / +2 no (- cheater) Scenario : Completely Laissez-Faire Regulator Laissez- Round 10,11,12 Round 13,14,15 Cheat/Cheat – Cheat/Cheat – Cheat (Incumbent -1, Others -3) Cheat (-1 ) No Cheat (NA) -- No Cheat (NA) No Cheat / No Cheat – No Cheat / No Cheat – Cheat (NA) Cheat Ch t (NA) No Cheat (+1) No Cheat (Incumbent +2, Others +1) Cheat / No Cheat – Cheat / No Cheat – Cheat (+1) Cheat (Incumbent 0, Others -3) No Cheat (-1) No Cheat (Incumbent +4, Others +1) Scenario : Carrier-Regulator Nepotism Carrier- Scenario _____________________ © 2011 Rob Mattison www.ra-academy.org 243 of 364
- 279. Revenue Assurance Foundations RAF104: Partner Foundations The Regulators Dilemma Round 16,17,18 Cheat/Cheat – Cheat (-5) No Cheat (NA) No Cheat / No Cheat – Cheat (NA) No Cheat (+10) Cheat / No Cheat – Cheat (+15) No Cheat (-10) Scenario _____________________ © 2011 Rob Mattison www.ra-academy.org 244 of 364
- 280. Revenue Assurance Foundations RAF104: Partner Foundations Denial of Revenue The most pervasive interconnect fraud Denial of Revenue • Can yield millions of dollars in loss • New vulnerability based upon VOIP capabilities • New entrants into the market • VOIP telcos – Consumer / retail Bypass, Partner Scamming and SIMBOX – Wholesale / commercial – Creates vulnerabilities across the entire chain 1/25/2011 1/25/2011 © Copyright 2009 11 – Vulnerability at A = loss at F 1/25/2011© Copyright 2010 ©© Copyright 2009 Copyright 2007 Rob Mattison 2 Thousands of entrants to the market Understanding the Players • No Longer require capital or expertise • Just some contracts and some guts • Easy to make legal money • Easier to make illegal money Brokers, CLECs, Wholesalers 1/25/2011 1/25/2011 © Copyright 2009 33 1/25/2011© Copyright 2010 ©© Copyright 2009 Copyright 2007 Rob Mattison 4 Brokers Cases Carrier 3 Broker1 • Outright Fraudulent Partners – Partners who enter into the agreement with Carrier 4 intention to default / defraud • Partners and Non-partners who deprive you Non partners Broker establishes POI With a number of different carriers of traffic/revenue Carrier 1 Purchases “blocks” of “surplus minutes” In advance for a set price Carrier 2 1/25/2011© Copyright 2010 Rob Mattison 6 © 2011 Rob Mattison www.ra-academy.org 245 of 364
- 281. Revenue Assurance Foundations RAF104: Partner Foundations Denial of Revenue Bank guarantee fraud Credit insurance fraud • Company gives false bank guarantees that seem issue • Insurance company claimed to insure the from 1st rate banks (like Barclays, Fortis...). • Solution: fraudsters business. – only accept standby Letters of Credit issued from 1st rate banks. • Several french carriers accepted insurance – An L/C is transferred from the customer bank to the supplier bank through swift swift. certificates (after checking on the insurance • Not for an undisclosed sum company in in Dun Bradstreet) • Not approved and guaranteed BEFORE closing the deal • Verify with the bank via your own banking channels (no • The entire scenario was a scam. exceptions to the normal chain) • Have your bank execute the transaction 1/25/2011© Copyright 2010 1/25/2011© Copyright 2010 Rob Mattison 7 Rob Mattison 8 The Lightspeed Exploit • A small independent carrier opens a modest / • Then suddenly , there is a HUGE INCREASE IN TRAFFIC legitimate line of business • Credit and collections now becomes a problem, but you • They provide a moderate amount of traffic and pay dare not cut him off because of what he owes, and he still has traffic to route. on time • Then the traffic begins to increase higher than • He does not disappear, but explains that he cannot pay normal but there is not apparent change in the BUT he allows that he will let YOU route traffic for HIM, and allow you to keep the money. (routing without settlement). payment behavior. • So now you start accepting traffic and terminating it on – Even thought this small time carrier is ‘stretching’ OTHER CARRIERS NETWORKS so that you can recoup himself, the payments are good so there is no reason to some of your revenue. change things. • Over time, you relax your vigilance 1/25/2011© Copyright 2010 1/25/2011© Copyright 2010 Rob Mattison 9 Rob Mattison 10 Friday night emergency call • So you sell the routes at the discount price (lower than the purchasing price) to recover at least the part of the debt, thus it occurs that you • Friday night your NOC receives a phone call • send the traffic to another unlucky supplier. That was the way Lightspeed Telecom worked (Lightspeed Networks) from a “well known” partner directed by Steven Friedman. • The caller asks you to quickly add a new IP • During the three years they managed to steal out few millions dollars from the suppliers. termination point as a temporary emergency • The reason for nobody posted them at the forums was that they didn’t vanish, but offered the routes at very high price with the limited measure since they didn’t have time to capacity and the same story lasted for years till they have devastated the market for a million dollars at half of the year. make the mailing and they will be punished • We know more than 40 companies that suffered from their activity. on Monday if your NOC won’t help them. • The most careful and lucky have lost from 5 to 10 thousands dollars. • The most careless have lost ten times more. We consider it to be the • Traffic is the routed over the weekend for most dangerous swindle way because you expect it less. free 1/25/2011© Copyright 2010 1/25/2011© Copyright 2010 Rob Mattison 11 Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 246 of 364
- 282. Revenue Assurance Foundations RAF104: Partner Foundations Denial of Revenue Friday Night Email Giant’s twins • Similar to the Friday night phone call • All the well-known big-scale companies have got “twins”. • You get an email from a partner making the “official” • They change a letter in the name of his original prototype. request for an IP Port. • These “twins” use the same employees’ names, the letter • (there will be a small discrepancy in the letterhead or and style as the original company. company name – one letter missing) • Usually nothing comes after that and no one sends you any • Prevention: relevant mail. – Anyone involved in changes to configuration , rating or routing must be familiar with the contact details of the company from • Sometimes a fake signature and stamp are sent with the independent source. confirmation. • You can check its reliability by giving a call to your client’s • As a rule, one call is enough to understand whether you office and ask him directly about the new IP adding are being cheated or not. intention. • Prepaid is a good solution to “emergency” scenarios • It is important to explain to network operations that it is better to wait 1/25/2011© Copyright 2010 1/25/2011© Copyright 2010 Rob Mattison 13 Rob Mattison 14 Groundless dispute • One of your customers starts to increase • They begin to increase their dispute levels, traffic volume heavily. and then start to demand CDR exchange for • For some time they pay for the routes different periods of time. correctly. • Nothing is ever resolved they are just resolved, stalling more and more. • After several months company begins to • Then, they stop payment dispute a significant portion of the traffic. (they are trying to “lift” their margin through • Soon the supplier receives a letter from his dispute. They may have actually accepted client claiming that 50% of all calls for the the traffic below cost). last three months are unpaid. 1/25/2011© Copyright 2010 1/25/2011© Copyright 2010 Rob Mattison 15 Rob Mattison 16 Intentional bankruptcy On behalf of the giant • You receive an offer letter to go into partnership with a well known • A partner of several years reveals that they carrier like France Telecom. • The documents come with company letterhead, IP addresses and had gone bankrupt several months ago. everything else. • The catch : The only tech guy has got the hotmail address (but he • They keep it a secret on purpose to collect explains it away) what is possible from all of their suppliers as • You handle a huge amount of traffic then y p g wait for the payment. you present y your invoice and they have got nothing to loose. • But no money arrives. • You start pushing your contact person but there is no one there… Your next step is to find the owner of the IPs you have been given. • You find that the IPs belong to France Telecom and they have really sent the traffic there, but the fact is that they have already paid the real supplier for the traffic • At more careful agreement approach it appears that the director’s details are different from the pointed in your agreement and his signature is different as well… consequently you have got no one to 1/25/2011© Copyright 2010 claim to as the contract has got no legal effect. 1/25/2011© Copyright 2010 Rob Mattison 17 Rob Mattison 18 © 2011 Rob Mattison www.ra-academy.org 247 of 364
- 283. Revenue Assurance Foundations RAF104: Partner Foundations Denial of Revenue Thief accountant The really big test • A company sets up an agreement and sends traffic. • The CFO/accountant talks to you personally and sets up a payment plan • You arrange a contract with a contingency (that is fake) • 2-3 months go by, you are not being paid, but there is not enough money to that all testing must be positive. bring the situation to the attention of the CEO. • All of the “internal” controls show no problem. (as all the papers shown to • The tests are arranged for a Weekend. him look good and all the invoices are paid). • The accountant usually quits the job by this and shares the income with the X company. As a rule the cheat sum is huge enough to cover the risk for the • Over the weekend the fraudster routes a accountant. The protection method includes the cash assets accounting automatic system that allows the banking abstract of account be processed huge volume of traffic. WITHOUT a person interfere. The said systems exist and successfully run and as a result, help to prevent the assets of the companies’ owners from the unfair accountants’ activities as show the real figures of the clients’ debts. If • Then he disappears without paying. the mentioned system is absence by any reason you can protect your funds by having a few (for example 3) employees controlling each other’s work as it is much more difficult to come to a swindle agreement with a few different persons than the only one according to the practice. • Learning : Limit test sizes 1/25/2011© Copyright 2010 1/25/2011© Copyright 2010 Rob Mattison 19 Rob Mattison 20 My good friend Well tested route • An interconnect manager you know well • You have been offered to test a good route at a good price. • The test is successful, but prepayment is required. leaves his post with a well known company. • You make your prepayment and nothing happens • He then start his own business • Now you are told that that route is no longer available but a • You open the routes different one is available at a higher price. • Then he defaults. • Now you have to accept it to try to recoup your deposit. • This is the way the providers themselves bring down the market forced by the desire to recover their “discounted” money by selling the routes at unprofitable price. 1/25/2011© Copyright 2010 1/25/2011© Copyright 2010 Rob Mattison 21 Rob Mattison 22 © 2011 Rob Mattison www.ra-academy.org 248 of 364
- 284. Revenue Assurance Foundations RAF104: Partner Foundations SIMBOX An Introduction to The spread of SIM Boxes SIMBOX Fraud and their illegal use has reached epidemic proportions in some markets 2 Cost of SIMBOX FRAUD What is a SIMBOX? ► Costs carriers Millions of USD of revenue ► Network Device loss monthly ► Takes VOIP Traffic and converts it into wireless Traffic ►D Deprives i emerging markets of b dl needed i k t f badly d d ►T k Takes wireless Traffic and converts it i t i l T ffi d t into capital for infrastructure investment VOIP Traffic How is a SIMBOX used fraudulently? How does it work? ► SIMBOXes are used to perpetrate BYPASS ► Fraudster acquires a SIMBOX FRAUD – cheating carriers out of their ► Fruadster hooks up the SIMBOX to an earned revenues internet (IP) connection ►FFraudster accepts VOIP i t d t t international t ffi ti l traffic at his IP address ► VOIP traffic is routed to one of the SIM’s located in the SIMBOX ► The SIM is used to terminate the call 6 ► What is wrong here? © 2011 Rob Mattison www.ra-academy.org 249 of 364
- 285. Revenue Assurance Foundations RAF104: Partner Foundations SIMBOX Sources of traffic? Local SIMs ► Internet (VOIP) originated calls ► Since the traffic terminates on a prepaid, ► Long distance “wholesalers” who route local SIM traffic to the fraudster ► In many countries, there is NO CHARGE for ► SIMBOX that th f th t the fraudster owns at th d t t the termination other end ► In other countries, the charge for local termination is very low ► The problem – all “legal” carriers are bypassed ► Interconnect fees are bypassed 7 ► All treaties and agreements are violated 8 ANY IP input will work Locally ► Biggest source of traffic is unscrupulous ► SIMbox manager simply exchanges SIM wholesalers who divert a portion of their cards and moves his location periodically traffic to this source ► It can even be done with satellite feeds , so ► Their risk is low, their reward is high low the SIM pirate can be mobile 9 10 Termination Fraud Combination Call-Sell/Termination Terminate Terminate Originate Calls SIM Calls Calls Box Internet Internet / DSL / / DSL / Router Cable Cable Router Router SIM SIM Box Box 11 12 © 2011 Rob Mattison www.ra-academy.org 250 of 364
- 286. Revenue Assurance Foundations RAF104: Partner Foundations SIMBOX What is Interconnect? ► The business of cooperation between carriers to have telephone calls span countries New York United States Cape Town South Africa ATT ATT Middleman #1 Middleman #2 Middleman #3 S. Africa S. Africa Telecom Telecom $1 ATT $1 Middleman .90 #1 ATT Middleman Middleman .90 #2 .80 #1 Middleman Middleman .70 #2 .80 #3 S. Africa Telecom .70 Middleman Pirate Income .10 #3 Simbox Income Receive: .90 Receive: .10 Pay: .10 S. Africa ------------------ Pay: .02 Telecom Profit : .80 ------------------ Profit .08 © 2011 Rob Mattison www.ra-academy.org 251 of 364
- 287. Revenue Assurance Foundations RAF104: Partner Foundations SIMBOX Termination Fraud Terminate SIM Calls Box Terminate SIM Calls Internet Box Internet / DSL / Router / DSL / Router Cable Cable Why is SIMBOX Fraud so hard to How Prevalent is SIMBOX Fraud? fight? ► Global in nature ► It is hard to detect ► Amount to millions of dollars per month ► It is hard to catch the perpetrator ► There is a lack of cooperation with some regulators l t ► There is a lack of cooperation with some partners What can be done about SIMBOX Fraud? SimBOX Fraud ► Utilization Fraud Management Systems ► Cooperation between carriers Deterrence and ► Utilization of specialized SIMBOX detection Detection firms fi © 2011 Rob Mattison www.ra-academy.org 252 of 364
- 288. Revenue Assurance Foundations RAF104: Partner Foundations SIMBOX Problem #1 Problem #2 - Detection? ► Who is doing it ► Bypass traffic analysis ► How and why ► Fraud management System Domestic “Partners” ► Test calls / CDR Audits ►Routing Domestic ►Routing International ► 3rd Party Specialists International “partners” ► Interconnect Partners ►Routing domestics ►Routing International In Stream “brokers” ►Bypassing all in –market Problem #3 - Deterrence SIM CUTOFF / Monitoring ► SIM Monitoring and Cutoff ► Simbox Perpetrator Prosecution ► Attacking the Source of the Bypass ► Market Cooperation ► Complex Exploits Prosecution of SIMBOX Owners Bypass Traffic Source Attack © 2011 Rob Mattison www.ra-academy.org 253 of 364
- 289. Revenue Assurance Foundations RAF104: Partner Foundations SIMBOX Market Cooperation © 2011 Rob Mattison www.ra-academy.org 254 of 364
- 290. Revenue Assurance Foundations RAF104: Partner Foundations Internet Peering Settlement agreements A settlement agreement is an agreement drawn up between two or more service providers that specifies an agreed set of metrics Internet interconnect The agreement should be a contract in law, respecting all applicable civil, criminal and international laws. Whether it is bilateral or multi-lateral will depend on the anti- trust provsions of the jurisdiction concerned. For each metric in the set, the agreement should – define or refer to a measurement method – specify a settlement rate and currency In general, the agreement should – specify settlement dates and financial procedures – specify independent auditing procedures – specify binding arbitration mechanisms (to avoid recourse to the courts) Internet transit is the service of allowing network traffic to cross or transit In the 1970s and early 1980s-era Internet, the assumption a computer network, usually used to connect a smaller was made that all networks would provide full transit for one Internet Service Provider to the larger Internet. another, since all were ultimately publicly funded by the Technically, it consists of two bundled servies: United States government's National Science Foundation. The advertisement of customer routes to other ISPs thereby ISPs, In the modern private-sector Internet, two forms of private sector soliciting inbound traffic toward the customer from them interconnect agreements exist between Internet networks: The advertisement of others ISPs routes (usually but not transit, and peering. necessarily in the form of a default route or a full set of routes to all of the destinations on the Internet) to the ISP's customer, thereby soliciting outbound traffic from the customer towards these networks. Peering Traffic between the two ISPs and their downstream customers is Peering is a voluntary interconnection of administratively separate Internet networks for the purpose of exchanging traffic between the exchanged and neither ISP can see upstream routes over the customers of each network. peering connection. The pure definition of peering is settlement-free or sender keeps all, A transit free network uses only peering; meaning that neither party pays the other for the exchanged traffic; instead, each derives revenue from its own customers. a network that uses only unpaid peering and connects to the Marketing and commercial pressures have led to the word peering whole Internet is considered a Tier 1 network routinely being used when there is some settlement involved, even though that is not the accurate technical use of the word. The phrase settlement-free peering is sometimes used to reflect this reality and unambiguously describe the pure cost-free peering situation. Peering requires physical interconnection of the networks, an exchange of routing information through the Border Gateway Protocol (BGP) routing protocol and is often accompanied by peering agreements of varying formality, from handshake to thick contracts. © 2011 Rob Mattison www.ra-academy.org 255 of 364
- 291. Revenue Assurance Foundations RAF104: Partner Foundations Internet Peering How peering works Transit service The Internet is a collection of separate and distinct networks, Typically priced per megabit per second per month, each one operating under a common framework of globally Customers are often required to commit to a minimum volume of bandwidth, unique IP addressing and global BGP routing. Usually commit to a minimum term of service The relationships between these networks are generally Some transit agreements provide service level agreements described by one of the following three categories: which purport to offer money-back guarantees of performance money back Transit (or pay) –You pay money (or settlement) to another between the customer's Internet connection and specific points on network for Internet access (or transit). the Internet, and major Internet exchange points within a continental geography such as North America. Peer (or swap) – Two networks exchange traffic between each These service level agreements still provide only best-effort other's customers freely, and for mutual benefit. delivery since they do not guarantee service the other half of the Customer (or sell) – Another network pays you money to way, from the Internet Exchange Point to the final destination. provide them with Internet access. In order for a network to reach any specific other network on The Internet is based on the principle of global reachability the Internet, it must either: (sometimes called end-to-end reachability), which means that Sell transit (or Internet access) service to that network (making any Internet user can reach any other Internet user as though them a 'customer'), they were on the same network. Peer directly with that network, or with a network who sells y , Therefore, any Internet connected network must by transit service to that network, or definition either pay another network for transit, or peer Pay another network for transit service, where that other with every other network who also does not purchase transit. network must in turn also sell, peer, or pay for access. Peering categories The physical interconnections used for peering are categorized into two types: Public peering – Interconnection utilizing a multi-party shared switch fabric such as an Ethernet switch. Private peering – Interconnection utilizing a p p g g point-to-point link p between two parties. © 2011 Rob Mattison www.ra-academy.org 256 of 364
- 292. Revenue Assurance Foundations RAF104: Partner Foundations Internet Peering Exchange points Depeering By definition, peering is the voluntary and free exchange of traffic between two The largest individual exchange points in the world are AMS-IX in networks, for mutual benefit. If one or both networks believes that there is no longer a Amsterdam, followed by DE-CIX in Frankfurt Germany and LINX in mutual benefit, they may decide to cease peering: this is known as depeering. Some of the reasons why one network may wish to depeer another include: London. A desire that the other network pay settlement, either in exchange for continued peering The next largest exchange point is generally considered to be JPNAP in or for transit services. Tokyo, Japan. A belief that the other network is profiting unduly from the settlement free interconnection. The United States, with a historically larger focus on private peering Concern over t ffi ratios, which related to the fair sharing of cost for the interconnection traffic ti interconnection. and commercial public peering has a much smaller amount of traffic on peering, A desire to peer with the upstream transit provider of the peered network. public peers compared to other regions which operate non-profit Abuse of the interconnection by the other party, such as pointing default or utilizing the exchange points. peer for transit. The combined exchange points in multiple cities operated by Equinix Instability of the peered network, repeated routing leaks, lack of response to network abuse issues, etc. are generally considered to be the largest and most important, followed The inability or unwillingness of the peered network to provision additional capacity for by the PAIX facilities which are operated by Switch and Data. peering. Other important but smaller exchange points include LIPEX and The belief that the peered network is unduly peering with your customers. LONAP in London UK, NYIIX in New York, and NAP of the Americas Various external political factors (including personal conflicts between individuals at each in Miami, Florida. network). URLs to some public traffic statistics of exchange points include: Peering and BGP AMS-IX A great deal of the complexity in the BGP routing protocol exists to aid the enforcement and fine-tuning of peering and transit agreements. DE-CIX BGP allows operators to define a policy that determines where traffic is routed. LINX Three things commonly used to determine routing are MSK-IX local-preference, multi exit discriminators (MEDs) and TORIX AS-Path. NYIIX Local-preference is used internally within a network to differentiate classes of networks. LAIIX For example, a particular network will have a higher preference set on internal and customer advertisements. TOP-IX Settlement free peering is then configured to be preferred over paid IP Netnod transit. Networks that speak BGP to each other can engage in multi exit discriminator exchange with each other, although most do not. When networks interconnect in several locations, MEDs can be used to reference that network's interior gateway protocol cost. This results in both networks sharing the burden of transporting g p g each others traffic on their own network (or cold potato). Hot-potato or nearest-exit routing, which is typically the normal behavior on the Internet, is where traffic destined to another network is delivered to the closest interconnection point. 18 © 2011 Rob Mattison www.ra-academy.org 257 of 364
- 293. Revenue Assurance Foundations RAF104: Partner Foundations Internet Peering Peering Multiple ISPs interconnect at peering points or Internet exchange points (IXs), allowing routing of data between each network, without charging one another for the data transmitted—data that would otherwise have passed through a third upstream ISP, incurring charges from the upstream ISP. ISPs requiring no upstream and having only customers (end customers and/or peer ISPs) are called Tier 1 ISPs. Network hardware, software and specifications, as well as the expertise of network management personnel are important in ensuring that data follows the most efficient route, and upstream connections work reliably. A tradeoff between cost and efficiency is possible. 19 20 Tier 1 Carriers IXP Qwest An Internet exchange point (IX or IXP) is a physical Verizon Business infrastructure through which Internet service providers Sprint (ISPs) exchange Internet traffic between their networks TeliaSonera International Carrier (autonomous systems). NTT Communications IXPs reduce the portion of an ISP's traffic which must be ISP s Tinet delivered via their upstream transit providers, thereby Level 3 Communications (L3) reducing the average per-bit delivery cost of their service. Furthermore, the increased number of paths learned through Global Crossing (GBLX) the IXP improves routing efficiency and fault-tolerance. Savvis ATT Tata Communications 21 22 Short name Name City Country DE-CIX Deutscher Commercial Internet Exchange [ Frankfurt am Main Germany AMS-IX Amsterdam Internet Exchange Amsterdam Netherlands LINX London Internet Exchange London United Kingdom London, Paris, Amsterdam, Frankfurt am Main, Munich, Zürich, Geneva, New York, Washington Equinix Equinix Exchange United States, Europe, Asia - Pacific D.C., Chicago, Dallas, Los Angeles, San Jose, Tokyo, Hong Kong, Singapore, Sydney J JPNAP Jp Japan Network Access Point Tokyo and Osaka y Jp Japan MSK-IX Moscow Internet Exchange Moscow Russia Netnod Netnod Internet Exchange in Sweden Stockholm, Malmö, Sundsvall, Gothenburg, Luleå Sweden UA-IX Ukrainian Internet Exchange Network Kiev Ukraine JPIX Japan Internet Exchange Tokyo Japan Neutral Internet eXchange of the Czech NIX.CZ Prague Czech Republic Republic Los Angeles, San Jose, Miami, Washington DC, Any2 Any2 Exchange USA Boston, Chicago, Reston, New York 23 © 2011 Rob Mattison www.ra-academy.org 258 of 364
- 294. Revenue Assurance Foundations RAF104: Partner Foundations Roaming Business Models What is Roaming? Roaming A credit agreement between two carriers Where one carrier agrees to pay the usage charges generated by one of their ow custo e s own customers Rob Mattison The Revenue Assurance Academy Rob Mattison 2 Architectures Two Ways to Roam SIM-based roaming and SIM-based roaming: Username/password-based roaming ◦ GSM subscriber roams onto a network operated by another who has a roaming agreement with their Home GSM Operator. Username/password based roaming: ◦ Subscriber roams onto a Public WLAN operated by their GSM Operator, or another Operator who has a roaming agreement with their GSM Operator. Rob Mattison Rob Mattison Roaming Domains Definition Business Model Roaming is the process of managing telephone calls (or Topology and AA(A) wireless data traffic) that are managed by one carrier, ◦ IREG when the customer belongs to a different carrier. Accounting By far the most common case of roaming is for wireless, ◦ TADIG where a subscriber to service on one network, in one geography, travels to a different geography, and is able to DCH – Roles and Responsibilities use their phone on another carriers network Settlement As you can well imagine, the sophistication Margin (technological and operational) required to successfully Credit Management manage roaming is incredible ◦ HUR - Credit Management ◦ NRTDE – Credit Management Rob Mattison •© Rob Mattison •6 C i ht © 2011 Rob Mattison www.ra-academy.org 259 of 364
- 295. Revenue Assurance Foundations RAF104: Partner Foundations Roaming Business Models Two Models (plus hybrid) Participants GSM Centric Customer ◦ Voice or GPRS driven Home Carrier ◦ AA via SIM Visited Carrier - Network WiFi Centric Digital Clearing House (DCH) ◦ UMA Driven ◦ AA via Login/Password Hybrid ◦ Cross Domain (CDMA/GSM/Wimax/Wifi/Wireline) Rob Mattison Rob Mattison Home Carrier Digital Clearing House (DCH) GSM NATIVE Customer has account With home carrier PERSPECTIVE Visited Carrier Home Home 5. $ Carrier Carrier Digital 6. Invoice For 4. Invoice For Digital Service Service Clearing Clearing House (DCH) House (DCH) 2. Invoice For Service 3. $ Visited 7. $ Carrier Customer visits on 1. Service Delivered Other network Visited Carrier © 2011 Rob Mattison www.ra-academy.org 260 of 364
- 296. Revenue Assurance Foundations RAF104: Partner Foundations Roaming Business Models Participants, Roles,Value Propositions Home and visited networks Customer Subscriber has no entry in the home subscriber register of the network (e.g. Home Location Register (HLR) in GSM networks or local customer ◦ Allowed to use other carrier networks without having to database in WLANs), the required subscriber data must first be requested provide credit, identity checks. Value: convenience by the visited network e.g. from the subscriber's home network in order that the subscriber can be authenticated and any authorization for using ◦ Exchange: Pay extra for service (pay more than a local) the network services can be checked. Home Carrier / Visited Carrier The visiting subscriber acquires an entry in a user database of the visited network (e.g. Visited Location Register (VLR)) and the authorized network ◦ Get income for situations when your customer is not on y services are enabled. For the roaming procedure in practice the possibility enabled practice, your network (margin) of assigning the subscriber data is always indispensable in order that ◦ Get additional traffic/revenue when partners customer is authentication, authorization and billing of the subscriber can be performed in the corresponding network. on your network Thus, the term roaming is not linked to a specific network standard, but DCH (Middleman) rather to the type of subscriber entry in the home subscriber register of the mobile radio network. ◦ Charge a percentage (handling fee) for each call brokered If a subscriber can use his personal service profile, which he uses in the ◦ Sell additional “upstream” services home network, in the visited network as well, this is also referred to as Global Service Roaming Capability. Rob Mattison Rob Mattison The roaming process Roaming agreements The legal roaming business aspects negotiated The details of the roaming process differ among types of cellular networks, but in general, the process resembles the following: between the roaming partners for billing of the ◦ When the mobile device is turned on or is transferred via a handover services obtained are usually stipulated in so to the network, this new visited network sees the device, notices that called roaming agreements. it is not registered with its own system, and attempts to identify its home network. The GSM Association broadly outlines the ◦ If there is no roaming agreement between the two networks, content of such roaming agreements in maintenance of service is impossible, and service is denied by the visited network. p y standardized form for its members. ◦ The visited network contacts the home network and requests service For the legal aspects of authentication, information (including whether or not the mobile should be allowed to roam) about the roaming device using the IMSI number. authorization and billing of the visiting subscriber, ◦ If successful, the visited network begins to maintain a temporary the roaming agreements typically can comprise subscriber record for the device. minimal safety standards, as e.g. location update ◦ Home network updates its information to indicate that the mobile is on the host network so that any information sent to that device can be procedures or financial security or warranty correctly routed. procedures. Rob Mattison Rob Mattison Types of roaming National roaming: Regional roaming: ◦ Ability to move from one mobile operator to another in the same country. ◦ Ability of moving from one region to another For example, a subscriber of T-Mobile USA who is allowed to roam on ATT Mobility's service would have national roaming region inside national coverage of the mobile rights. operator. ◦ Not allowed unless under very specific circumstances and ◦ Initially, operators may have p y, p y provide commercial under regulatory scrutiny. offers restricted to a region (sometimes to a ◦ Often a new company is assigned a mobile telephony license, to create a more competitive market by allowing town). the new entrant to offer coverage comparable to that of ◦ Due to the success of GSM and the decrease in established operators (by requiring the existing operators to allow roaming while the new entrant has time to build cost, regional roaming is rarely offered to clients up its own network). except in nations with wide geographic areas like ◦ India, where the number of regional operators is high and the USA, Russia, India, etc., in which there are a the country is divided into circles, this type of roaming is number of regional operators. common. Rob Mattison •© Rob Mattison •1 C i ht 8 © 2011 Rob Mattison www.ra-academy.org 261 of 364
- 297. Revenue Assurance Foundations RAF104: Partner Foundations Roaming Business Models International roaming: International roaming Ability to move to a foreign service provider's International roaming is the ability to use your network. mobile phone when abroad on holiday or on ◦ International tourists and business travellers. business. Used by over 80% of the world's mobile Because your mobile phone company does not operators. necessarily have a network in the country in Countries have allocated different frequency which you are traveling, whenever you make or bands for GSM communications receive a call there you use – or are ‘roaming’ on ◦ 900/1800 MHz - the network of an operator in that country. ◦ 850/1900 MHz ◦ For a phone to work in a country with a different For providing this service, this Host Operator will frequency allocation, it must support one or both of charge a wholesale rate to your Home Operator that country's frequencies, and thus be tri or quad who will, in turn, charge you a retail rate. band. Rob Mattison Rob Mattison EU Regulation on international Inter-standards roaming: Inter- roaming On 7 June 2007, the EU ministers for IT and telecommunications agreed politically to issue Regulation of the European Parliament and of the Council on roaming on public Ability to move seamlessly between mobile mobile telephone networks within the Community. Subsequently the Regulation has been translated into all 23 languages of the Community, and it was formally adopted by the networks of different technologies. Council on 25 June 2007.The next step is that the text of the Regulation will be published in the Official Journal on 29 June 2007, entering into force the next day (30 June 2007). ◦ Technologies have evolved independently across The Regulation will impose a number of obligations on Danish mobile providers and other continents, there is significant challenge in achieving mobile providers within EU regarding international roaming in the EU's internal market. Such obligations can be divided into four subelements: seamless roaming across these technologies. Wholesale price regulation - the prices that Danish mobile network providers are allowed ◦ Implemented in accordance with technological p g to charge from foreign mobile network providers when consumers who have a mobile subscription in other parts of the EU's internal market use their mobile telephones in standards laid down by different industry bodies and Denmark. hence the name. Retail price regulation - the prices that Danish mobile providers are allowed to charge from their customers when the customers use their mobile telephone outside Denmark A number of the standards making industry for calls within the EU's internal market. Consumer information - the information that Danish mobile providers must give their bodies have come together to define and achieve customers, both when the Regulation enters into force and on a regular basis later on. interoperability between the technologies as a Reporting duty - the information that mobile providers must give the National IT and Telecom Agency to allow the Agency to supervise compliance with the Regulation and to means to achieve inter-standards roaming. allow the Agency to meet its reporting obligations in relation to the European Commission. Currently an ongoing effort. Rob Mattison Rob Mattison Inter MSC Roaming Mobile Signature Roaming: (on Net or internal roaming) Access point gets a Mobile Signature from Network elements belonging to the same any end-user device Operator but located in different areas (a ◦ Even if the AP and the end-user have not typical situation where assignment of local contracted a commercial relationship with the licenses is a common practice)pair same MSSP. depends on the switch and its location location. ◦ AP has to build commercial terms with as many MSSPs as possible, and this might be a cost Software changes and a greater burden. processing capability are required, ◦ This means that a Mobile Signature transaction Concept of roaming on a per MSC basis issued by an Application Provider should be able to reach the appropriate MSSP, and this should be instead of per Operator basis. transparent for the AP. It is avoided. Rob Mattison Rob Mattison © 2011 Rob Mattison www.ra-academy.org 262 of 364
- 298. Revenue Assurance Foundations RAF104: Partner Foundations Roaming Business Models Permanent Roaming: Trombone roaming: Customers purchase service with a mobile phone operator intending to permanently roaming, or be off-network. ◦ Possible because of the increasing popularity and availability of free roaming service plan, where Roaming calls within a local tariff area, ◦ there is no cost difference between on and off network usage. The benefits of getting service from a mobile phone operator that isn't local to you can include when at least one of the phones belong cheaper rates, or features and phones that aren't available on your local mobile phone operator, or to get to a particular mobile phone operator's network to get free calls to other customers of that mobile phone operator through a free unlimited mobile to mobile feature. outside that area. Usually implemented ◦ Accidentally become a permanent roaming customer does not usually happen. Most mobile phone operators will require the customer's living or billing address be inside their coverage area or less often inside the government issued radio frequency license of the mobile phone operator this is operator, with trombone routing also known as g ◦ usually determined by a computer estimate because it its impossible to guarantee coverage (see Dead zone (cell phone)). If a potential customer's address is not within the requirements of that mobile phone operator, they tromboning The routing of trombone roaming. will be denied service. ◦ In order to permanently roam customers may use a false address and online billing, or a relative or friends address which is in the required area, and a 3rd party billing option. Most mobile phone operator discourage or prohibit permanent roaming since they must pay per minute rates to the network operator their customer is roaming onto to[, while they can not pass that extra cost onto customers (free roaming). Rob Mattison Rob Mattison In Flight Roaming Roaming Agreements Emirates Airline allows in-flight voice calls on Between carriers specify some commercial airline flights. ◦ GSM phones on certified aircraft types are ◦ Rates (In/out roaming) considered safe to use when installed with an on- All destinations board cellular picocell. AeroMobile and OnAir ◦ Credit notification terms and responsibilities ◦ Personal electronics devices aboard flights. ◦ Billing/Payment methods ◦ Licensed to specific airlines for use. ◦ Use of DCH? Malaysia Airlines ◦ AeroMobile systems to enable in flight voice calls and Between carrier and DCH text messages. ◦ How, when and margins for transaction Falcon 2000 ◦ SafeCell for inflight private jets . handling services Rob Mattison Rob Mattison Roaming Agreements Tariffs Roaming fees are traditionally charged on a per-minute basis and This agreement is established after a they are typically determined by the service provider's pricing plan. series of testing processes called IREG Several carriers in the United States have eliminated these fees in their nationwide pricing plans. (International Roaming Expert Group) ◦ allow consumers to purchase nationwide roaming-free minutes. and TADIG (Transferred Account Data ( Carrier publishes the tariffs that would be charged in his network at l least sixty d prior to i implementation under normal i days i its i l i d l Interchange Group). While the IREG situations. The visited operator tariffs may include tax,discounts etc and testing is to test the proper functioning of would be based on duration in case of voice calls. the established communication links, the For data calls, the charging may be based on the data volume sent and received. TADIG testing is to check the billability of Some operators also charge a separate fee for call setup i.e. for the establishment of a call. This charge is called a Flagfall charge. the calls Rob Mattison Rob Mattison © 2011 Rob Mattison www.ra-academy.org 263 of 364
- 299. Revenue Assurance Foundations RAF104: Partner Foundations Roaming Business Models My Network (MN) IN - ROAMER Terminology Home Carrier (HOME) X Visiting Carrier (HOST) IN Roamer My Partner Customer Customer OUT Roamer (MC) (PC) X OUT - ROAMER Partner Network (PN) Rob Mattison © 2011 Rob Mattison www.ra-academy.org 264 of 364
- 300. Revenue Assurance Foundations RAF104: Partner Foundations Roaming, Signalling and MM Major Types of Roaming Signaling and AA(A) for •2 Roaming OnNet Postpaid USSD Prepaid p Rob Mattison The Revenue Assurance Academy Rob Mattison •Black List of Stolen Phone Serial Numbers How is AA(A) Accomplished EIR •Encryption codes for SIMS AUC •3 HLR •Account Information (services authorized) Review of GSM Architecture •Prepaid? Postpaid? Roaming? CAMEL? GPRS? EIR, AUC, HLR, VLR VLR •Realtime Register of all PHONES ACTIVE on the switch NOW Switch •Pointcodes for all Switches that Pointcodes this switch can communicate with •B.Num Routing Table Parse Point- Billing Code •Rules for Billing when this code Number is Called •-------------------------------------- •When to create a CDR •What to place on the CDR •How to handle Prepaid/Postpaid Rob Mattison Key Functions VLR •Realtime Register of all PHONES ACTIVE on the switch NOW •6 BTS Switch Mobility Management •Pointcodes for the Home MSC for all Carriers we have a Roaming Keeping track of where you are BSC Partnership with Keeping your call going •Handset Allowing you to quickly get access when you move •---------- •Unique code for each country •SIM (From IMSI) ( ) •IMSI •Roaming Routing Table Country Carrier Point Code Code Code •Unique code for carrier we have a roaming relationship with •Point Code for the Master MSC for this roaming partner Rob Mattison © 2011 Rob Mattison www.ra-academy.org 265 of 364
- 301. Revenue Assurance Foundations RAF104: Partner Foundations Roaming, Signalling and MM Scenarios Mobility Management States •7 •8 MS Off (Detached) MS is turned off MS is considered to be in the turned-off state MS is turned on but is idle MS obviously fails to provide any updates in relation to changes in Location Area (LA), if any exist considered detached from the system (IMSI detached). MS has an active call MS Idle (Location Update) Ready state to make or receive calls. Considers it attached (IMSI attached), and can be paged. While on the move, the MS must inform the system about any changes in LA; This is known as location updating. MS In Use (Handover) Active radio channels that are allowed to the MS for conversation/data flow. MS is required to change to new radio channels if the quality of current channels drops below a certain level; this is known as handover. The MSC (sometimes BSC) makes the decision to handover an analysis of information that is obtained real-time from the MS and BTS. Rob Mattison Rob Mattison Location update occurs when •9 VLR BTS Switch VLR The MS is first switched on Switch BTS The MS moves within the same VLR area, but to a BSC BSC new LA The MS moves to a new VLR area A location update timer expires Home Visited Switch Switch •Handset •---------- •SIM •IMSI Rob Mattison When you go to a different location •11 VLR BTS Switch VLR 1. EIR Check Switch BTS 2. AUC Check (On Net) – Okay BSC BSC 3. Update Home HLR with Location (VLR) 4. Update Local VLR with Account Information 4 p (AAA) Home Visited Switch Switch •Handset •---------- •SIM •IMSI Rob Mattison © 2011 Rob Mattison www.ra-academy.org 266 of 364
- 302. Revenue Assurance Foundations RAF104: Partner Foundations Roaming, Signalling and MM When you call the person •13 Logging into a Different MSISDN Lookup in B.Num Routing Table Network Check HLR •14 References other switch Call Handled on the other switch directly y Rob Mattison Part 1 – Identify Home GMSC •15 VLR BTS Switch VLR Customer logs onto foreign MSC Switch BTS EIR check BSC BSC AUC Fail IMSI Check Roaming Routing Table Reference Home Number Range Verification Visited Network SS7 to Home GMSC for AA(A) Network (Country A) •Handset •---------- (Country B) •SIM •IMSI Rob Mattison Part 2 – Authenticate and Prime Reference •Realtime Register of all PHONES ACTIVE Sources (HLR/VLR) VLR •18 on the switch NOW Switch Send Message to Home Network and verify BTS •Pointcodes for the Home MSC for all Carriers we have a Roaming EIR (home) Partnership with AUC (home) BSC •Handset HLR (home) •---------- •SIM •Unique code for each country (From IMSI) ( ) Home Network Returns Information to Foreign MSC o e et o etu s o at o o eg SC •Roaming Routing Table •IMSI Roaming Status Country Code Carrier Code Point Code IMSI Range (MSISDN Range) Postpaid/Prepaid Status CAMEL Status Place relevant Home HLR information into Foreign VLR Place Foreign VLR information into Home HLR Rob Mattison © 2011 Rob Mattison www.ra-academy.org 267 of 364
- 303. Revenue Assurance Foundations RAF104: Partner Foundations Roaming, Signalling and MM a. Makes a call VLR d. Home MSC Other Switch Validates Switch BTS Account to foreign c. Foreign MSC MSC Checks with home BSC Network for validity Home H Home Location Home MSC Register MSC (HLR) Foreign MSC Home Visited b. Foreign MSC notes that this is Network Network •Handset not a native user. •---------- SS7 Connection Visitor (Country A) (Country B) •SIM •IMSI Location e. Foreign MSC Register (VLR) logs user within VLR Roaming Foreign Registration Call Scenarios Steps in the process – RCF •21 •22 Roaming call forwarding (someone calls the roamer) Number is dialed Call the person from their home network ISUP command is routed to roaming customers HOME InRoaming Call (the roamer makes a call) MSC Person who is roaming calls someone Home MSC Notes that the customer is at a different location VLR information is access Request is sent to the VLR for a temporary phone number (called MSRN) Foreign VLR sends MSRN (local number) Home MSC dials the MSRN and connect the customer Rob Mattison Rob Mattison IAM Home Switch Performs Location Update Request •24 VLR Switch BTS Query Foreign VLR for MSRN BSC Use provided MSRN to complete call Home Visited Network Network (Country A) •Handset •---------- (Country B) •SIM •IMSI Rob Mattison © 2011 Rob Mattison www.ra-academy.org 268 of 364
- 304. Revenue Assurance Foundations RAF104: Partner Foundations Roaming, Signalling and MM IAM Mobile Terminate - Call Termination •26 VLR MSRN Switch BTS ISUP – IAM command is sent through normal interconnect channels as any other interconnect call BSC Destination is the temporary MSRN All normal SS7 protocols and billing apply Home Visited Network Network (Country A) •Handset •---------- (Country B) •SIM •IMSI Rob Mattison IAM VLR Switch BTS BSC Switch Switch GMSC GMSC Home Visited Network Network (Country A) •Handset •---------- (Country B) •SIM •IMSI © 2011 Rob Mattison www.ra-academy.org 269 of 364
- 305. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Postpaid Billing Postpaid Roaming Agreements Customer ◦ Agrees to pay on monthly bill for roaming Accounting rules for ◦ Agrees to pay for roaming call forward Home Carrier ◦ Agrees to “sponsor” and manage AA(a) for customer / foreign carrier ◦ Manages Credit Risk (per agreement) Foreign Carrier • Prerequisite ◦ Provide Service •Roaming Business Models ◦ Generates CDRs •Roaming Signaling DCH ◦ Middleman – CDRs ◦ Middleman – Financials (possible) Rob Mattison Under a roaming agreement Prerequisites The home carrier must provide accurate information Preconditions to the roaming partners re: account balance etc. ◦ Customer authorized for Roaming on Home Postpaid : the home carrier must collect call Network (entry in HLR) information from the roaming carrier and bill the customer for the services ◦ Home Network establishes Roaming Contract Postpaid: the home carrier must pay the roaming with Foreign network (define credit method/limit carrier for the services delivered etc. ) Prepaid: the home carrier must keep track of the ◦ DCH contract enabled customer balance and decrement it appropriately Testing complete DCH contract finalized IREG/TADIG Filed Rob Mattison Rob Mattison Call Scenarios Customer appears on Foreign Network AA(a) and MM are executed Rules for Call Scenarios – Customer Receives Call ◦ MT - Roaming Call Forward Call Scenarios – Customer Makes Call ◦ MO - Local call by roamer on foreign Network Rob Mattison © 2011 Rob Mattison www.ra-academy.org 270 of 364
- 306. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Postpaid Billing Mobile Terminate IAM VLR Someone calls the customer MSRN Switch BTS ◦ They call the customers Home Number (that BSC is the only number they know) Home MSC gets the phone number for g p the customers on the roaming network Home (MSRN) Visited Network Network Home MSC place interconnect call to (Country A) •Handset •---------- (Country B) customer at their new temporary MSRN •SIM •IMSI Rob Mattison IAM Standard Arrangement VLR Switch BTS Caller pays for the call from where they BSC are to the MSC Switch Switch ◦ If caller is OnNet it will be a local caller GMSC GMSC ◦ If caller is calling from another country or g y Home carrier, they will pay the long distance charges Visited to customers Home MSC Network (Country A) Network •Handset Roaming Customer (Receiver) will pay for •---------- (Country B) •SIM the long distance call from the Home •IMSI MSC to the Roaming Location Rob Mattison IAM CDR Processing Switch CDR generated at the Home MSC (or GMSC Home GMSC depending upon interconnect Paid by architecture) caller Processed through Paid by ◦ Switch ◦ Mediation Roaming ◦ Postpaid Billing Customer ◦ Bill Sent to Customer ◦ Customer Pays All normal Interconnect routing, rating and billing rules will apply Rob Mattison © 2011 Rob Mattison www.ra-academy.org 271 of 364
- 307. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Postpaid Billing IAM Switch GMSC Paid by Rules for caller International Long Distance CDR Mediation Bill to System Paid by Customer Roaming Postpaid Customer Billing System Home Mobile Originate Network (Country A) Prerequisite ◦ Customer pays AAA on Roaming Network ◦ Visited MSC/VLR is loaded with customer Normal account information and permission (postpaid) CDR for Call Call Sequence ◦ The customer calls Someone ◦ Visited MSC Checks VLR ◦ Sees that the customer has postpaid permission ◦ Call is Placed Visited ◦ CDR is generated Network Rob Mattison (Country B) a. Makes a call Postpaid Mobile Origionate Customer logs into Visited Network d. Home MSC Validates Visited MSC checks with home MSC for Account to foreign c. Foreign MSC MSC Checks with home authorization (Credit limit?) Network for validity Calls are handled as “native” postpaid Home H CDR’s are forwarded to DCH Home MSC Location Register (HLR) DCH consolidates and forwards CDRs to MN Foreign MSC b. Foreign MSC I bill the customer notes that this is SS7 Connection not a native user. I pay the DCH Visitor Location e. Foreign MSC DCH pays the Visited carrier Register (VLR) logs user within VLR Roaming Foreign Registration Rob Mattison © 2011 Rob Mattison www.ra-academy.org 272 of 364
- 308. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Postpaid Billing My Network Roaming Network TAP CDR Management Originate Roamer CDR is process ◦ Mediation ◦ Roaming Billing System ◦ TAP FILE Creation ◦ DCH (Clearance) Home MSC Foreign MSC ◦ Payment for CDR’s Billing Normal system mediation DCH mediation CDR Feed To Mediation Rob Mattison Home Network Home Carrier TAP CDR Management (Country A) TAP File Received From DCH Normal Paid For CDR for Call TAP File processed ◦ Mediation DCH Mediation ◦ Postpaid Billing System ◦ Bill to Customer TAP(Roaming) TAP Billing System Visited FILE Network (Country B) Rob Mattison TAP Cdr From visited network Types of Postpaid Roaming Agreements Mediation System Credit Terms (see Credit Management Section) Postpaid ◦ HUR Billing System g y ◦ NRTDE Bill to Visited Home Customer Network Network (Country B) (Country A) Rob Mattison © 2011 Rob Mattison www.ra-academy.org 273 of 364
- 309. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Postpaid Billing Credit Rules (HUR) Credit Rules (NRTDE) For HUR Agreements the credit limit is Home Carrier responsible for monitoring set for the agreement credit All customers have same credit limit Host (Visited Network) doesn’t manage Home carrier can ‘release’ or ‘lock’ release lock ce t s credit risk account Rob Mattison Rob Mattison High Usage Report Method Hosting Carrier (the one providing service) is required to manage credit risk Processes ◦ Credit Risk Detection ◦ Credit Risk Notification ◦ Credit Disposition Orders ◦ Credit Risk Containment Rob Mattison Credit Risk Detection Credit risk detection methods Hosting Carrier must stay aware of how Billing System Monitoring much credit each roaming has used ◦ Same as postpaid billing When they detect that the credit Use of Fraud Management System t es o threshold has been reached, they are as bee eac e , t ey a e ◦ Common required to notify the home and ask for Credit Management Systems direction Rob Mattison Rob Mattison © 2011 Rob Mattison www.ra-academy.org 274 of 364
- 310. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Postpaid Billing Why Billing System Monitoring Why Fraud Management System? Pro’s Pro’s ◦ Already in operation ◦ Easy to set up ◦ Most accurate ◦ 24x7 staffing ◦ Easiest to administer ◦ Network Sensitive Con’s Con’s ◦ More expensive ◦ Lack of sophistication ◦ Not easy for 24x7 ◦ Training of network engineers in policy ◦ Lack of flexibility ◦ Poor Followup Rob Mattison Rob Mattison Credit Risk Detection When credit limit is reached Carrier to send High Usage Report Rob Mattison © 2011 Rob Mattison www.ra-academy.org 275 of 364
- 311. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Prepaid USSD Billing What is USSD USSD Roaming • GSM network service providing for fast communication between the user and an application. • The underlying technology resembles SMS, both in technical and functional aspect, but has a number of benefits that will be disclosed further. 2001 Rob Mattison The Revenue Assurance Academy +1-847-426-2098 www.ra-academy.org 1 © Copyright 2009 Rob Mattison 2 • USSD is session-oriented technology; • Initially USSD was employed to allow subscribers to manage their profiles in HLR and interact with services data transfer is performed within one embedded in HLR. session. • Later, the technology was improved to include external • Services, built on USSD resemble applications. • To date, USSD is the best choice to build informational Interactive Voice Response [IVR] systems. services with underlying dialogs: • Th major difference from IVR is th t The j diff f i that – information retrieval, USSD does not involve voice channels to – mobile banking, – customer care, etc. establish connection between service and • Mobile operators worldwide successfully implement subscriber terminal. USSD. 3 Rob Mattison Rob Mattison • How it works • Characters * and #, framing the dialed number, Subscriber checks balance of account with operator. differentiate a request to USSD-application from a trivial • At the USSD-gateway level, the respective service has phone call. the number 100 assigned. • USSD instruction is sent over signaling channels to the • To utilize the service a subscriber dials the sequence switch, then through VLR to HLR, further to USSD- *100# and clicks send to send the request- gateway that routes it to respective USSD-application. • The same operation a subscriber p p performs to dial a • USSD-application interacts with billing system database, phone number. receives necessary info and sends it in USSD packet to • Most terminals will display Requesting instead of the subscriber terminal. traditional Calling, indicating that GSM network • Content of the packet is displayed on the terminal. If attempts to process your USSD request. business logic of USSD-application envisages further communication with subscriber, the session does not terminate. • Specifically, a subscriber can perform a transaction with a set of services or receive additional info. Rob Mattison Rob Mattison © 2011 Rob Mattison www.ra-academy.org 276 of 364
- 312. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Prepaid USSD Billing The Original “poor man’s prepaid roaming” • Unstructured Supplementary Service Data (USSD) is a technology unique to GSM. • It is a capability built into the GSM standards for the support of transmitting information over the signaling channels of the GSM network. • USSD provides session-based communication, enabling a variety of 7 applications. Rob Mattison Rob Mattison 8 USSD Roaming – Approach Mobile Terminate • USSD Codes and Programs are stored on • Customer MSRN is retrieved and the the networks of Home and Roaming customer is called Partners • Roaming partner receives inbound interconnect call and makes connection Rob Mattison 9 Rob Mattison 10 Mobile Originate • Billing can be for Inbound Interconnect – When the customer wants make a call while only roaming, they invoke the USSD code, which triggers a “callback” from the Home MSC • Or – The Home MSC Calls the customer MSRN, • Postpaid CDR Based (Normal postpaid and provides a di lt d id dialtone or connection ti roaming charges for Flagfall • Flagfall charges are worked into prepaid costs Rob Mattison 11 Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 277 of 364
- 313. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Prepaid USSD Billing Key Attributes: How it works • USSD is instant session oriented, unlike SMS, • USSD commands are routed back to the which is a store-and-forward, transaction- mobile network's Home Location Register oriented technology. (HLR), allowing for the virtual home • Turnaround response time for interactive environment concept – the ability for applications is shorter for USSD over SMS services (Based on USSD in this case) to ( ) because of the session based features of USSD session-based USSD, and because it is NOT a store and forward work just as well and in exactly the same application. way when users are roaming. • Users do not need to access any particular • Unstructured Supplementary Services phone menu to access services with USSD - Data (USSD) works on all existing GSM they can enter the Unstructured Supplementary mobile phones. Services Data (USSD) command directly from the initial mobile phone screen. • Both SIM Application Toolkit and the Wireless Application Protocol support Rob Mattison 13 USSD Rob Mattison 14 USSD service flow How it works…contd • In operation, USSD is used to send text • Typically, a user requests a service by entering a short code (e.g. *121* 676#) on his mobile phone. The format between the user and some applications. of the short code follows USSD standard but its content • USSD should be thought of as a trigger is specific to each service. rather than an application itself. • The short code contains the service code (e.g. 121) and optional service related information (e g 352) This code service-related (e.g. 352). • Enables other applications such as is passed across the mobile network to the USSD prepaid. gateway and routed to the application. The application sends the response back to the subscriber through the • In operation, it is not possible to bill for USSD Gateway within the same USSD session. USSD directly, but instead bill for the • For USSD Phase II, the session can consist of an application associated with the use of unlimited sequence of messages between the subscriber and the application. In addition, a USSD session can USSD such as circuit switch data, SMS, or also be initiated by the application. prepaid. Rob Mattison 15 Rob Mattison 16 USSD Methods USSD Code Originate • USSD Originate • Customer types in USSD Code • Parameter String AutoDial • USSD Code instructs Home MSC to Dial • CAMEL MSRN • Hybrids H b id • Customer Gets Dial Tone and Dials Number Rob Mattison 17 Rob Mattison 18 © 2011 Rob Mattison www.ra-academy.org 278 of 364
- 314. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Prepaid USSD Billing Parameter String AutoDial • Customer dials: – *USSDcode#Phonenumber# • USSD Program on Visit switch forwards to home MSC • Home MSC Dials Number • Customer is rung up when connection is made Rob Mattison 19 © 2011 Rob Mattison www.ra-academy.org 279 of 364
- 315. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Prepaid Billing Prepaid CAMELAgreements Customer ◦ Has prepaid account ◦ Has Balance Accounting rules for ◦ Has agreed to roaming agreement (call forward) Home Carrier ◦ Agrees to “sponsor” and manage AA(a) for customer / foreign carrier ◦ Allows foreign carrier to decrement IN(Prepaid Balances) ◦ Agrees to pay for customer calls (against prepaid Decrement) Foreign Carrier ◦ Provide Service • Prerequisite ◦ Agrees to decrement IN Properly •Roaming Business Models ◦ Generates CDRs •Roaming Signaling ◦ Collect off of CDRs •Postpaid Roaming DCH ◦ Middleman – CDRs ◦ Middleman – Financials (possible) Under a CAMEL agreement Prerequisites The Home Carrier must provide access to IN for Preconditions Visitor Carriers ◦ Home Network Customer authorized for Prepaid Roaming on Home Network The Visitor Carrier agrees to decrement IN Balance (entry in HLR) properly Home Network establishes Prepaid Roaming Contract with Foreign network (define credit method/limit etc. ) The Home Carrier agrees to pay for TAP Files CAMEL Parameters loaded and tested on IN (gsmSCF) submitted by Visiting Carrier IREG/TADIG Tests Customer agrees to have balances utilized for ◦ Visit Network CAMEL Agreement in Place services IREG/TADIG Tested ◦ DCH contract enabled Testing complete DCH contract finalized IREG/TADIG Filed CAMEL IS An enhancement to basic SS7 , MAP/INAP protocols MAP/INAP are not Mobile Sensitive Requirement to stage for UMTS/IMS migration © 2011 Rob Mattison www.ra-academy.org 280 of 364
- 316. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Prepaid Billing CAMEL Spec Phase I Customised Applications for Mobile Introduce a new “superset” of Intelligent networks Enhanced Logic Network components ◦ (ETSI TS 123 078) Co existence with Standard SS7 ◦ Set of standards designed to work on either a GSM core network or UMTS network. t k t k co po e ts components ◦ Allow an operator to define services over and Interweaving of commands and controls above standard GSM services/UMTS services. ◦ Based on the Intelligent network (IN) standards, and uses the CAP protocol. HLR Contains GMSC- GMSC-HLR Communication Information about CAMEL status of Routing information customer Customer Status ◦ CAMEL Version Location Information ◦ CAMEL Service Keys y Subscription Information Service Key indicates which CAMEL Service to be invoked Suppression of announcements (CAMEL DATA IS PASSED THROUGH) Prepaid Voice is a CAMEL Service ◦ With concomitant Service Key CAMEL Renaming CAMEL CSI (Camel Subscriber Info) HPLMN (Home Carrier) VPLMN (Visiting Network / Roaming Location) CSI IPLMN (Interrogating Party – could be any) O-CSI Originating CSI D CSI D-CSI Dialed Service CSI SS7 CAMEL T-CSI Terminating CSI MAP / INAP Protocol CAP Protocol VT-SCI Visited MSC Terminating CSI TIF-CSI Translation Information Flag SSP (Switch/MSC) gsmSSF (Switch/MSC) N-CSI Network CSI SCP (IN Component) gsmSCF(IN Component) © 2011 Rob Mattison www.ra-academy.org 281 of 364
- 317. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Prepaid Billing Mobile Originate Prerequisite ◦ Customer pays AAA on Roaming Network Rules for ◦ Visited MSC/VLR is loaded with customer account information and permission (postpaid) Call Sequence ◦ The customer calls Someone ◦ Visited MSC Checks VLR ◦ Sees that the customer has prepaid CAMEL ◦ Initiates CAMEL Sequence CAMEL SEQUENCE: Visited Network Decrements IN Balance Per POLLING PERIOD CAMEL Sequence (until “end of call” or “end of balance”) Poll gsmSCF for permission for polling period Balance for 2 Min (poll period?) Receive Permission Initiate Call OK/Yes HOME (repeat as needed) IN IN CDR For Roaming Call Home Visited Network Network (Country A) (Country B) End of CALL: End of CALL/BALANCE Visited Network Generates a CDR Home Network gsmSCF clean up finished (Country A) MSC then generates a CDR for the call Normal CDR for Call Visited Network (Country B) © 2011 Rob Mattison www.ra-academy.org 282 of 364
- 318. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Prepaid Billing Home TAP CDR Management Originate Network (Country A) Prepaid Roamer CDR process ◦ Mediation Normal ◦ Roaming Billing System CDR for Call ◦ TAP FILE Creation ◦ DCH (Clearance) DCH Mediation ◦ Payment for CDR’s System TAP(Roaming) TAP Billing System Visited FILE Network (Country B) TAP Cdr Home Carrier TAP CDR Management From visited network TAP File Received From DCH Paid For Data TAP File processed Warehouse ◦ Mediation Reconcile CDR Visited And Recognize ◦ Data Warehouse Revenue Network IN CDR (Country B) ◦ Reconcile of TAP FILE vs INCDR for For Roaming Call Decrements ◦ Recognize Revenue Home HOME IN Network (Country A) Mobile Terminate Someone calls the customer Rules for ◦ They call the customers Home Number (that is the only number they know) Home MSC gets the phone number for g p the customers on the roaming network (MSRN) Home MSC place interconnect call to customer at their new temporary MSRN Same as for Postpaid © 2011 Rob Mattison www.ra-academy.org 283 of 364
- 319. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Prepaid Billing IAM IAM VLR VLR MSRN Switch Switch BTS BTS BSC BSC Switch Switch GMSC GMSC Home Home Visited Visited Network Network Network Network (Country A) •Handset •---------- (Country A) •Handset •---------- (Country B) •SIM (Country B) •SIM •IMSI •IMSI Standard Arrangement - Prepaid IAM Switch Caller pays for the call from where they GMSC are to the MSC Paid by ◦ If caller is OnNet it will be a local caller ◦ If caller is calling from another country or caller carrier, th will pay th l i they ill the long di t distance charges h Paid by to customers Home MSC Roaming Roaming Customer (Receiver) will pay for Customer the long distance call from the Home MSC to the Roaming Location ◦ Decrement from their IN (realtime) IAM FlagFall Charges Switch If visited network has agreement they may GMSC charge for Mobile Terminate as well Paid by In this case, the VisitedNetwork will: caller Yes/OK 1. Decrement Home IN for minutes utilized Balance Available (2min-poll period?) Paid by 2. Generate a CDR Roaming 3. Submit for Payment (DCH-HomeCarrier) Customer 4. Home Carrier will then apply to Prepaid Customer IN (Balance) Camel Settlement © 2011 Rob Mattison www.ra-academy.org 284 of 364
- 320. Revenue Assurance Foundations RAF104: Partner Foundations Roaming: Prepaid Billing Step1: Visited Network Decrements IN Balance Step2: FLAGFALL CHARGES Per POLLING PERIOD Balance for SUBMITTED TO HOME CARRIER 2 Min (poll period?) OK/Yes Home Network Normal HOME IN (Country A) CDR for Call DCH Mediation System TAP(Roaming) Home TAP Billing System Visited Visited Network Network FILE Network (Country A) (Country B) (Country B) TAP Cdr From visited network Prepaid CAMEL Issues Vulnerability of IN to other carriers Accuracy Data Warehouse Reconciliation Shortfalls Reconcile CDR Visited DCH Challenges And Recognize Revenue IN CDR Network (Country B) Complexity and customization of CAMEL For Roaming Call makes it difficult to standardize and manage Home HOME IN Network (Country A) © 2011 Rob Mattison www.ra-academy.org 285 of 364
- 321. Revenue Assurance Foundations RAF104: Partner Foundations Data Roaming Data Roaming – 3 Cases GSM (CDMA) – Data Roaming (GPRS/EVDO) Internet / WIMAX Roaming WiFI Roaming DATA ROAMING Internal Roaming : The Mobile Station (MS) moves from one access point (AP) to another AP within a home network because the signal strength is too weak. An authentication server (RADIUS) assumes the re-authentication of MS via 802.1x (e.g. with PEAP). The billing of QoS is in the home network. A Mobile Station roaming from one access point to another often interrupts the flow of data between the Mobile Station and an application connected to the network. The Mobile Station for instance periodically monitors the presence of Station, instance, alternative access points (ones that will provide a better connection). At some point, based upon proprietary mechanisms, the Mobile Station decides to re-associate with an access point having a stronger wireless signal. The Mobile Station, however, may lose a connection with an access point before associating with another access point. I WIFI ROAMING n order to provide reliable connections with applications, the Mobile Station must generally include software that provides session persistence. External Roaming The MS(client) moves into a WLAN of another Wireless Internet Service Provider (WISP) and takes their services (Hotspot). The user can independently of his home network use p y another foreign network, if this is open for visitors. There must be special authentication and billing systems for mobile services in a foreign network.[ © 2011 Rob Mattison www.ra-academy.org 286 of 364
- 322. Revenue Assurance Foundations RAF104: Partner Foundations Data Roaming Roaming Implementation in Wi-Fi - How WiFi roaming works Roaming is not integrated to Wi-Fi, even if Wi-Fi is a wireless network. In the Standard 802-11 F, the station chooses the Requirement to pass from an Access Point to another, while remaining Access Point it wants to connect on and it operates connected. like this: Some operators are trying to implement roaming in Wi-Fi through protocols like the Inter Access Point Protocol which need a A station arrival in the association of areas covered by distribution system to broadcast information between Access Points. many Access Points This leads to the creation of a “trial and use” (standard 802-11 F) used further by operators to implement their own methods. Moving of a station in the association of areas covered With standard 802-11 F, the station is re-associated, instead of by many Access Points associated during the connection on a new Access Point. Also, the Access Point have to monitor continuously access to the Card notification requirement. distribution system. Three exchanges request, confirm, response. Request, corresponds to a station arrival in the association of areas covered by many Access Points. f db A P i Confirm indicates if the function request ends correctly. An Access Point sends a function indication after a request to signal his association with the station aimed. Response by which the old Access Point sends to the new Access Point all the network information about the aimed station. GPRS Major Logical Components APN – Defines the service (backend) that will be A GPRS connection is established by reference to its managed and delivered Access Point Name (APN). APN is defined and managed by GGSN The APN defines the services such as: Establishes the point of connection between GPRS and the b k d (internet service or application) th backend (i t t i li ti ) Wireless Application Protocol (WAP) access, PDP – Unique session identifier (an address , a Short Message Service (SMS), thread .. A point of continuity) Multimedia Messaging Service (MMS), Defined by SGSN or GGSN, establishes the logical unit Internet communication services such as email and of work to be managed World Wide Web access. © 2011 Rob Mattison www.ra-academy.org 287 of 364
- 323. Revenue Assurance Foundations RAF104: Partner Foundations Data Roaming APN Defines the service that will provide internet Access to the user. Public Internet apn1 Corporate C SGSN GGSN apn 2 Intranet apn3 WAP Server Static IP Address Radius HLR Server HLR IN PDP Context Visited SGSN Special Billing Postpaid Billing Pricing , Usage Default Information Radius Server (From Source) Or Other Service Aware Unit WIMAX/CDMA “Real” Mediation System Postpaid Billing System MOBILE IP STANDARD © 2011 Rob Mattison www.ra-academy.org 288 of 364
- 324. Revenue Assurance Foundations RAF104: Partner Foundations Data Roaming Mobile IP Mobile IP Internet users take advantage of wireless technology 1. Mobile Node in each mobile device when accessing the Internet. 2. Home Agent in each such device’s home network. Connections are lost whenever a user moves to a new Optionally, a Foreign Agent may be present in the network. network the device is visiting. g Mobile IP is the Internet standard for allowing users to 3. Both Home Agents and Foreign Agents normally seamlessly roam among wireless networks. reside within routers in their network. Using Mobile IP, applications such as Internet telephony, media streaming and virtual private networking can be supported without service interruption when users move across network boundaries. Moble IP 16 Mobile IP16 is designed by Internet Engineering The packets in Internet are routed to the network the Task Force (IETF) to allow mobile subscribers to subscriber’s IP address belongs. move from one network to another while To maintain the seamless roaming, Home Agent (HA) entity is introduced in the home network. maintaining a permanent IP address to maintain the Mobile b ib (MS), h l M bil subscriber (MS) when leaves the network, th t k usage of resources and services on the move. initiates a binding request to its Home Agent via Foreign Agent (FA) residing in the visited network. Foreign Agent advertises a care-of address (CoA) in the visited network and links the Mobile subscriber’s home address (HoA) to the CoA by sending a binding request. Packets are sent from a correspondent node (CN) to the destination network. The HA intercepts these and diverts them to the FA using the mobile node’s care-of address. HA encapsulates the packets with an outer IP header and sends to FA through a tunneling protocol. d t th h t li t l FA, when receives the tunneled packet, removes the outer header and forwards the contents to the mobile user directly. Security to prevent denial of service attack on the network is established with a shared key between MS and HA. HA checks the key every time there is a request. © 2011 Rob Mattison www.ra-academy.org 289 of 364
- 325. Revenue Assurance Foundations RAF104: Partner Foundations Data Roaming How Mobile IP Works When a mobile device visits another network, IP datagrams destined for the device are intercepted by its Home Agent and tunneled to The Mobile IP components listen to the visited network using a temporary IP address. ICMP router advertisements and If there is a Foreign Agent on the visited network, it receives the tunneled packets, unpacks them and forwards them to the Mobile Routing socket message from IPNET, Node; otherwise, the Mobile Node itself receives the tunneled packets and Allows for fully automatic operation with no user unpacks them. handling required once initially configured. Finally, the Mobile Node reinserts the original datagrams into the stack, resulting in a transparent operation using only the original IP If manual intervention is required, the mobile IP addresses. modules may be shutdown, reconfigured or Replies to the originating host can either be sent directly from the Mobile Node to the host, or tunneled back to the Home Agent, restarted using either a function API or simple shell which in turn unpacks and forwards the replies to the host. command. In a visited network that contains a Foreign Agent, the Mobile IP datagram flow in a network without a Foreign Agent. Mobile Node does not require any IP address. This requires the Mobile Node to have a public IP address in Furthermore, the Foreign Agent only requires one the visited network. public IP address for all Mobile Nodes. • RFC 1256 ICMP Router Discovery Messages • RFC 2003 IP Encapsulation within IP • RFC 2004 Minimal Encapsulation within IP • RFC 2104 HMAC: Keyed-Hashing for Message Authentication • RFC 2784 Generic Routing Encapsulation (GRE) • RFC 2794 Mobile IP Network Access Identifier Extension for IPv4 • RFC 3012 Mobile IPv4 Challenge/Response Extensions • RFC 3024 Reverse Tunneling for Mobile IP, revised • RFC 3344 IP Mobility Support for IPv4 • RFC 3846 Mobile IPv4 Extension for Carrying Network Access Identifiers © 2011 Rob Mattison www.ra-academy.org 290 of 364
- 326. Revenue Assurance Foundations RAF104: Partner Foundations Data Roaming HA - Home Agent The Home Agent is responsible for routing data to mobile nodes currently attached to a foreign network. Achieved through a tunnelling process in which a CoA (Care-of-Address) C A (C f Add ) Used to deliver the data to the mobile node. This CoA may be associated with a FA (Foreign Agent), in which case it is termed a FA CoA; or, it may be a co-located CoA meaning the mobile node is allocated an IP address in the foreign network. © 2011 Rob Mattison www.ra-academy.org 291 of 364
- 327. Revenue Assurance Foundations RAF104: Partner Foundations Content Horizontal Assurance For Content Content • “Content” is the “trade” name given to a collection of advanced value added services offered Offerings of this type tend to be extremely complicated for many reasons: – Eclectic mix of technologies (GPRS, 3G, Voice, SMS, MMS, etc) – Complex mix of business partnerships (content providers) Rob Mattison – Several generations of infrastructure to support 1/25/2011 11 © Copyright 2007 XiT 2009 Rob Mattison •2 Assurance Areas Assurance Areas 1. Are you accurately capturing all content receipt Customer events? Content 2. Are you reconciling content received against invoices Content Content Provider paid (overbilling?) Invoice 3. Are you accurately capturing all content deliver Content Content events? Invoice 4. Are you reconciling content delivery against content Delivery Receipt Payment receipt (accepting content that no customer wants?) 6 5 3 1 5. Are you creating invoices that accurately describe all 4 2 content delivery events? Customer Content Reconciliation Content Reconciliation 6. Are you collecting all payments due for content Billing Delivered Received Received vs Invoice vs invoiced to customers? Accounting Delivered Accounting Content Received Rob Mattison •3 Rob Mattison •4 Complexities In order to do assurance: • Different infrastructure for different content • Inventory of content offered • Different payment methods / modes for • Inventory of content providers different content/customer type/content provider Rob Mattison •5 Rob Mattison •6 © 2011 Rob Mattison www.ra-academy.org 292 of 364
- 328. Revenue Assurance Foundations RAF104: Partner Foundations Content Types of Service Type of Service Assurance • Continuous Service - Subscription • Understand business model – i.e. Ringback Tone, Voice Mail • Understand partners / exchanges • Alerts and Notifications – Subscription – Weather Alerts , News Service, Sports • Account for all aspects of transaction • Specific Services – On Demand – Delivery, Location Service, Traffic Info • Purchases – On Demand – RingTones, Music • Premium Rate – On Demand – Online Dating, Horoscope Rob Mattison •7 Rob Mattison •8 Delivery Media Media Issues • SMS • Delivery architecture • MMS • Assure points • Voice Mail / Recording • Transaction capture Points • WAP / Web W b • Email • Data File • Streaming (Video/Audio) Rob Mattison •9 Rob Mattison •10 Key Forensics Understanding the Delivery Chain • Business Model – Rules of Exchange and • Content Inventory: Payment – Video Alerts – MMS • Billing and Settlement Infrastructure – Text Alerts – SMS – Other - WAP • Provisioning • Games • Control of Customer • Mobile TV • Music • Control of money • Video Clips • Billing • Weather • Wallpaer • Settlement • Phone Directory • Fraud Proofing Rob Mattison Rob Mattison •11 •12 © 2011 Rob Mattison www.ra-academy.org 293 of 364
- 329. Revenue Assurance Foundations RAF104: Partner Foundations Content Typical SMS Revenue Management Infrastructure SMS Alerts • Key components of SMS Architecture – MSC – SMSC – IN 1/25/2011 13 13 © Copyright 2007 XiT 2009 Rob Mattison •14 Postpaid SMS – How does it work? CDR HLR MSC Web (sent to mediation) 1. Subscriber types an SMS message into Portal STP phone and addresses to the phone Email MSC number of recipient Portal 2. SMS message is forwarded to SMSC for delivery Other ESME’s SMSC 3. CDR is created and forwarded to billing HLR MSC (External Short Message STP Entities) MSC Rob Mattison •15 Assurance Areas MMS Content Customer Content Content Content Provider Invoice Content Content Invoice Delivery Receipt Payment 6 5 3 1 Video Alerts 4 2 Customer Content Content Billing Delivered Reconciliation Received Reconciliation Received vs Invoice vs Accounting Delivered Accounting Content Received 1/25/2011 17 17 © Copyright 2007 XiT 2009 Rob Mattison •18 © 2011 Rob Mattison www.ra-academy.org 294 of 364
- 330. Revenue Assurance Foundations RAF104: Partner Foundations Content Assurance Areas Current Content – Video Alerts 1. Are you accurately capturing all content receipt • Currently Video Alerts (the only MMS service) events? are billed on a monthly subscription basis 2. Are you reconciling content received against invoices paid (overbilling?) • Assumption: Any video downloaded is included 3. Are you accurately capturing all content deliver in the fee events? • In this case assure can be summarized as: 4. Are you reconciling content delivery against content receipt (accepting content that no customer wants?) – A. Assuring that all people registered are paying 5. Are you creating invoices that accurately describe all – B. Assuring that all people registered are getting the content delivery events? service 6. Are you collecting all payments due for content – C. Assuring that no one else is getting downloads invoiced to customers? Rob Mattison •19 Rob Mattison •20 Assuring that all registered clients are paying To assure • Standard method of maintaining • 1. Attain a listing of all customers subscription information is either via: authorized for the service on HLR or User – MM5 – Transaction to check with HLR Database – MM6 – Transaction to check with User • 2. Attain listing of all customers being Database billed by the VASP • Either a dedicated MMS user database or • 3. Identify and address gaps the HLR will be utilized to track which customers are signed up for which service Rob Mattison •21 Rob Mattison •22 Alternate assurance method (postpaid) Invoice (and prepaid) account and content management • 1. Attain a listing of all customers authorized for the service on HLR or User Customer Database VASP MM7 MM1 Interface Interface • 2. Attain listing of all customers configured for recurring billing within billing system • 3. Compare and identify gaps Prepaid Account Management System Rob Mattison •23 Rob Mattison •24 © 2011 Rob Mattison www.ra-academy.org 295 of 364
- 331. Revenue Assurance Foundations RAF104: Partner Foundations Content MM9 Interface Audit Points • Assuring the MM9 Interface (to prepaid) is MM7 Transaction MM1 much more difficult than MM8 Delivery Log Log • MM9 will not, by default create a CDR or VASP Customer other auditable record MM1 MM7 Interface Interface • This creates several problems: MM9 Prepaid Log – How to determine what to pay the vendor MM8 CDR Log – How to assure the interface Reconciliation Processes Prepaid Account Management System Rob Mattison •25 Rob Mattison •26 Paying for prepaid content Alternative Methods for Prepaid • Many telcos simply “trust” that vendor • 1. Transaction log of all transactions of content reports of content delivered and pay the delivery type – compared against invoice invoice amount • 2. Transaction log of all transactions fed over MM9 interface – compared against invoice • Several flaws: – Delivered to MMSC is NOT delivered to client and client only pays for what is downloaded • (Method 2 takes care of reconciling content received and content delivered at the same time. – No was to assure volume Method 1 requires another verification step) Rob Mattison •27 Rob Mattison •28 To assure the “per download” Assuring billing/prepaid and collections services • Assuming the customer pays for 1. Determine how content is being downloads received model, the revenue forwarded to customer assurance for billing, prepaid decrement 1. WAP/SMS vs WAP/IP and collections fall back to the integrity of g y 2. If WAP/SMS – then utilize the SMS method the MMS billing and collections systems discussed earlier • These systems involve both content and 3. IF WAP/IP then continue person-to-person transactions and are considered a separate assurance exercise Rob Mattison •29 Rob Mattison •30 © 2011 Rob Mattison www.ra-academy.org 296 of 364
- 332. Revenue Assurance Foundations RAF104: Partner Foundations Content Identify • Billing method being utilized Content Content The Internet WAP Received • Capabilty of WAP server to generate logs Provider Gateway Log Content Sent to Customer Log • Ch Choose th b t combination t capture all the best bi ti to t ll IN MSC CDR Log 6 audit points MSISDN IP Address Prepaid Reconciliation • Generate appropriate reports Log Processes Customer Rob Mattison •31 Rob Mattison •32 © 2011 Rob Mattison www.ra-academy.org 297 of 364
- 333. Revenue Assurance Foundations RAF104: Partner Foundations Virtual Network Operations (VNO) Virtual Network Operations (VNO) The Virtual Network Operator and Revenue Assurance Presents interesting challenges to the revenue assurance professional On the one hand there is a limited “scope” of activity hand, scope compared to the full operating company On the other hand, there are “special” revenue risks VNO due to dependence upon partners Everything covered so far will be of importance to the VNO either directly or indirectly Critical Terms and Concepts What is a Virtual Network Operator? Boundary Analysis A Virtual Network Operator (VNO) is a provider of – The process of understanding the nature of the exchange management services and a reseller of network boundary services from other telecommunications suppliers Boundary Controls y that does not own the telecommunication – Controls between the VNO and Carrier Provider to assure the revenues infrastructure. Deep Controls These network providers are categorized as virtual – Controls inside of the carrier operator systems to assure the because they provide network services to customers VNO’s Revenues without owning the underlying network. Revenue Stream Interpolation and Decomposition – The process of interpolating the carrier provider revenue stream A VNO typically leases bandwidth at the wholesale and defining the deep controls necessary to assure them from the rates from various telecom providers in order to VNO Perspective provide solutions to their customers. How to approach RA in these cases? VNO Foresensics Step 1 : Exchange Analysis Step 3 : Assure all exchanges for integrity – Develop a clear understanding of the contractual and assurance (see content , partner responsibilities and boundaries between assurance techniques) organizations Step 4 : Identify Upstream and DownStream Step 2: Develop Complete “Onboard” risks (areas where failure on the partner’s Revenue Maps part creates a risk for you). – In other words develop YOUR REVENUE MAPs Step 5 : Create additional controls for these not the customer view Upstream/Downstream Risks © 2011 Rob Mattison www.ra-academy.org 298 of 364
- 334. Revenue Assurance Foundations RAF104: Partner Foundations Virtual Network Operations (VNO) Functional Responsibility Matrix MVNO Example Own Partner1 Partner2 Partner3 I. Network x x The Functional Responsibilities Matrix II. Mediation III. Postpaid Billing x x Provides a foundation point for risk analysis a b Point of Sales Management Activation / Provisioning x x x x and responsibility mapping c Channel Management x d Postpaid Billing and Rating x The need for revenue assurance is IV. Prepaid Billing x exponentially higher in the VNO case a b Sales Channel And Collection SIM Generation x x x because there are so many more “hand offs”, c Top UP Management x x “points of failure” and “fraud and negligence” d e Traffic Mgmt Acct Mgmt x x opportunities to be taken into account f Rating x V. Interconnect Billing x a Routing x b Rating x IV. Prepaid Billing x a Sales Channel And Collection x x b SIM Generation x c Top UP Management x x d Traffic Mgmt x e Acct Mgmt x f Rating x Operational Mapping V. Interconnect Billing x a Routing x b Rating x c Billing x For each area that is “fully your VI. Roaming x x responsibility”, the Revenue Mapping and Assurance Controls will pertain a Activation / Provisioning x x x b TAP Mgmt x x c DCH Management x x x x x For each area that is “fully out of scope”, a Partnership Assurance analysis and controls d Postpaid Billing e Prepaid Billing x x x VII. Customer Service x x will need to be generated a Account Adjustments x x b Account MACD x x In those cases where there is ‘shared VIII. Collections Management x responsibility” a joint plan will need to be x developed IX. Credit Management Special Risks There are several “special risks” associated with VNO revenues. These include all of the “classical risks” associated with any partner (ie interconnect/roaming/content). – An assumption of common interest and common integrity is usually a mistake – Inclusion of “assurance controls” into the VNO contract is usually critical © 2011 Rob Mattison www.ra-academy.org 299 of 364
- 335. Revenue Assurance Foundations RAF105: Profit Foundations Intro to Margin Market Assurance Margin and Market Revenue Max Overview Assurance : An Overview • What is Revenue Maximization ? • Which Domains are included for RA? • How did it find its way into the RA ximization agenda? d ? • How is it approached and positioned? Revenue Forensics Revenue (Model Development) Maximization Revenue Analysis and Forecasting Cost and Risk Forensics Analysis (Model Development) Development of model specific to the revenue stream to be assured Partner Ri k and C t P t Risks d Costs Controls Alarms Controls Alarms Reports and alarms as defined by the Billing Risks and Costs Revenue Reporting Tracking Reporting Tracking specified models Network Risks and Costs Corrections Corrections implemented as indicated Market Risks and Costs (Forensic/Alarm Indicated) by forensics or alarms Sales Risks and Costs Subsidy Risks and Costs Compliance Report to management on the administration of the process Revenue Model Development Revenue Max Risk Assessment Dimension Controls and Alarms Revenue Reporting • Key controls for fraud containment Requirements • Best opportunity for Fraud Revenue Granularity Management Inclusion and Review Reporting Periocity ximization Control and Alarm Setting Operationalization © 2011 Rob Mattison www.ra-academy.org 300 of 364
- 336. Revenue Assurance Foundations RAF105: Profit Foundations Intro to Margin Market Assurance Forensics Findings – Risks Identified and Quantified Model Parameters Revenue Max Major Implementations Domains (Approaches) • Margin Analysis Network Line of – Tracking and Assuring Positive Revenue Business Marketing Flow • Market Analysis – Assessing tracking and assuring the risks to Assessing, ximization New Technology Deployment Interconnect Bundles market Asset Utilization Assurance Content Promotions – Assessing, tracking and assuring the risks of marketing activities Fault Management New Product Assurance Development Rate Plan Assurance • Asset Analysis Forecast – Assessing, tracking and assuring the Churn Assurance optimum revenues associated with assets Margin Analysis Candidates Market Analysis Candidates Network Line of Network Line of Business Marketing Business Marketing New Technology New Technology Deployment Interconnect Deployment Interconnect Bundles Bundles Asset Utilization Asset Utilization Assurance Content Assurance Content Promotions Promotions Fault Management Fault Management New Product Rate Plan New Product Rate Plan Assurance Assurance Development Assurance Development Assurance Forecast Churn Forecast Churn Assurance Assurance © 2011 Rob Mattison www.ra-academy.org 301 of 364
- 337. Revenue Assurance Foundations RAF105: Profit Foundations Intro to Margin Market Assurance Lifecycle – Controls Development Revenue Max Revenue Max Margin Assurance 1. Identification of Domain of Interest • Loss due to a discrepancy in the 2. Definition of Revenue Reporting Requirements margin (sales price lower than cost) 3. Acquisition of Revenue Data of Interest • Loss due to a discrepancy in the 4. 4 Identification of Risk/Cost Domains of Interest margin (revenue not counted ximization ximization 5. Forensic Analysis of Domains of Interest correctly) 6. Creation of Functional Model for Domain of Interest • Loss due to a discrepancy in the 7. Setting of Alarm Levels / Responses margin (the “profit” is much lower than expected) 8. Development of Control Reports 9. Operationalization of Controls/Alarms Rate Plan – Revenue Max Revenue Max Market Assurance Bundle Assurance • Prices and Margins • Rate Plan or Bundle Generates • Market Impacts and Risks Negative Revenue Stream • End to end – comprehensive market • Rate Plan or Bundle Generates Revenue Stream much lower than ximization ximization assurance • New products / New Technologies expected • Holding Forecast to Actual Revenue Max Revenue Max New Technology Assurance New Product Development • When the engineers “upgrade” • Margin and Rate Plan Assurance technology.. What are the revenue risks? • Market Share Assurance • Several areas of major risk: – Authentication / Authorization • Billing Architecture Compliance ximization ximization – Accounting • Revenue Stream Integrity • Transaction tracking / integrity • Transaction capture • Billing and Revenue Assurability • Transaction granularity • User Acceptance Testing • Transaction billing model • Revenue Management Chain Alignment • BAA (Billing Assurance Architecture) © 2011 Rob Mattison www.ra-academy.org 302 of 364
- 338. Revenue Assurance Foundations RAF105: Profit Foundations Intro to Margin Market Assurance Network Asset Utilization – Revenue Max Revenue Max Market Share Assurance Asset Variable Rate Billing • BTS – Utilization and Outage • Churn Management • MSC – Utilization and Outage • Revenue stream loss due to loss of customers ximization ximization • What is the revenue “cost” • H How t measure to associated with outage • How to predict • How to measure, quantify and • How to address maximize • How to manage the risk and assess the alternatives © 2011 Rob Mattison www.ra-academy.org 303 of 364
- 339. Revenue Assurance Foundations RAF105: Profit Foundations Network Asset Assurance Improve profit by the more intelligent utilization, acquisition, organization or maintenance of network assets Maintenance The Revenue Stream of the Telco is • Adjust MTTR / Replacement Rate based upon the dependent upon network assets in the revenue exposure that network element outage field to support, generate and account for represents that revenue Asset Acquisition When network assets fail, or when • Determine what/when/where assets should be added based upon revenue risk (as opposed to networks are designed poorly, there can traffic realization) [question the all traffic is be serious revenue consequences profitable assumption] Is the process of : Planning, design and the effective • Assessing and measuring the risk to revenue (the management of the network has always actual revenue loss) associated with the failure of been the responsibility of network network assets engineering and the NOCC. g g • Defining appropriate levels of corrections, controls D fi i i t l l f ti t l and compliance to In the “traditional” telco operations Monitor the risk to revenue (or actual revenue loss) model, the responsibility for the Measure the risk “soundness” of the network has been a Contain the risk to revenue network operations responsibility © 2011 Rob Mattison www.ra-academy.org 304 of 364
- 340. Revenue Assurance Foundations RAF105: Profit Foundations Network Asset Assurance Standard operational guidelines have a BTS Maximization network fault management group which MSC Maximization is measured by: • MTBF (Mean time between failure) • MTTR (Mean time to repair) Why does RA need to get involved? The BTS represents the 2nd line of capacity Same issues as BTS but on a larger distribution geographical scale One BTS will support a limited geographical area That BTS can be : • Overutilized (loss business due to lack of capacity available • Underutilized (engineering problems with signals/design) • Failed (the Device can go down) RA is concerned with Revenue At Risk NOT You have to learn the BASICS of the Network Engineering It is the engineers job to worry about HOW to issues they deal with accomplish things You have to be sure that you: It is the RA job to : • Stay out of the role of “extra head working on the extra • Measure problem) • Assess • Stay out of the role of “auditor” • Predict • Contain The risks inherent in the environment © 2011 Rob Mattison www.ra-academy.org 305 of 364
- 341. Revenue Assurance Foundations RAF105: Profit Foundations Network Asset Assurance The second challenge in this case is the fact Successful delivery of service requires a that there is no: large number of network elements. • Simple Attempting to isolate one can give you a • Reliable • Irrefutable false read: • Direct • First – failure may be due to the other end, or the Way to measure the revenue potential, or even customer, or any number of other factors the revenue actualization/realization for an • Second – revenue “credit” must be shared across individual network component all domains Step 1: Obtain NE Fault/Failure information for each Element in the MSC A C6 inventory Step 2: Develop Artifacts which assign an C3 approximate revenue loss to each unit of BTS 2 MSC B C9 measure BTS 1 C4 C5 Step 3: Create historical loss report C1 C2 BTS 3 C7 C8 Margin/Asset/Market assurance Develop a “Systems Flow Diagram” of how the location information is managed. combination Specify specific technology, accuracy limitations Include how the location/time/condition information is transmitted to the billing/rating engine This could tend to be an extremely Complex I/T – database environment © 2011 Rob Mattison www.ra-academy.org 306 of 364
- 342. Revenue Assurance Foundations RAF105: Profit Foundations Network Asset Assurance Once the streams are understood define While the opco will probably start with the revenue risks involved only one plan/offer, it is likely to Define “control points” and reports to expand rapidly to all kinds of non- assure the entire stream conventional offers/models. Promotion assurance and Marketing assurance controls will be required to manage this information Without this kind of control infrastructure deals/offers/plans can quickly get to be out of control and unmanageable BAAC • Postpaid User Acceptance Testing CDR Collection Points – Operational and Tested CDR Integrity Verification – All traffic captured and reported • Billing verification Mediation Verification Transport, I/O, FSEC • Assurance verification Postpaid Billing Verification Rates, Volumes, Treatment, Presentation • Network capabilities Adjustments , Refunds Processing • User Usability Testing Rating Assurance • Prepaid • Verification of marketing claims/education vs Traffic (all activity accurately managed by IN) Rating capability / actuality Channel Acct Management © 2011 Rob Mattison www.ra-academy.org 307 of 364
- 343. Revenue Assurance Foundations RAF105: Profit Foundations Interconnect Margin Analysis Margin Analysis – Margin Analy What is Margin Analysis? Interconnect Examples • The process of assessing the difference between the RETAIL PRICE of an item/service (the published rate) and the ysis WHOLESALE COST of that same item Margin Analy Why Do Margin Analysis? Margin Analy Where is margin analysis applied? • People assume that when the price • New Product Development is set for a product that there is a • New Interconnect Partner clear positive margin, and that it will • New Content Partner always be there ysis ysis • New Service Plan Margin Analy Margin Analy What happens Cases • Disconnect • Trunkgroup prices shift with no • No Closed Loop Mechanism feedback to retail • “Frayed Edges” • Interconnect partner prices change ysis ysis with no feedback • Partner ratio assumptions shift with no feedback • “Hidden” negative margins (for years without detection) © 2011 Rob Mattison www.ra-academy.org 308 of 364
- 344. Revenue Assurance Foundations RAF105: Profit Foundations Interconnect Margin Analysis Margin Analy Margin Analy Margin Gaps Margin Analysis Steps • Margin Gaps occur because the • Step 1 – Revenue, Cost and Operational Stream Analysis people responsible have lost track • Step 2 – Overall Risk Assessment of all of the different facets of the • Step 3 – Exchange Analysis price/margin process ysis ysis • Step 4 – Process Analysis • Typically, all are done correctly at • Step 5 – Systems Analysis the start , it is only over time that the • Step 6 – Numerical Analysis “laxness” works its way into the • Step 7 – Risk Quantification organization and operations • Step 8 – Recommendation Margin Analy Interconnect – Revenue Stream Interconnect Revenue Delivery Retail Wholesale Settlement Stream Stream Rate Stream Rate Stream Switch Interconnect Channel Retail Rate Setting Monthly Adjustment Price Negotiation • POI (interconnect switch) or GMSC • Normal Switch (initiate/terminate traffic) (+/-) Wholesale Regulatory Tracking of Mediation Trunk Group Constraints Variance Price Propagation • CDR Collection Points Interconnect Billing Satellite Feed Contractual Constraints Variance Impact on Wholesale / Retail • Mediation ysis • Interconnect Billing (Wholesale) g Margin g Price Alignment Internet Retail Rate Credit Risk Retail Billing Connection (IP) Publishing (Adjustments) • Postpaid Billing (Retail) Point of Interconnect Retail Rate Propagation Fraud Loss (Adjustments) • Prepaid Billing (Retail Prepaid) Cost of Sales POI – Switch (Adjustments) Be sure to understand all channels and all GMSC Credit Risk components (Adjustments) Fraud Loss (Adjustments) Interconnect – Interconnect – Margin Analy Margin Analy Wholesale Rate Stream Retail Rate Stream • IC Partner Negotiation Process • Retail Rate Setting • Price Negotiation and RE- • Retail Rate Propagation / negotiation processes Publication ysis ysis • P i propagation chain (New price Price ti h i (N i • R t il R t R Retail Rate Reset P t Procedures d to wholesale and retail billing) • Rate Posting • How do wholesale rates get changed? • How do retail rates get changed © 2011 Rob Mattison www.ra-academy.org 309 of 364
- 345. Revenue Assurance Foundations RAF105: Profit Foundations Interconnect Margin Analysis Interconnect Partner – Margin Analy Margin Analy Delivery Stream Settlement Process (Trunk group Costs) • How are costs agreed upon • Rates are set • How are they officially accepted • How are the new rates Propagated to rating • Monthly Settlement (how are rates adjusted when trunk group costs vary?) y ) • Difference (reported vs settled ysis ysis • Where is the trunk group inventory? amount)t) – How do you know which trunk group goes with which partner/destination and rate ? • Where is the trunk group costing register? – Who has the official costs – How and when are the trunk group costs paid? – Where tracked and how? Margin Analy Revenue Stream Analysis • Identify which revenue stream(s) are to be included in the margin analysis • For each stream, identify the: – Revenue (history and forecast) ( y ) ysis – All components in the revenue management stream – All components in the cost management stream – All components in the sales channel – All components in the supply channel Margin Analy Margin Analy Develop a Margin Formula • Retail = () Retail – Cost = Margin • Cost = – Wholesale cost () – Trunkgroup (attachment) cost () Retail / Cost = Margin % – * Retail cost of sale () ysis ysis – * Retail Credit loss () Retail / Margin = Retail Margin % – * Retail Fraud Loss () – * Wholesale Credit Loss () Cost / Margin = Cost Margin % – * Wholesale Fraud Loss() – * optional © 2011 Rob Mattison www.ra-academy.org 310 of 364
- 346. Revenue Assurance Foundations RAF105: Profit Foundations Interconnect Margin Analysis Margin Analy Margin Analy Margin Formula Calculate Overall Margin • Do not include an element in the • Use margin formula formula if it is not significant and out • Use “gross numbers” for all areas of the normal range • Get the overall “margin” for the – Ie – cost of sales (if this is simply a ysis ysis business b i normal part of the overall cost of sales and not unique to the destination than do not include it) Margin Analy Getting your numbers High Level Margin _ Monthly 1a Retail Sources 1a Revenue Standard interconnect revenue (inbound/termination) + Retail Revenue 2a Cost Wholesale (postpaid Billing) – for the month 2a Wholesale Standard interconnect cost (outbound / Origination) 2b Trunk group 2b Trunk group Total cost for all trunkgroups (monthly) 2c Retail - COS ysis 2c Retail - COS Extraordinary Retail COS associated with interconnect 2d Retail - Fraud 2d Retail - Fraud Fraud losses in interconnect for the month 2e Retail - Credit 2e Retail - Credit Credit losses in interconnect for the month 2f Wholesale – Fraud 2f Wholesale – Fraud Fraud losses in wholesale for the month 2g Wholesale – Credit 2g Wholesale – Credit Credit losses in wholesale for the month Margin Analy Margin Analy Monthly High Level Report True Margin Analysis • Develop to establish a benchmark • With this benchmark in place, you • Have a clear understand of the are ready to review detailed margins ‘level” that you will assess all others ysis ysis against • M i t b reviewed at th Margins to be i d t the: – Trunk group (attach) Level – Partner Level – Destination Level – Inbound vs Outbound Level © 2011 Rob Mattison www.ra-academy.org 311 of 364
- 347. Revenue Assurance Foundations RAF105: Profit Foundations Interconnect Margin Analysis In order to perform this Margin Analy Margin Analy Collect all source information analysis • Data Warehouse or sophisticated Sources DB required 1a Revenue CDRs (Retail and IC) – Destination / Trunkgroup/ Partner/ Revenue 2a Wholesale CDRs (IC) Destination / Trunkgroup / Partner / Revenue • You can do it with Access if the 2b Trunk group Total Costs By Trunkgroup ysis ysis volumes are low enough and your 2c Retail - COS Retail COS – allocated by destination or partner or adjusted for a PC is big enough. percentage of traffic 2d Retail - Fraud allocated by destination or partner or adjusted for a percentage of traffic 2e Retail - Credit allocated by destination or partner or adjusted for a percentage of traffic 2f Wholesale – Fraud allocated by destination or partner or adjusted for a percentage of traffic 2g Wholesale – Credit allocated by destination or partner or adjusted for a percentage of traffic Margin Analy Now Compare Margins Margin Analy Analysis of Outputs • Retail Vs Wholesale • Review the reports created – By Destination / Trunkgroup / Partner • Identify those • Revenue VS Cost trunkgroups/partners/destinations ysis ysis – B Destination / Trunkgroup / Partner By D ti ti T k P t where the ratio goes significantly below or above the “mean” established at the high level Standard controls for Margin Margin Analy Margin Analy Risk Flags Leakage • Anywhere that the ratios are too • Change Management Procedures high or too low are flags for further • Margin Tracking investigation • Audits ysis ysis • Your job is to explain WHY the ratio • Fraud Management is off the norm • Credit Management © 2011 Rob Mattison www.ra-academy.org 312 of 364
- 348. Revenue Assurance Foundations RAF105: Profit Foundations Interconnect Margin Analysis Change Management Margin Analy Margin Analy Change Management Procedures • Key areas where change • RA Review management controls may be – Rate plan – margin impact required – Rate plan – propagation of rates – New interconnect partner price ysis ysis – Rat Plan – routing / traffic impact agreement – New trunkgroup/sourcing cost agreement – New partner installation Margin Analy Margin Tracking Controls Margin Analy Audits • During the forensic analysis process all • Random audits in key areas should of the data and reports required to do be recommended to “keep people tracking of the margins was developed. honest” • To productionalize these reports should p p ysis ysis be trivial • Key steps: – Define “alarm” levels for margin reports – Define “monitoring” responsibility – Define compliance, tracking and reporting responsibilities Margin Analy Margin Analy Fraud Management For the fraud case • Is the fraud exposure due to the • Standard fraud lack of a fraud management system risk/remedy/recovery analysis ? should be done and included in the profile ysis ysis • Can fraud controls be tightened to reduce the fraud risk? © 2011 Rob Mattison www.ra-academy.org 313 of 364
- 349. Revenue Assurance Foundations RAF105: Profit Foundations Interconnect Margin Analysis Margin Analy Margin Analy Credit Risk Credit Risk Profiling • Credit risk (consumer and partner) • 1. Identify high risk customers/partners can add significantly to the margin • 2. Establish new policies for doing losses business : – Cash in advance ysis ysis • Institution of credit management – Daily settlement procedures and a credit risk profiles – Settlement in advance may be indicated • 3. Be sure to re-calibrate the margin and alarm levels based upon discoveries and policies Margin Analy Margin Areas Margin Analy Getting Involved • Interconnect • Skills Required • Content (variations for technology – Good understanding of Interconnect but the basic process is the same) Business Model – Good understanding of systems ysis ysis – N d t add i f t t Need to dd infrastructure and special d i l (sourcing) costs – Good understanding of network – Be careful on exchange analysis and infrastructure systems analysis – Contract / exchange analysis is key – Big data warehousing, data analysis requirement © 2011 Rob Mattison www.ra-academy.org 314 of 364
- 350. Revenue Assurance Foundations RAF105: Profit Foundations Applied Margin Assurance Market Assura Applied Margin Margin Assurance Universe Assurance • Assets and Interconnect are only two of the many areas where margin assurance is applied ance Roaming, Content, Promotion and Product Margins Market Assura Margin Assurance Domains Market Assura MA : Roaming • Line of Business • Key Ingredients: – Interconnect, Roaming, Content, Broadcast • Promotion Based ance ance – Rate Plans, Bundles • Product Based – New Products, Existing Products Market Assura Market Assura Margin Gaps Margin Analysis Steps • Margin Gaps occur because the • Step 1 – Revenue, Cost and Operational Stream Analysis people responsible have lost track • Step 2 – Overall Risk Assessment of all of the different facets of the • Step 3 – Exchange Analysis price/margin process ance ance • Step 4 – Process Analysis • Typically, all are done correctly at • Step 5 – Systems Analysis the start , it is only over time that the • Step 6 – Numerical Analysis “laxness” works its way into the • Step 7 – Risk Quantification organization and operations • Step 8 – Recommendation © 2011 Rob Mattison www.ra-academy.org 315 of 364
- 351. Revenue Assurance Foundations RAF105: Profit Foundations Applied Margin Assurance Market Assura Market Assura Roaming Roaming – Revenue Stream • All normal billing Costs Risks • TAP-IN Revenue Stream • Signaling • Signaling • TAP-OUT Revenue Stream • DCH • DCH • In-Roamer Traffic • Administration • Admin • Out-Roamer O t Roamer Traffic ance ance • Margin (Wholesale) • Fraud Roaming Partner – Market Assura InRoamer Revenue Stream Market Assura Delivery Stream • All lines of business • Roaming Margins • Roaming Billing – OnNet • Roaming Settlement – IB/OB – Domestic/International – Roaming billing ance ance Market Assura Market Assura Settlement Process Key Exchanges • Rates are set • Roaming Agreements • Monthly Settlement • Signalling Costs • Difference (reported vs settled • DCH Costs ance ance amount)t) • OutRoamer Credit Risks / Overuse Policy © 2011 Rob Mattison www.ra-academy.org 316 of 364
- 352. Revenue Assurance Foundations RAF105: Profit Foundations Applied Margin Assurance Market Assura Market Assura Exchange Analysis Develop a Margin Formula • Identify “Expert” for each Exchange • Retail = () • Cost = • Develop understanding of terms, – Wholesale cost () conditions, exceptions and – * DCH cost () – * Signaling Cost() consequences of the exchange ance ance – * Retail Credit loss () • Typically exchanges define LIMITS – * Retail Fraud Loss () and GUIDELINES – * Wholesale Credit Loss () – * Wholesale Fraud Loss() • Be sure to understand liabilities and responsibilities – * optional Market Assura Market Assura Margin Formula Retail – Cost = Margin • Do not include an element in the formula if it is not significant and out Retail / Cost = Margin % of the normal range – Ie – cost of sales (if this is simply a ance ance Retail / Margin = Retail Margin % normal part of the overall cost of sales Cost / Margin = Cost Margin % and not unique to the destination than do not include it) Market Assura Market Assura Calculate Overall Margin High Level Margin _ Monthly • Use margin formula Sources 1a Revenue Standard roaming revenue (inroamer / outroamer ) + Retail Revenue • Use “gross numbers” for all areas (inroamer/outroamer) – for the month 2a Wholesale Standard wholesale cost (inroamer/outroamer) • Get the overall “margin” for the 2b DCH/Signalling Total Cost for Month ance ance business b i 2c Retail - COS Extraordinary Retail COS associated with interconnect 2d Retail - Fraud Fraud losses in interconnect for the month 2e Retail - Credit Credit losses in interconnect for the month 2f Wholesale – Fraud Fraud losses in wholesale for the month 2g Wholesale – Credit Credit losses in wholesale for the month © 2011 Rob Mattison www.ra-academy.org 317 of 364
- 353. Revenue Assurance Foundations RAF105: Profit Foundations Controls, Compliance Quantification The Challenge Controls, Compliance and Quantification • How do you do a credible job of revenue assurance in the confusing , complicated and un-accountable world of marketing? Controls, • Accountability, measurability and Compliance and risk assessment are more badly needed here than in the other areas Quantification It is possible ! Summary of the problem Controls, Compliance and Quantification Controls, Compliance and Quantification • You need to understand • How do I measure market activities – What is needed • How do I assess risk ? – What is missing • How do I quantify activities? – How to create the structure that makes it possible • Ho do I turn marketing HOO DOO into How t rn HOO-DOO Revenue Assurance: – Quantification – Rationalization – Risk Assessment – Accountability – Measurability? Challenges Controls, Compliance and Quantification • How to map a direct relationship between marketing investment and revenue results? © 2011 Rob Mattison www.ra-academy.org 318 of 364
- 354. Revenue Assurance Foundations RAF105: Profit Foundations Controls, Compliance Quantification Problem Summary Controls, Compliance and Quantification Controls, Compliance and Quantification Relate A to B??? • Marketing activity occurs and is targeted based upon one criteria (segmentation) • Revenue tracking is based upon another criteria (customer usage behavior … ie sales) Challenge #1 Challenge #2 Controls, Compliance and Quantification Marketing is done at the SEGMENT level – there is usually Controls, Compliance and Quantification Marketing impacts are only meaningful when measured over no way to provide precise TARGET information time. (Cumulative effect is what counts0 Solution: Solution: • Track activity historical • Define the least common denominator • Do not measure or report based upon [point in time]. (Map Segment to Customer) • Shift to cumulative impact accountability for all • Create marketing accountability (define all activity programs in terms of market segment Result: target and impact) – Reality in assessment of program impacts Result: – Its not about fair.. Its about truth. If conflicting programs confuse customers and one program Ability to track marketing activity in nullifies another THAT is what is important terms of results that are measurable Challenge #3 Developing the Solution Controls, Compliance and Quantification Controls, Compliance and Quantification Conflicting goals for market activities all have positive and negative consequences. Which is correct? • Building the environment that allows Solution: for the implementation of a • WAR Framework • Measure overall impact on customer and market comprehensive, dependable and • Do not ISOLATE one perspective meaningful market assurance • Balanced assessment environment is not: Result: – True perspective on what is happening in the market – Easy – Fact based, reality based, quantifiable data – People can argue about which result is desired, not about – Fast which is true – Cheap © 2011 Rob Mattison www.ra-academy.org 319 of 364
- 355. Revenue Assurance Foundations RAF105: Profit Foundations Controls, Compliance Quantification If you want to assure market CRITICAL FACTOR Controls, Compliance and Quantification Controls, Compliance and Quantification activity • You need to: • It is critical that IF you get involved – Understand these issues – Understand that these problems are not in market assurance areas that you “optional” come fully equipped with an • You cannot just “skip over” these 3 fundamental stumbling blocks to market assurance and expect understanding of: to get good results – You CAN build your expertise and solution – The CORE ISSUES (our discussion one step at a time as long as you make it here) clear to everyone: • What the problems are – The Vocabulary, Issues, Concerns, • What the costs are (in terms of money, time, procedures, operations and accountability) Constraints, Politics and Dangers that • What the benefits are getting involved in these areas entails This is like ANY OTHER revenue You MUST STAY WITH THE Controls, Compliance and Quantification Controls, Compliance and Quantification assurance domain: DISCIPLINE AND 1. There must be a recognized need STRUCTURE that management AND the operational manager recognize • The RA Approach 2. It must be decided that the unique – Disciplines (Forensics, Controls, disciplines, disciplines approaches and structure Corrections, Corrections Compliance) that revenue assurance provides is – Structure (Risk Assessment, the way that management wants to Quantification, Coverage Plan approach the problem Development) 3. You must learn the vocabulary, • Will allow you to navigate this issues, tools and KPI’s that drive quagmire each domain involved If you abandon the Controls, Compliance and Quantification Controls, Compliance and Quantification discipline… Problem #1 – Part 1 • The discipline will abandon you • Getting control of the marketing side • At this point, marketing activity It is easy to “get lost” in these areas occurs according to it’s own “song” and t get persuaded th t th rigor d to t d d that the i • I order t work, there needs to be In d to k th d t b should not apply an accountability mechanism put into place © 2011 Rob Mattison www.ra-academy.org 320 of 364
- 356. Revenue Assurance Foundations RAF105: Profit Foundations Controls, Compliance Quantification The Marketing Accountability Controls, Compliance and Quantification Mechanism • 1. All marketing activities (all expenditures) must be registered. – That is.. Any time someone decides to spend money on the accomplishment of a marketing objective, there must be an accounting) – This will provide the starting point for tracking Challenges Controls, Compliance and Quantification Controls, Compliance and Quantification Marketing Activity Registration • Name of activity (Campaign, Price Plan, Product • Having only some people register etc.) marketing activities some of the • Product Involved time will tend to undermine the effort • Price Set • Rationalization for Price (Price Planning Model) • You can still do it but it will be it, • Th Segment t The S t targeted (Whi h customers are t t d (Which t to be impacted) impossible to filter out the • The Impact to be seen: cumulative and collateral impacts – WAR (Wallet Share (increased spending and/or increased usage) , Acquisitions, Retention) • To start we will have no choice – The time frame associated • Collatoral impacts anticipated – Positive and Negative Making this work Controls, Compliance and Quantification • In order to put this activity in place, there will be several “corrections” to the operational model that must Marketing take place: Activity – Training – of marketing personnel in Registration (Segment, Impact what is required and how to deliver (WAR, Product, Revenue) – Processes – associated with the capture and storage of this information © 2011 Rob Mattison www.ra-academy.org 321 of 364
- 357. Revenue Assurance Foundations RAF105: Profit Foundations Controls, Compliance Quantification Controls, Compliance and Quantification Problem #1 – Part 2 • Making it possible to track the impacts of marketing activity • The problem: – Y need to map marketing segments You dt k ti t to individual customers – One customer can belong to several segments The Marketing Tracking Challenges Controls, Compliance and Quantification Mechanism Controls, Compliance and Quantification • Segment Declaration • Define criteria for segmentation that – Marketing must specify the criteria for the meets the requirements of both definition of each segment that they include in their targeting statements marketers, I/T and Revenue • S Segment Assignment A i Assurance – Customers must be mapped to “all • Create Customer Master Database segments” That they belong to to store the customer segment membership information – This will make tracking of marketing impacts possible Segment Registration Segment Mapping Controls, Compliance and Quantification Controls, Compliance and Quantification • Name of Segment • Create Customer Master DB • Characteristics of Segment • Assign Segment membership to (Demographic, Psychographic, each and every customer each time Behavioral) ) –E Even if it i bi is binary (Y/N) • Segment Mapping (Criteria for identifying segment members .. How do you know there are any customers like this?? Prove it and provide criteria for tagging them) © 2011 Rob Mattison www.ra-academy.org 322 of 364
- 358. Revenue Assurance Foundations RAF105: Profit Foundations Controls, Compliance Quantification Making this work Controls, Compliance and Quantification • In order to put this activity in place, there will be several “corrections” to the operational model that must take place: – Creation of databases – Assignment of responsibility for the construction and maintenance of the customer database – Creation of procedures and responsibility for the registration of segments and the mapping of segments f f • Currently: – Marketing – Business Intelligence – Direct Marketing Customer – Market Research Segment Master – I/T Definitions (All customers and all segment affiliations) Controls, Compliance and Quantification Problem #1 – Part 3 • Putting it all together • How to relate actual Revenues to Marketing Targets • Th problem: The bl – You need to tie off the two side of the equation ? ? The Customer Activity Challenges Controls, Compliance and Quantification Controls, Compliance and Quantification Database • The last piece in the puzzle is the • Responsibility for the creation and creation of a database that holds all continuous upkeep of the system of the revenues that each customer • Responsibility for the creation of generates for each product each reports for tracking month • This database makes it possible to tie-off and measure impacts © 2011 Rob Mattison www.ra-academy.org 323 of 364
- 359. Revenue Assurance Foundations RAF105: Profit Foundations Controls, Compliance Quantification Making this work Controls, Compliance and Quantification • Putting all of these pieces together will make it possible to show a direct correlation between a marketing claim and a result • This is key for tracking and assessing: Segment Definitions – New Product Customer Revenue Customer – Rate Plan Master (All customers and all – Bundle Campaign segment affiliations) Registration – Network Asset Utilization Tracking Reports Measure based upon longer Controls, Compliance and Quantification Controls, Compliance and Quantification Problem #2 – timeframes NOT point in time Cumulative Effects • A “snapshot” view of revenues is • This mechanism still will not factor meaningless out for cumulative effects • You need to: • What is important about marketing g – Ch Change th database t accumulate the d t b to l t activity is the OVERALL IMPACT on and report on history and trend NOT customer revenue stream NOT just point in time isolated point in time – Change the assessment method to • You need to address this problem review based on cumulative impact not • point in time impact (false read) Making this work Controls, Compliance and Quantification • Change the paradigm for the Customer Revenue – Dec interpretation of results Customer Revenue – Nov • Move the longer range tracking • St t t h ld marketing accountable Start to hold k ti t bl Customer Revenue – Oct Customer Revenue – Sep Segment Definitions Customer Revenue – August Customer Revenue – July Customer Master Customer Revenue – June (All customers and all Campaign Customer Revenue – May segment affiliations) Registration Quarterly / Annual Tracking Report © 2011 Rob Mattison www.ra-academy.org 324 of 364
- 360. Revenue Assurance Foundations RAF105: Profit Foundations Controls, Compliance Quantification Controls, Compliance and Quantification Controls, Compliance and Quantification Problem #3 – Problem #4 – Collateral Effects Conflicting Objectives • What happens when 10 programs all • What do you do when different target the same customer? people try to effect different • How do you “filter” the collateral impacts? changes? • Retention vs Wallet Share vs • You cannot, you must keep a “history” of Acquisitions? segment movement, and a ‘history’ of targeting shifts and than accept and factor in the collateral impacts – REALITY not FAIRNESS Solution – THE WAR Controls, Compliance and Quantification Framework • Bottom line tracking of all marketing objectives within a comprehensive framework © 2011 Rob Mattison www.ra-academy.org 325 of 364
- 361. Revenue Assurance Foundations RAF105: Profit Foundations Intro to Market Assurance Market Assura What is Market Assurance? Market Assurance • Market assurance is the term we use to describe the process and disciplines associated with the assurance of market shares or ance revenue streams from a marketing and revenue flow perspective Where does Market Assurance Why Do Market Assurance Market Assura Apply? Market Assura and Analysis? • Rate Plan Assurance • Fundamental Question • Bundle Assurance – Is the loss of revenues at the source (people paying in less money to the • Network Asset Utilization company) a form of leakage? p y) g ance ance • New Product Development – Is it a legitimate case for RA ? • Churn Management All include facets of market assurance Market Assura Market Assura How Different Differences • Must get involved in understanding, measuring • Includes some new data sources and forecasting market activity – This is much more complicated than the measuring – Market research and forecasting of internal activity (operations and systems) – Sales data – This requires a different frame of reference and – Demographics ance ance number of new concepts to master – It opens up a new set of “clients” for the RA team, namely the CRM “crew” • And new tools • Marketing – Propensity models • Sales • Customer Service – Prediction models • Product Development / Product Management © 2011 Rob Mattison www.ra-academy.org 326 of 364
- 362. Revenue Assurance Foundations RAF105: Profit Foundations Intro to Market Assurance How do market assurance Market Assura Market Assura How is it similar? leakage scenarios come about? • Represents a “risk to revenue” just • Assumptions about the like all other leakage responsibilities of : • Comes about as “in scope” only – Marketers when the operational teams have – Product managers ance ance “missed” some aspects – Sales teams • Lack of discipline / rigor associated with plans, forecasts and projects Market Assura In General Market Assura The Magic Factor • Most CRM focused groups work • Marketeers and product managers have enshrouded marketing and market with KPI’s and Focus that holds analysis with a significant amount of revenue and margin as “part of the “magic ingredients”. picture picture” • In reality the mastery of the concepts reality, concepts, ance ance • Holistic views of revenue as related tools and interpretation of these specialized areas are no more difficult to market, and especially the than the mastery of different technoligies. measurement of impacts or forecasts is incredibly difficult • It is just different © 2011 Rob Mattison www.ra-academy.org 327 of 364
- 363. Revenue Assurance Foundations RAF105: Profit Foundations Marketing Forensics Challenges Marketing Forensic Analysis – Part 1 Forensic Analysis for What is the challenge? Measuring Marketing Effectiveness • Ultimately, in order to be effective in the assessment of market applications , you need to have a standard way for the measurement of what is being done How then can we Marketing Forensic Analysis – Part 1 This is not easy Marketing Forensic Analysis – Part 1 measure? • Multiple layers of product, price • How do you measure? plan, bundle, program and channel • How do you analyze? cloud the issue significantly • How do you know ? • The “soft value” of branding soft value activities defies straightforward measurement Component parts of the Marketing Forensic Analysis – Part 1 Marketing Forensic Analysis – Part 1 Dimensions of the challenge problem • Delayed reaction (cumulative effects – positive and negative) • Imprecise targeting (is the target hit or was • Money is invested – to develop another target hit instead) products • Cumulative costing (are all costs included in the calculation) • M Money is i i invested – t sell products t d to ll d t • Accountability (is it tracked and are the authors • The decision to invest is made of the model held accountable for erroneous model components?) based upon “justification models” © 2011 Rob Mattison www.ra-academy.org 328 of 364
- 364. Revenue Assurance Foundations RAF105: Profit Foundations Marketing Forensics Challenges Marketing Forensic Analysis – Part 1 Marketing Forensic Analysis – Part 1 Solution to the problem You will need to develop • Cumulative Effect / Affect (track overall behavior • Either of customers over time, measure cumulative impacts , not single point impacts) – A data warehouse specially dedicated • Cumulative Causality (track all causal factors to marketing tracking and allow credit to all for accurate targets) • Or • Targeting (you must develop a targeting mechanism that allows you to measure against – A very complicated collection of your cumulative causality and effect/affect) own tables and reports • Accountability (document models, assumptions and forecasts and audit results over time) – In order to do this activity Marketing Forensic Analysis – Part 1 Forensic Steps Marketing Forensic Analysis – Part 1 Controls and Corrections • Risk Analysis – What areas represent a critical “revenue at risk” scenario vs • Changes in procedures are often “normal marketing activity” • Exchange Analysis required – Dependent upon the specific area • Process Analysis • Sometimes new departments are – What are the key CRM processes associated with Pricing Pricing, Bundling, Product Development, Campaign Development, created Market Research and Tracking for all of them • Systems Analysis • Many reports and tracking activities – What sources of data are available for each critical area? • Statistical Analysis are typically involved – Modeling, Reporting © 2011 Rob Mattison www.ra-academy.org 329 of 364
- 365. Revenue Assurance Foundations RAF105: Profit Foundations Driving Brand Value Driving Brand Value Three things I never lend — my horse, my wife, and my name. Robert Smith Surtee Brand Loyalty Reduce Marketing Costs Trade Leverage Attract New Customers Cushion Competitive Actions 10 Drivers of Brand Anchor to which other associations can be Corp Brand Awareness attached Relationship Management Familiarity-Liking Signal of Substance and Commitment Stakeholder Management Brand to be Considered Process Maintain Strategic Consistency Perceived Quality Reason to Buy Generate purposeful dialog Differentiate Position Market the corporate mission Price Zero based planning Channel Member Interest Infrastructure Extensions Cross functional planning Develop core competencies Brand Associations Help Process and Retrieve Information Customer Database Reaston to Buy Create Positive attitude and feelings Integrated Agency Extensions Loyalty Value Marketing Dis-Integration To Company To Customer Buy more Reduce Risk Lower cost of sales Simplify Decision Making Transaction view vs Relationship View Lower service cost Save Search Time Companies typically perceive their Higher profit More efficient transactions Valuable feedback Eliminate switch costs customer sat as higher than it actually Referrals is Convenient Test (Find, screen , train, setup) Acquisition cost vs Retention 5x to Bed Minimize cost of educating (Sears 20x) supplier Sense of belonging to company © 2011 Rob Mattison www.ra-academy.org 330 of 364
- 366. Revenue Assurance Foundations RAF105: Profit Foundations Driving Brand Value Commercial Relationships are not Personal relationships Perception Commercial relationships are based Trust on: Consistency Social linkage - Personal interaction - Accessibility Retail Psychological Linkage - Packaged goods - Responsiveness Hairspray and Jeans Commitment Financial Relationships - Frequent buyer , Affinity rewards) Liking Structural - EDI, Baxter Terminals in Hospitals Brand Identity Components Brand Identity Brand as Product Product scope, attributes, value, uses, users Brand as organization Organizational attributes (local/global) Brand as Person Personality (energetic, rugged) Relationship (friend, adviser) Brand as Symbol Visual Imagery Brand Heritage Big Mac Shakes Egg McMuffin Fries Burgers Toys COMPONENTS BRANDS Salads PRODUCTS FUN Ronald KIDS Parties FAMILY Playground Core Identity MEALS Extensions McDonalds (golden arches) Value Price Portions Promotions Clean Fast Convenient Hassle Free Service Consistent © 2011 Rob Mattison www.ra-academy.org 331 of 364
- 367. Revenue Assurance Foundations RAF105: Profit Foundations Driving Brand Value Brand Position Brand Personality Part of the identity and value A set of human characteristics proposition that is to be actively associated with a given brand. communicated to the target (gender, age, sex, socioeconomic) audience and that demonstrates an (warmth, comfort, concern, advantage over the competing sentimentality) brands. How do you create a personality? Brand Imagery Personality : How it creates Brand Equity Sponsorship Age A symbol Functional Self-Expression Relationship Benefit Model Model Model Self Expression Model Relationship Basis Model For some customers the brand can Ie (you may not want to be a gang express a part of their personality member, but you would like to know one) Types Apple Computers, Nike Down-to-earth, genuine, old fashioned ,g , Examples? Spirited, young, outgoing (excitement) Brand as a Badge Accomplished, influential Wealthy and sophisticated Brand as part of self Athletic and outdoorsy BRAND AS Friend © 2011 Rob Mattison www.ra-academy.org 332 of 364
- 368. Revenue Assurance Foundations RAF105: Profit Foundations Driving Brand Value Cross and Smith Media Costs per Thousand - CPM 5 - levels Mass media $10-$50 CPM Awareness Direct Mail $250 - $2500 CPM Identity Telemarketing $80000-$24000 CPM Relationship Field sales calls $40,000 - $400,000 Community CPM Advocacy Strategic Consistency Mkt Communications Consistency is the execution of a Brand Positioning systematic plan Consistency is a SYSTEMIC problem Brand Identity Product and Service Performance Customer Driven Philosophy Corporate Core values/mission Consistency Hierarchy The Integration Triangle SWOT Graph Planned Messages 100 Say 80 60 40 Distribution Channel 20 Coverage 0 Customer Service Unplanned Product, Network Quality -20 Messages Service -40 Messages -60 Confirm Do Churn SWOT Critical Lines © 2011 Rob Mattison www.ra-academy.org 333 of 364
- 369. Revenue Assurance Foundations RAF105: Profit Foundations Market Research Market Assura An Introduction What is Market Research? to Telco Market Research • The planning, collection and analysis of data relevant to marketing decision making and the communication of results to ance management. Objectives of market Market Assura What is Market Research? Market Assura research • The utilization of specific • Descriptive – Who are customers? techniques: What are they like? – Surveys • Diagnostic – Why are customers – Focus Groups reacting the way that they are? Why ance ance – Panels churn? – Observations • Predictive – How will customers – Etc. react to an increase in price? • In order to collect useful information about customers Market Assura Market Assura Market Research Process Two types of research • 1. Id and formulate research problem/opportunity • Qualitative Research – Why is information needed? – What is the application for the information? – Interpretive – Feasibility – is the answer knowable? • Quantitative Research – Actionability – how used, when , ROI? ance ance – Check available sources, alternative approaches – H d numbers Hard b • 2. Create the research Design – Descriptive Studies – Who, what, where, when, how questions – Causal Studies – Why ? Identification of dependence variables. • Temporal Sequence? – What order and why? Dependency • Concomitant Variation? - Cause and effect • Spurious Association – Understand relationships of all variables © 2011 Rob Mattison www.ra-academy.org 334 of 364
- 370. Revenue Assurance Foundations RAF105: Profit Foundations Market Research Market Assura Qualitative vs Quantitative Focus Groups Issue Qualitative Quantitative • A group of 8-12 participants who are Types of questions Probing Factual led by a moderator in an in depth Sample size Small Large discussion of one topic • Allows for extensive qualitative ance Information collected Large Small information collection Administration Specialized Generic interviewer • Often utilized as “prep” for Replication Low High quantitative Type Exploratory Descriptive/ Causal Other Qualitative Qualitative Technique Market Assura Techniques Market Assura Rationale • Depth Interviews – Unstructured one-on- • Most buying and usage decisions one interview are largely subconscious and • Projective techniques – Uncover respondents true feelings about a emotional situation • Emotional and subconscious ance ance – Word association tests content is key determinant – Sentence and story completion – Cartoon tests (cartoon w/o words) • Such content is not easily collected – Photo sorts (choose and organize pictures) via quantitative or verbal methods – Consumer drawings – Story telling – Third person technique Other Qualitative Market Assura Market Assura Mystery Shoppers Techniques • People who gather observational data • One way mirror about a store, consumer/employee interaction of other situations. • Shopper patterns • The mystery shoppers acts like a real • Content analysis customer, customer and results are recorded recorded. ance ance • Traffic counters • Many applications in telecommunications – Mystery call center • Physiological – Mystery customer service call – EEG, GSR(galvanic skin response), – Mystery store shopper pupilometer, voice pitch analhysis) – Also used to check on independent agents and brokers © 2011 Rob Mattison www.ra-academy.org 335 of 364
- 371. Revenue Assurance Foundations RAF105: Profit Foundations Market Research Opinion and Behavior Market Assura Market Assura Types of surveys Measurement • People Reader • Door to door – Monitor peoples eyes while reading • Executive interview • RAMS (Rapid Analysis • Telephone interview Measurement Systems) ance ance • Self administered – Hand held device – people turn dial in response to their feelings about what • Ad hoc mail they are seeing or experiencing • Mail panels • Internet Measurement and attitude Questionnaire design Market Assura scales Market Assura process • 1. Define objectives, resources and constraints • Scale = a set of numbers to be • 2. Determine data collection method assigned by a rule to individuals, • 3. Determine question/response format attitudes or behaviors – Open ended? – Close ended? – Dichotomous (yes/no agree/disagree) (yes/no, ance ance – Multiple choice – Scaled response • 4. Decide upon wording – (clear, unbiased, respondents ability to answer, willingness to answer) • 5. Establish flow and layout • 6. Pretest and revise Market Assura Market Assura Sampling Methods Sampling methods • 1. Define population of interest • Probability Samples – Systematic • 2. Choose data collection method – Stratified • 3. Choose sampling frame – Cluster – List of individuals to choose sample – Simple Random ance ance from • Nonprobability • 4. Select sampling method – Convenience • 5. Determine sample size – Judgment – Quota • 6. Develop sample element – Snowball selection plan • 7. Execute sampling plan © 2011 Rob Mattison www.ra-academy.org 336 of 364
- 372. Revenue Assurance Foundations RAF105: Profit Foundations Market Research Market Assura Sample techniques • Pure random – Probability of selection = • sample size/population size – Systematic Sampleing • Use of “skip interval” skip interval ance • Skip interval = population size/sample size – Stratified Samples • Original population is divided into two or more mutually exclusive and exhaustive subsets • Simple random samples from each are chosen – Cluster Samples • Sampling units are selected in groups © 2011 Rob Mattison www.ra-academy.org 337 of 364
- 373. Revenue Assurance Foundations RAF105: Profit Foundations Marketing Process False Assumptions Marketing is a dis-organized, ineffective dis- “voodoo” process that cannot be managed The Marketing Model or understood Marketing cannot be controlled or monitored How to you organize and measure the overall marketing process? Reality Marketing : Definition Marketing can be : The process of developing the best – Well understood understanding possible of customers – Well organized (wants, needs, behaviors and reactions) – Easy to manage and applying that knowledge in order to – Easy to direct and track help optimize the activities of different – Accountable operations / organizations Core Marketing Processes Campaign Components 1. The primary purpose of a telco marketing Merchandise organizations is to create and execute – Long Distance, Wireless, Broadband etc. campaigns, programs and policies Market 2. Campaigns are created based upon the – Consumer, Corporate…. information marketers gather to gain insight into Message customer wants and needs and predictability of – Wallet Share, Acquisition, Retention their responses Media 3. Based on that input markets choose the – TV, Radio, Mail, Phone …. optimum combination of merchandise, message, Margin media, margin and market to accomplish their – Price, Profit etc. set objectives © 2011 Rob Mattison www.ra-academy.org 338 of 364
- 374. Revenue Assurance Foundations RAF105: Profit Foundations Marketing Process Prioritization and Goal Setting Prioritization 1. Id Sponsors for activities Goal S etting Modeling 2. Create projects 3. Assemble teams 4. ID objectives Campaign Campaign Exec ution 5. ID constraints Development Modeling Campaign Development 1. Segmentation 1. Media and message finalization 2. Scoring 2. Media selection and negotiation 3. Propensity Analysis 3. Targeting and scoring 4. Profitability analysis (Compound vs simple modeling) (The modeler) Campaign Execution Need for follow-up follow- Prioritization Goal S etting Modeling Post and during campaign analysis Campaign Campaign Exec ution Development © 2011 Rob Mattison www.ra-academy.org 339 of 364
- 375. Revenue Assurance Foundations RAF105: Profit Foundations Marketing Process Marketing Processes Market Intelligence – Project Management Market Research – Campaign Management la n tio gu ork ns Product Research n tio Re etw ratio – List Management la Internal Conditions N pe gu ork ns O Re etw ratio N pe – Customer O Management Corporate Competition Products Data Warehouse Corporate Competition – Contact Management Customers Products Data Mining Customers – Segment Management – Product Management Processes, Techniques, and Skills Query Reporting, Analytics, and Process Management Processes, Techniques, and Skills Query Reporting, Analytics, and Process Management – Model Management Customer, Product/Profitability, Competitive, and Process Information Customer, Product/Profitability, Competitive, and Process Information © 2011 Rob Mattison www.ra-academy.org 340 of 364
- 376. Revenue Assurance Foundations RAF105: Profit Foundations Segmentation Segmentation Is.. Controls, Compliance and Quantification Segmentation • The way you divide and view the market • Segmentation is the KEY to customer relationship management • You can’t functionally manage the individual relationship • You can manage segments Different Types of Controls, Compliance and Quantification Controls, Compliance and Quantification Segmentation • Structural – Defines the ways channels, PCP’s , Product Managers look at the market (relatively permanent) – Each needs unique combinations and combinations • Ie Sales-Geography, Advertising-Demographic • Targeting – Specific to campaign, program or policy – Changes daily • Which is correct ? – None and all – What is needed is an over-riding segmentation that defines the baseline that the entire organization will utilize Marketing Sales Uses of segmentation Controls, Compliance and Quantification Controls, Compliance and Quantification Policies Product Managers Strategists Planners • Product – Design, Pricing , Features and Functions Management Metrics , Messages Advertising Marketing Direct Marketing – Promotion and Tracking Measures Pre Paid Post Paid • Marketing Reports In-Phone Out-Phone Models – Branding , Acquisition, Revenue Strategy Customer Ops ESD (Sales) Brand Objectives Maximization and Churn Campaigns Budgets CSD (Sales) Kiosks Databases TREATMENTS Dept. Stores Direction • Channel Management Data Warehouse Agents Internet Sites Campaigns, Programs, Promotions, – Sales, Call Center, Internet, Advertising, Billing System Policies, Day to day operations Direct Mail • Finance, Strategy, Planning • Network Planning © 2011 Rob Mattison www.ra-academy.org 341 of 364
- 377. Revenue Assurance Foundations RAF105: Profit Foundations Segmentation The Problem is that this is All Human Beings always shifting and moving Potential Customers All Human Beings Targeted Market Potential Customers Customers Targeted Market Customers Refining market definition We make the segmentation process efficient by predicting better and better who the real customers will be, and focus be All Human Beings on them. Potential Customers Targeted Marke Reducing our marketing Customers expense. Major Segmentation Cluster Analysis Techniques • Traditional Consumer Methods Millie Milwaukee Abigal Oldstyle 12 30 • Quantitative Techniques Bohem Strohs 15 Olympia Opad 19 Pete Smith 2 Bob Blatz 26 • Behavioral Telco Approach Callie Coors Henry Hamms Carl Schmidts 18 29 13 Mick Jagger 27 Henry Weinhard 8 Zelda Pabst 14 John Jones 1 Mary Magda 3 Sam Schlemiel 4 Tom Tuborg 31 Sybil Anchor 11 Billy Bad 5 © 2011 Rob Mattison www.ra-academy.org 342 of 364
- 378. Revenue Assurance Foundations RAF105: Profit Foundations Segmentation CART Typico Segmentación Premier Facturación Regionales Premier Presencia Presencia Nacional Regional Mayor A Nacionales $1,000,000 -- Presencia Presencia Regional Nacional $100,000 -- Operteles Mayor B Competen cia $50,000 -- Directa o Mayor C+ Indirecta $30,000 -- Mayor C- $10,000 -- Comercial Residencial Preferente $1000 -- Preferente $500 -- Masivo Comercial Masivo Residencial Número de Clientes How do you define base Controls, Compliance and Quantification 9% 11% segments? 14% • Behavioral Base 19% – Using Call Data/Billing Data – clustering 47% • Exploitation and Explanation of behavior – Demo/Psycho-graphically enhanced • 1. Database Enrichment • 2. Focus Groups • 3. Statistically significant market research samples Create segmentation Model Segmentation Process Controls, Compliance and Quantification • Start with Billing + CDR 1) Facts 2) You know who 3) Can tie back to all: ID Base For Develop Develop Select Ensure Profiles Measures Segment – Market research Segmenting Of Of Segment Target Compatibility The Segments Segments Attractiveness (Isolatability) – Mkting Market – Sales – Support • Can´t argue © 2011 Rob Mattison www.ra-academy.org 343 of 364
- 379. Revenue Assurance Foundations RAF105: Profit Foundations Segmentation Extended Behavioral Segmentation Extended Behavioral Segmentation Model Industry Sectors Layers Travel Telecom Customer Base Wants Needs Petroleum Consumers Accounts Business Accounts Demographic Health Retail 1st Layer Classical Behavioral Segmentation Banking End Users Consumers Consumers with Basic Layer Consumers Small Business Corporate with 2 Tel #s 2 Tel #s Customer Complexity Fuzzy Frontiers Increase End Users End Users CONCEPTUAL Clustering Wants Clustering Sample Clusters Expansion Wants Extended Behavioral Segmentation Model Extended Behavioral Segmentation Model Segmentation Definition Customer Sample Customer Clusters Expansion Qualitative to the Segmentation Definition DW Scope Behavior Definition Quantitative Needs Interpretati Customer DW DW Scope Behavior Quantitative Needs Qualitative Interpretati to the Customer DW Definition Extraction Interpretati Market Definition Interpretati on Base Definition Extraction Market on Base on Surveys on Surveys 1. Segmentation Raw Variables 1.1 Calling Behavior (minimum last six months) 2. Descriptive Raw variables for Cellular/PCS 2.1 Age The average is a good 1.1.1. Monthly Total number of minutes 2.2 Gender 1.1.2. Monthly Total number of minutes in high rate period 2.3 Marital Status AVG Total Minutes representation only 1.1.3. Monthly Total number of minutes in medium rate period 2.4 ZIP Code 1.1.4. Monthly Total number of minutes in low rate period 2.5 State for this kind of time 1.1.5. Monthly Total number of local minutes 2.6 City CFV Total Minutes 1.1.6. Monthly Total number of local minutes in high rate period 1.1.7. Monthly Total number of local minutes in medium rate period 2.7 Job 2.8 Foreign Flag series 1.1.8. Monthly Total number of local minutes in low rate period 2.9 Handicapped Person Flag (yes or no) TREND Total Minutes 1.1.9. Monthly Total number of domestic minutes 2.10 Contract Flag (yes or no) 1.1.10. Monthly Total number of domestic minutes in high rate period 2.11 Contract Expiration Date ( yes) . Co t act p at o ate (if AVG Total Minutes Disc. Disc 1.1.11. Monthly Total number of domestic minutes in medium rate period 2.12 Handset Type 1.1.12. Monthly Total number of domestic minutes in low rate period 1.1.13. Monthly Total number of international minutes 2.13 Handset Tenure 2.14 Current Price Plan CFV Total Minutes Disc. The coefficient of 1.1.14. Monthly Total number of international minutes in high rate period 1.1.15. Monthly Total number of international minutes in medium rate period 2.15 Prior Price Plan 2.16 Credit Risk or Credit Score TREND Total Minutes Disc. variance helps to to 1.1.16. Monthly Total number of international minutes in low rate period 1.1.17. Monthly Total number of roaming minutes 2.17 Account Situation (on time, delayed, collection, etc.) 2.18 Payment Method (mail, bank, credicard, etc.) represents more AVG Total Minutes Intl. 1.1.18. Monthly Total number of roaming minutes in high rate period 1.1.19. Monthly Total number of roaming minutes in medium rate period 2.19 Previous provider 2.20 Account Tenure precisely time series 1.1.20. Monthly Total number of roaming minutes in low rate period 2.21 Rewards Programs (Airlines, etc.) CFV Total Minutes Intl. 1.1.21. Monthly Total number of internet minutes 2.22 Monthly Revenue (6 months – 24 months) 2.23 Monthly Profitability (6 months – 24 months) with high variance. 1.1.22. Monthly Total number of internet (WAP) minutes in high rate period 1.1.23. Monthly Total number of internet (WAP) minutes in medium rate period 2.24 Number of calls for the customer service (6 months – 24 months) TREND Total Minutes Intl. 1.1.24. Monthly Total number of internet (WAP) minutes in low rate period 2.25 Churn Date 1.1.25. Monthly Total number of minutes inbound 1.1.26. Monthly Total number of minutes outbound 2.26 Churn Reason 2.27 Monthly Total number of calls dropped AVG Rev/User Prod. I The trend helps to to 1.1.27. Monthly Number of different telephone numbers called 1.1.28. Monthly Number of different telephone numbers received 2.28 Monthly Total number of failed calls 2.29 Monthly Utilization of Non Value Added Services CFV Rev/User Prod. I represents more 1.1.29. Monthly Total number of calls 1.1.30. Monthly Total number of domestic calls 2.30 TOP 1 Called Area Code (in the last six months) 2.31 Total number of minutes in the TOP 1 Area Code (in the last six months) TREND Rev/User Prod. I precisely time series 1.1.31. Monthly Total number of international calls 2.32 TOP 2 Called Area Code (at least the last three months) 1.1.32. Monthly Number of different cells visited 1.1 Value Added Service (VAS) Behavior 1.1.1. Monthly Utilization of the VAS 1 2.33 Total number of minutes in the TOP 2 Area Code (in the last six months) with high trend. 1.1.33. Monthly Number of different area codes called 2.34 TOP 3 Called Area Code (at least the last three months) 1.1.34. Monthly Number of different countries called 1.1.2. Monthly Utilization of the VAS 2 2.35 Total number of minutes in the TOP 3 Area Code (in the last six months) 1.1.3. Monthly Utilization of the VAS N 2.36 TOP 1 Called Country (in the last six months) 2.37 Total number of minutes in the TOP 1 Country (in the last six months) 2.38 TOP 2 Called Country (in the last six months) 2.39 Total number of minutes in the TOP 2 Country (in the last six months) 2.40 TOP 3 Called Country (at least the last three months) CONCEPTUAL 2.41 Total number of minutes in the TOP 3 Country (in the last six months) F riend F am ily Mo bile Post Paid Med ium Post Paid Young Only In boun d Age Business Man Business Man 6.7% 8.8% 8.9% Teenager Style Graphs Extended Behavioral Segmentation Model Executive Summary Customer Value Score 7.1% No Mo bile Second L in e Classical Classical High Usage 11.8% Inb ound Ou tbou nd So cial 7.0% 5.7% Fresh man 7.9% Pre Paid Gh ost Pre Paid T eenager Young 20.0% Eventual Low Style Phase User 5.1% Ou t 7.0% 3.6% Rank Segment ARPU Rank Segment ACVS 1 Post Paid Young Biz M an 1837.417 1 High Usage Social Freshman 0.31667 2 High Usage Social Freshman 1582.121 2 Post Paid Young Biz Man 0.311611 3 Young Phase Out 1240.963 3 Post Paid M edium Age Biz M an 0.253121 4 Post Paid M edium Age Biz Man 1186.696 4 Mobile Inbound 0.221597 5 Classical Outbound 640.4879 5 Classical Outbound 0.212562 6 Mobile Inbound 358.8255 6 Young Phase Out 0.211694 7 Teenager Style 342.5207 7 Friends Family Only 0.209281 8 Classical Inbound 279.057 8 Teenager Style 0.202745 9 Friends Family Only F i d F il O l 231.7221 231 7221 9 Classical I b Cl i l Inbound d 0.177899 0 177899 10 Pre Paid Eventual Low User 226.0536 10 No M obile Second Line 0.149783 11 No M obile Second Line 169.7114 11 Pre Paid Ghost 0.13215 12 Pre Paid Ghost 118.8977 12 Pre Paid Eventual Low User 0.13026 Rank Segment APBV 1 High Usage Social Freshman 0.4245 2 Teenager Style 0.345439 3 Post Paid Young Biz Man 0.301536 4 Young Phase Out 0.279732 5 Classical Outbound 0.207768 6 Pre Paid Eventual Low User 0.198316 7 Mobile Inbound 0.186666 8 Classical Inbound 0.175247 9 Post Paid M edium Age Biz M an 0.157936 10 Friends Family Only 0.124181 11 No M obile Second Line 0.087697 Sources: Intelligent Miner FET DW 12 Pre Paid Ghost 0.042149 Source: FET DW © 2011 Rob Mattison www.ra-academy.org 344 of 364
- 380. Revenue Assurance Foundations RAF105: Profit Foundations Segmentation Executive Summary Extended Behavioral Segmentation Model Executive Summary Extended Behavior Segments Description The churn management system is composed by a family of data mining models, reports running in a infrastructure composed by servers, data mining and database software. This report describes in detail all the data mining models used in this system. The first model, and probably the most important, is the Extended Behavior Segmentation Model. The diagram below describes the 12 segments founded. The boxes’ areas are Friend Family Mobile Po st Paid Medium Po st Paid Young WAR Indicators Size Value Customer Satisfaction Issues Only Inbo und Age Business Man Business Man 6.7% 8.8% 8.9% 7.1% No Mob ile Seco nd Line Classical Classical High Usage proportional with the size of each segment. 11.8% Inboun d Outb ound Social 7.0% 5.7% Freshman 7.9% Medium Stable Usage Pre Paid Gho st 20.0% Pre Paid Eventual L ow User Teen ag er Style 5.1% Young Phase Out • Wallet Share Indicators • Size = 7.9% • High level of satisfaction in general Very High Stable Usage 7.0% 3.6% Symmetric Sphere Very High Stable Usage •ARPU: NT$ 1,582.00 Stable Low Usage Work Pattern Young • Revenue Share = 20.3% • Advertisement Very High Inbound Rate Medium Stable Usage •AVG Customer Value Score: 0.32 Work Pattern Very High Mobility Large Outbound Sphere • Total Revenue = NT$ 315,338,796.00 • Value Added Services Work Pattern Positive Trend •AVG Customer Complexity: 0.42 High Inbound Rate Medium Age Work Pattern • Tariff/charging method Short Calls High Mobility High # IVR Calls MIFO Very High Mobility •Replication Reason: Package HS+# Usage Behavior Low Mobility Old Accounts High # FET ISP Users Medium Mobility High SMS WAP • Loyalty Indicators • Phone to contact Friends Family Decision Drivers Small Outbound Sphere •Churn Shield Index: • They own a phone to contact friends family International Calls • Elevated Inbound Seconds Medium Age Old Friend Family Mobile Post Paid Medium Post Paid Young High # IVR Calls •Churn Triggers: High Bills Comments • Price sensitive • Elevated Positive trend in Inbound Old Accounts Only 6.7% Inbound Age Business Man 8.8% Business Man 8.9% High # FET ISP Users Competitive Scenario Seconds • They consider reputation, call quality, attractive ads., tariff/charging method and VAS 7.1% 7 1% Old Accounts • P t churn reasons: Coverage, Call quality. Past h C C ll lit • Elevated Outbound Seconds availability. Volatile Low Usage • Relative Elevated replication with KG Very High Stable Usage • Strong Positive trend in Outbound Work Pattern Short Calls Young • Relative Elevated churn intension for TCC • High Declared Loyalty Seconds Channels Preferences Low Mobility No Mobile Second Line Classical Classical High Usage High VAS Utilization • Elevated International Call 11.8% Inbound Outbound Social • Internet for customer service Small Outbound Sphere 7.0% 5.7% Freshman Long Calls Demographics • Low Inbound and Outbound Volatility • No predominance of peaking time over • Specialized Telecom Stores Medium Age Old 7.9% Work Night Pattern • Average Age: 27 High Mobility off peak • 65% Male Low Usage High WAP • 75% single 63% living with parents • Elevated Mobility Media Activities International Calls • Outbound Sphere of Influence High Inbound Rate Pre Paid Ghost Pre Paid Teenager Young • 46% completed the High School • Shopping TV 20.0% Eventual Low Style Phase High # IVR Calls • Medium Inbound Rate Work Pattern • 23% Students, 16% Store Sales 13% Laborer • Relative Elevated Dan Chen News User 5.1% Out High# FET ISP Users • High Outbound Call Duration Short Calls 7.0% 3.6% • Payment Type: 69% Post Paid, New Accounts • Relative Elevated Japanese TV series, Overseas • Elevated WAP utilization Low Mobility High Usage and local Variety Shows penetration. Small Outbound Sphere Young Internet Profile • Elevated number of calls to call center • High Utilization of many VAS High VAS Utilization • Percentage of FET ISP users is 15% including Handset Profile Eventual Very Low Usage Long Calls • Percentage of WAP user is 1% •Voice Mail, SMS, Fun Master • Brand Sensitive. Pre Paid Concentration Eventual Low Usage Volatile Usage High Negative Slope • Internet users at home with email and job related • Relative Elevated Nokia penetration. Pre Paid Concentration •SONG Very Small Outbound Sphere Pre Paid Concentration High Volatility searches. • Small handset preference. Very Small Mobility Very Small Outbound Sphere •VOGO Youngest Segment High # IVR Calls Medium Age Very Small Mobility •WAP Data Fax High VAS Utilization International Calls High Inbound Rate VOGO Sources: High Inbound Rate Bold Italic Font: FET Data Warehouse Normal Font: FET Market Survey Source: FET DW Executive Summary Macro Segments Common Sense Groups Macro Segments Extended Behavior Segments Friend Family Mobile Post Paid Medium Post Paid Young Friend Family Mobile Post Paid Medium Post Paid Young Common Sense usinessmen Only Inbound Age Business Man Business Man Only Inbound Age Business Man Business Man High Usage Social Freshman 6.7% 8.8% 8.9% 6.7% 8.8% 8.9% 7.1% 7.1% Groups No Mobile Secon Line essmen PP Eventual Low Users Friends Family Only No Mobile Second Line Classical Classical High Usage No Mobile Second Line Classical Classical High Usage 11.8% Inbound Outbound Social 11.8% Inbound Outbound Social ound 7.0% 5.7% Freshman 7.0% 5.7% Freshman Business ound 7.9% 7.9% Young Phase Out und Friend Family Mobile Post Paid Medium Post Paid Young ost yle Inbound Age Business Man Business Man nd Only O F Classical Outbo y Pre Paid Teenager Young 6.7% 8.8% 8.9% Pre Paid Teenager Young Pre Paid Gho Pre Paid Ghost Pre Paid Ghost RG Young Busine Mobile Inbou Teenager Sty w Classical Inbo Eventual Low E t lL Style St l Phase Ph RG Medium Age Bu 20 0% 20.0% E t lL Eventual Low St l Style Ph Phase 7.1% 20.0% 20 0% User 5.1% Out User 5.1% Out 7.0% 3.6% 7.0% 3.6% Women No Mobile Second Line Classical Classical High Usage 11.8% Inbound Outbound Social 7.0% 5.7% Freshman Friend Family Mobile Post Paid Medium Post Paid Young 7.9% Friend Family Mobile Post Paid Medium Post Paid Young New Generation Only Inbound Age Business Man Business Man Only Inbound Age Business Man Business Man 6.7% 8.8% 8.9% 6.7% 8.8% 8.9% 7.1% Pre Paid Ghost Pre Paid Teenager Young 7.1% No Mobile Second Line Classical Classical High Usage 20.0% Eventual Low User 7.0% Style 5.1% Phase Out 3.6% No Mobile Second Line Classical Classical High Usage Senior 11.8% Inbound Outbound Social 11.8% Inbound Outbound Social 7.0% 5.7% Freshman 7.0% 5.7% Freshman Private 7.9% 7.9% Pre Paid Ghost Pre Paid Teenager Young Pre Paid Ghost Pre Paid Teenager Young 20.0% Eventual Low Style Phase 20.0% Eventual Low Style Phase User 5.1% Out User 5.1% Out 7.0% 3.6% 7.0% 3.6% Key Components Controls, Compliance and Quantification • MAPPING MAPPING MAPPING © 2011 Rob Mattison www.ra-academy.org 345 of 364
- 381. Revenue Assurance Foundations RAF105: Profit Foundations The WAR Framework The Conflict • There is a MAJOR built in conflict associated with the targeting of any marketing activity THE WAR Framework • The goals that people set for market behavior are actually OPPOSITIONAL IN NATURE WAR Framework : • In other words, you cannot especially have For Tracking Marketing Operations EVERYTHING YOU WANT Churn Less (Loose Revenue Customers) C t ) Maximize Reduce Revenue Churn (Raise Rate) This Conflict • Is an inherent part of marketing • EVERY CAMPAIGN, EVERY PRICE, Increase New EVERY ACTIVITY Customers C t Reduce Rates (Lower • Will benefit one objective Revenue) • While • Hurting another © 2011 Rob Mattison www.ra-academy.org 346 of 364
- 382. Revenue Assurance Foundations RAF105: Profit Foundations The WAR Framework The WAR Framework How Can You Win? WAR Cockpit – How Models and KPI’s work together • You’ve got to Wallet Share Acquisition Retention • Take all aspects into account every time • Measure all factors continuously • At least then you understand the “full •ARPU , APPU •Market Share , Winback •AVG. Account Tenure Rate impact” or an activity •Customer Complexity •Customer Base Growth •Voluntary/Involuntary Churn Rate •Add-on Models •Direct Mapping •Churn Filtering •Bundling Models •Indirect Mapping •Vol. Inv. Churn Pred. Extended Behavioral Segmentation Model Customer Value Function Revenue From Sales CAPEX OPEX (Books) (Books) CAPEX OPEX (Books) (Books) Shadow Shadow Investment CAPEX Market Money Capacity Capacity Shadow Shadow CAPEX Market Capacity Capacity Expense Expense Payment Payment $100 Revenue Revenue From From $50 Sales Sales Debt Debt Payback $100 Payback CAPEX CAPEX OPEX (Books) OPEX (Books) (Books) (Books) Investment Investor Investment Investor Money Contribution Payback Money Contribution Payback To To Shadow Capacity $100 Shadow Capacity $50 Additional Additional Additional Additional Capacity Capacity Capacity Capacity Shadow Shadow Shadow Shadow CAPEX Market CAPEX Market Capacity Capacity Capacity Capacity © 2011 Rob Mattison www.ra-academy.org 347 of 364
- 383. Revenue Assurance Foundations RAF105: Profit Foundations The WAR Framework The new formula Reduce cost (Opex) = Increase profit Profit = Revenue – (Capex + Opex) Price Fixed • ARPU • Capital Constrains Quality Fixed • # Competitors • Exposure of UMTS / Risk Service S i Level l Fixed i d • Utilizations • Debt Alternatives None • Subscriber stealing Direct relationship 1. Capital Stable between capacity 2. Technology-hit temporary limits and Revenue Demand Capex 3. Market Stable (Network (profit) Capacity) Revenue IS NOW a dependent variable New Model: Capacity Optimization New Model: Capacity Optimization Model 700 millons Model Advertising Price Variable Revenue Quality Variable Goes Up Expenses Goes Up More Reduce Call Server Level Variable Good !! Profit Center S.Level by Alternatives Many Bad !! Reduce the 5% in $2 i Bad !!! Good !!! demand millon Expenses Revenue Goes Goes The only independent variable Down Down was Capacity, Prices, Quality, Service Level were set Capex Capex Demand Opex Demand Opex (Network (Network Capacity) curve Investment curve Investment Capacity) s s © 2011 Rob Mattison www.ra-academy.org 348 of 364
- 384. Revenue Assurance Foundations RAF105: Profit Foundations Rate and Bundling Assurance What is Rate and Bundling Rate and Bundling Assurance Rate and Bundling Assurance? Assurance • The process assuring that the prices set for products and bundles generates a positive revenue impact Why Do Rate And Bundle Where are rate and bundle Rate and Bundling Assurance Analysis ? Rate and Bundling Assurance assurance applied? • People assume that when the rate plans • New Product Development – where there is no history or protocol to follow and bundles are proposed that there will • New Rate Plans – when it is discovered that the be a positive revenue impact current models are inadequate (or it is • In many situations, this does not happen y pp discovered that no models are used at all) – Especially critical when VOLUME OF BUSINESS because: assumptions are critical – Erroneous assumptions used to build the rate – Especially critical when assumptions are / bundle pricing model PREDATORY in nature – Unanticipated market responses undermine • Bundling – especially complex when bundles involve : the assumptions of the model – Subsidy logic – The original pricing model is flawed – Volume / Predatory Assumptions in order to make them work – Revenue recognition vs expense accounting Rate and Bundling Assurance Rate and Bundling Assurance Cases - Cannibalization Cases – Subsidy Flip • Program Cannibalization – the new rate • Sales program which brings in 1 million plan causes large numbers of customers new subscribers with ARPU of $200 / yr from high value rate plans to shift to the lower plan with no predation and subsidized handset worth $400. accomplished (internal predation) • Sales program which subsidizes 3G p g • Channel Cannibalization – Sales network devices on the assumption of programs that allow salespeople to 500 minutes/month (breakeven) and a harvest existing customers in exchange for a commission with no resultant result of only 100 minutes/month (net change in “face revenue” or an actual loss on each “deal”) reduction in “face revenue” along with the commission pay out © 2011 Rob Mattison www.ra-academy.org 349 of 364
- 385. Revenue Assurance Foundations RAF105: Profit Foundations Rate and Bundling Assurance Cases – Support /Training Rate and Bundling Assurance Rate and Bundling Assurance Cases – Capacity Shortfall shortfall • ADSL Launch in US • Mexico – release of ADSL “kits” with – Offer what can’t be delivered PC / ADSL Modem to millions of – Cost of infrastructure upgrade far higher than customers expected = negative margin program – Failure of call center to support • Special rates for holidays – Market response much higher than – “Backfill solution” the creation of an anticipated ADSL support team – Net result = over commitment of capacity – Cost of Sale – Support (COSS) higher resulting in a net loss on utilization (and than original price (major repricing customer good will) strategy required) Rate and Bundling Assurance Rate Plan Analysis Rate and Bundling Assurance Rating Models • It starts with the rate plan development • In some telcos (mostly the larger, model – A mathematical, logical and operational older and more conservatively run), model which identifies all of the assumptions there is a clear formal process for associated with the proposed rate plan – Provides the developer with a structure and the development proposal and development, format which makes it easy to communicate submission of a rate plan to management: • All facets of the proposed plan – This process includes assuring that: • All facts required • Market sizing and usage forecasts are – In other words, the model should provide management with a single document which correct spells out exactly what the assumptions are • Capacity availability has been factored in about the plan (in terms of assumptions, expectations, risks and likely scenarios) Rate and Bundling Assurance Rate and Bundling Assurance Rating Approval Process Component Parts • 1. Checklist – all things to be considered in the • In these more conservative development of the rating (bundling) model environments • 2. Research and quantification – the person preparing the model will need to do an – There will be sign off from : appropriate level of research in order to give • Regulatory credible answers to the questions asked by the q y model • Marketing • 3. Sign offs – an approval process which gives • Network all parties involved the chance to review and approve • Finance • 4. Ra should be (at a minimum) one of the sign – For each proposed plan offs and in some cases – the sponsor and manager of the process © 2011 Rob Mattison www.ra-academy.org 350 of 364
- 386. Revenue Assurance Foundations RAF105: Profit Foundations Rate and Bundling Assurance Rate and Bundling Assurance Rate and Bundling Assurance Model Components • Rate Plan (Bundle) Description: • Capacity Forecast – Capacity – Explaining what the rate plan is Requirements (Minutes/Erlangs) of • Rationalization – Why has this rate network switch activity plan (or bundle) been developed • Capacity Sufficiency – Verify the • Delivery Explanation – if channels capacity will be there outside of the “standard channels” • CAPEX Requirement – will any new will be required to CAPEX expenditure be required (detail0 Rate and Bundling Assurance Rate and Bundling Assurance Assumptions about • Sales Forecast – How many sign • How much you will sell ups, how much revenue expected • Average customer usage (SHOW THE NUMBERS) • Sales/Marketing Costs • Marketing Expense Estimates • Infrastructure costs • Customer Support Expense Estimates • Have a huge impact on the revenue • Sales Channel Expense Estimates Models become more Rate and Bundling Assurance Rate and Bundling Assurance Revenue Realization complex with bundles • Assumptions regarding bundles can • IFRS/GAAP – Your organization include: – More complex cost of sales (channel • Is the cost of equipment sold to the expenses, channel training, inventory customer (or leased) as part of a bundle management) ) an expense (accounted for at the end of – More complex breakeven (especially the year) or a Cost of Goods sold (in with subsidy) other words, must the money for the – Must understand revenue realization subsidy be captured before any revenue perspective (what, when , where and is realized) how to realize in subsidized case) © 2011 Rob Mattison www.ra-academy.org 351 of 364
- 387. Revenue Assurance Foundations RAF105: Profit Foundations Rate and Bundling Assurance Rate and Bundling Assurance Rate and Bundling Assurance Revenue for Subsidized Deals • Whether you can realize it on ‘the 3g Modem books’ or not is only part of the Cost 200 equation Retail 450 Sell to customer • How do you make sure that the (free, 100,200,300,450) program is not running in the red? Rate Plan / Bundle Rate and Bundling Assurance Rate and Bundling Assurance Analysis Steps Device Forecast # Forecast # NetCost / Net minutes – Revenue @ Units Revenue 1. Review the model for soundness and per month $1 per MB Sold completeness No Device 100MB $100 Free 10,000MB 10 000MB $10,000 $10 000 If no model exists, then you need to develop one $100 5,000MB $200 2500 MB $300 500MB $450 250MB Rate and Bundling Assurance Rate and Bundling Assurance 2. Review/ Verify all assumptions Risk Quantification 1. Exchange Analysis a. Are contractual statements correct • The key to the risk in these cases b. Are service level encumbrances included will be: c. Is the company protected against supplier failure 2. Process Analysis – Headcount forecast a. Verify the Cost of Sales and Marketing Costs against y g g known marketing and sales channel activities – Utilization forecast (per customer) b. Verify capacity of sales channels 3. Systems Analysis a. Verify Capacity Reports b. Verify activation / provisioning capabilities c. Verify Rating Update (change management) 4. Numerical Analysis a. Verify modeling assumptions © 2011 Rob Mattison www.ra-academy.org 352 of 364
- 388. Revenue Assurance Foundations RAF105: Profit Foundations Rate and Bundling Assurance Rate and Bundling Assurance Bundle Each model # Customers Customer Usage Price Revenue Network Cost/Capacity Sales Cost/Capacity Forecast Low Low Rate1 Low Low • Should include multiple scenarios Medium Medium Rate2 Fixed Cost Medium • Probabilities should be assigned to each scenario High High Rate3 Variable Cost High • W i ht d average ( Weighted (most lik l ) t likely) Medium forecast should be generated Fixed Variable • Management sets appetite for risk High Fixed Variable © 2011 Rob Mattison www.ra-academy.org 353 of 364
- 389. Revenue Assurance Foundations RAF105: Profit Foundations Telco Churn Management Churn: Slightly Better View My customers are leaving. Telco Churn Management Predict which ones will leave leave. Lower the prices only for them. Principles Guidelines They will stay. Churn: Operational Principles by Rob Mattison 2 What is Wrong with this Approach? The Problem: It’s not nas Simple as It seems Too expensive – too much waste Churn is a complex problem There are many causes Doesn t Doesn’t work very well There are many impacts You need to understand the entire You remain “blind” to root causes and true situation to evaluate and react to the churn market weaknesses…It will get appropriately progressively worse The biggest mistake : Oversimplification Churn: Operational Principles Churn: Operational Principles by Rob Mattison 3 by Rob Mattison 4 Gsm CYCLE Numbe of Users d ? years e er c a b Time 1983 1987 year ? Churn: Operational Principles by Rob Mattison 5 © 2011 Rob Mattison www.ra-academy.org 354 of 364
- 390. Revenue Assurance Foundations RAF105: Profit Foundations Telco Churn Management Rule #1 Rule #2 Churn will usually only occur when… Churn for you is acquisition for somebody else and vice versa Customer is dissatisfied An alternative is available It costs money to take your customer away Competitor is willing to invest money in creating a churn event It costs money to get the customer back Churn: Operational Principles Churn: Operational Principles by Rob Mattison 7 by Rob Mattison 8 Rule #3 Rule #4 When conditions are right for churn, it will Price-based churn campaigns create a cost you money no matter what you do! downward spiral that undermines your margins while ultimately doing little to effect market Your only choices are to decide where and position iti how the cost will occur As long as you are able and willing to meet every Lost revenue price discount a competitor offers, you can maintain your market share so long as all other conditions are Money invested in churn prevention equal (quality, coverage, customer service, image, Money invested in re-acquisition etc.) Churn: Operational Principles Churn: Operational Principles by Rob Mattison 9 by Rob Mattison 10 Residential Bill Size Distribution Issues of Selection Mode (peak) Median (mid point) F Keep as many customers as possible r Mean (average) e Keep as many of the good customers as possible q (Customer Valuation) u e Keep the customers at what cost? n At what point is it no longer worthwhile to keep a c customer? y You must be more precise in your treatment of customers (Customer Individuation) Bill Size Churn: Operational Principles by Rob Mattison 11 Churn: Operational Principles by Rob Mattison 12 © 2011 Rob Mattison www.ra-academy.org 355 of 364
- 391. Revenue Assurance Foundations RAF105: Profit Foundations Telco Churn Management Issues of Timing Churn Question Downward price pressure is inevitable When is the right moment to lower prices or add features/benefits? How do I manage the risk of churn for each of my Too soon – loss of revenue customers against the revenue they represent and the cost to retain them? And how do I consistently make the Too late – loss of customer optimum decision based on current conditions? confidence How do I do this with a large, complex, multi-dimensional organization (Advertising, Marketing, Sales, Channels, Really too late – Customer Service, Billing, Finance etc.) where each party plays a role in the overall decision regarding the optimum loss of customer solution? Churn: Operational Principles Churn: Operational Principles by Rob Mattison 13 by Rob Mattison 14 For the Identified Churn Evaluation Formula Timeframe in Question ( R ) – Risk of the customer churning This month, this quarter, this year? ( T ) – Time – The time frame being examined ( V ) – Value – The current and future Value Risk Churn value of the customer Of X Of = Exposure Customer Churn ( I ) – Investment – The money we will spend to prevent the churn Churn: Operational Principles Churn: Operational Principles by Rob Mattison 15 by Rob Mattison 16 For the Identified Churn Artifacts Timeframe in Question Predictive Models This month, this quarter, this year? Propensity Models Net Indexes and Scores Value f V l of Value Of - Cost C t Of = Customer Report Formats Customer Treatment After Churn Treatment Churn: Operational Principles by Rob Mattison 17 © 2011 Rob Mattison www.ra-academy.org 356 of 364
- 392. Revenue Assurance Foundations RAF105: Profit Foundations Telco Churn Management Churn Prediction Churn Prediction Models Limitations Difficult to build Historical Precedent Required Difficult to interpret (can be) Stability of Causal Factors Tendency to “skip” the “real work” and skip real work Identification of Causal Factors lean on models too much Reasons might be overlooked Strength Mathematical Confidence Alternative artifacts for risk Customer Churn Index Technique Customer Churn Index Create a churn likelihood model for each Rely upon quantitative factors to help develop customer type a churn indication Define which factors will most likely impact loyalty or indicate dissatisfaction i i di t di ti f ti ie. Calls to call center Dropped calls Certain traffic patterns Certain call patterns (call forward to alternate number) Create a score for each customer Use the CCI score to drive your decision making CCI Technique (+,-) Critical Care Model Strengths Don’t need history Can leverage surveys and other quantitative Assumes 3 timeframes for the tools treatment of “likelihood to churn” Can be applied to entire population Preventative (circumvent churn reasons) Less rigid modeling requirements Urgent (churn is likely) Weaknesses Emergency (churn is imminent) Not as mathematically tight © 2011 Rob Mattison www.ra-academy.org 357 of 364
- 393. Revenue Assurance Foundations RAF105: Profit Foundations Telco Churn Management Preventive Treatments Preventive Treatments Vitamins and Exercise Churn Shield Index (measures critical churn likelihood for major segments of customer base) Advertising Customer Care Loyalty Group Network (Ads to (Selective (IF club) Maintenance address treatment reputation of customers) and image issues Retentionizing the organization – related to Making everyone sensitive to churn issues churn) WAR – retention KPIs Urgent Treatments Urgent Treatments Medicine Antibiotics Therapy Churn Prediction Models Customer Loyalty Wallet Care Campaigns Share Campaigns Emergency Treatments Emergency Treatments Surgery Churn Triggers (cancellation, (cancellation churn behavior, “last chance” negotiations) “Come Back” Reacquisition “Last Chance” SWAT Team Campaigns SWAT Team (sales/loyalty) © 2011 Rob Mattison www.ra-academy.org 358 of 364
- 394. Revenue Assurance Foundations RAF105: Profit Foundations Intro to Product Development To win you must Build the right products Built products the right way BOTH ARE CRITICAL Winning at New Product Development Keys to Winning New Product ROI Speed of development ROI – 96.9 % Yields competitive advantage Average payback – 2.49 years Yields profit Average market share – 47.3 % Yields fewer surprises (control and predictability) High odds of failure Many failures for a few wins For every 7 concepts – 1 succeeds High For every 4 development projects – 1 becomes a market Quality success New Product Process New Product Performance New Commitment Product Of Strategy Resources © 2011 Rob Mattison www.ra-academy.org 359 of 364
- 395. Revenue Assurance Foundations RAF105: Profit Foundations Intro to Product Development The PDMA (Product Development and PDMA best practices Management Assoc) Tools and techniques 1. Voice of the customer – in depth , one on one, situation based customer interviews to uncover needs 2. customer site visits Involve customers directly at the earliest stages 3. concept testing: potential users provide qualitative or quantitative reactions to concepts p q p prior to Marketers and Engineers understand the difference development between requirements and features and use both 4. beta site testing About 50% formal / 50% informal processes Risk Management Risk Management Techniques Lower the stakes If risk is high, keep stakes low As uncertainties decrease, stakes can increase Potential Payoffs Incremental-ize the decision process to minimize stakes and risk Amount There should never be an all-or-nothing decision to be made At Be willing to pay to reduce the risk Potential RISK Stake Losses LEVEL Build walk away options into the plan Unknowns Organizing the Process Create a series of checkpoints that allow you to re- evaluate investment/risk positions. Each checkpoint is a go/no go decision point Uncertainty Never allow the investments to get out of balance with the (going down) risks The purpose of each phase is to reduce risk Amount at stake (going up) © 2011 Rob Mattison www.ra-academy.org 360 of 364
- 396. Revenue Assurance Foundations RAF105: Profit Foundations Intro to Product Development process imperatives 1. Systematic Dream-Works 1 2. Designed to manage risk Gauntlet 1 3. Clear, multi-step go/no go checkpoints Case-Maker 1 4. Parallel processing to increase throughput without Build-It 1 reducing quality Test-It 1 5. Market driven input required at each step 6. Goal : Superior and Differentiated products Launch-It 1 Manage-It 1 Be specific about where you want Arena Mapping new products to be Good High Bets Risk Reward Bets PRODUCTS Voice Data Portal SMS d Teen X MARKETS SOHO X Corp. Conservative No Bets Bets Retired Female X RISK Techniques for generating ideas Objectives of “voice of customer” analysis 1. Value chain analysis (your own) Identify 2. Value chain analysis (your customers) 3. Mapping shift in industry drivers (industry value chain) What are the problems that the customer has that require a 4. Market and industry trend analysis solution? 5. Profit pool and market maps** Unmet needs? 6. SWOT analysis 7. Brainstorming Specific preferences for specific products. 8. Technology driven brainstorming Pinpoint areas of like/dislike. 9. Market driven brainstorming 10. Voice of the customer surveys ID order winning criteria 11. Best customer direction Understand customers economics of sale (how buy) use, 12. Suggestion b 12 S ti box scale(how many will they buy), elasticity (h l (h ill th b ) l ti it (how sensitive t price) iti to i ) 13. Skunk works and plasticity (how flexible in purchasing). 14. Product brainstorming sessions (random participation) 15. Create idea collection job description 16. Plussing – get someone from another department to improve the idea 17. Trade shows/trade publications 18. Suppliers 19. Telcos in other markets © 2011 Rob Mattison www.ra-academy.org 361 of 364
- 397. Revenue Assurance Foundations RAF105: Profit Foundations RA Product Development Product Development Product Development Why RA? and RA • Unmanaged new product development has resulted in a lot of major product launch disasters in the past few years • As with other areas, older, more conservative telco’s tend to have an abundance of procedure, while newer ones have a great lack RA is involved in several Product Development domains Product Development New Products • Pricing, Rating and Bundling (see earlier • Bring new paradigms section) • New issues • Architectural Alignment – Assuring that the new p g product will “fit” into the companies current billing (pre and postpaid), • New products will OFTEN SLA Management , activation/provisioning, REQUIRE major new infrastructure revenue assurance and fraud management development program • New product rollout – Change • However, that does not mean that it Management Procedures has to be built as an isolated case Product Development Product Development Rework Costs RA Involvement • Revenue Architecture Alignment – • Focuses on: – How will it be sold? communicated and included EARLY – How will it be activated/provisioned? in a new product deployment can – How will the customer be registered? save Millions of dollars in – How will it be rated and loaded? – How CDR’s be generated and processed? development costs, as well as – How will the IN – SS7 interface be millions in lost revenues while the implemented problems get fixed • What change management will be imposed around all of these areas so that management is assured that accurate billing will happen? © 2011 Rob Mattison www.ra-academy.org 362 of 364
- 398. Revenue Assurance Foundations RAF105: Profit Foundations RA Product Development Each company has a unique Product Development Product Development What is it? set of assumptions • Every organization has a core, • For example underlying assumption about how – All postpaid products will generate billing, revenue management , fraud CDR’s detection and revenue assurance – All CDR s will be mediated CDR’s will be done – Copies of all CDR’s will be forwarded • This combination of systems, to the Fraud management system operations and organizational – Prepaid billing is backed up by a CDR assumptions is referred to as the for reconciliation purposes Revenue Management Architecture When a new product is Product Development developed Product Development For example • Product developers (marketing and • Implementation of GPRS? engineering) could be ignorant of – Do you generate a CDR? the environment, the rules, the – How, when where? reasons and the rationale for them – How is it mediated? • It is critical that these rules, – Where are the backups? constraints and guidelines be – How is it assured? included in the product development process Revenue at Risk – Product Development Product Development Two Categories of Products Quantification 1. Products which align well with the • To calculate revenue at risk current infrastructure (ie new rate – Generate a forecast of sales numbers plan) (high, medium, low) 2. 2 Products which incorporate new – Assign risks based upon the factors infrastructure components reviewed requiring a re-think of the – Be sure to include price/bundle risk analysis architectural assumptions © 2011 Rob Mattison www.ra-academy.org 363 of 364
- 399. Revenue Assurance Foundations RAF105: Profit Foundations RA Product Development Controls for New Product Product Development Product Development In this case Development • RA is more a consultant than an • Price/Rate Plan Controls – Documentation of price/margin assumptions auditor – Tracking of results • The objective is to smooth new – Alarm when outside of bounds (up or down) product rollout and maximize • A hit t l Ali Architectural Alignment C t l t Controls revenue potential – Recommendations for corrections to design – Documentation of risks and consequences • Change Management – Assure that all Revenue Management, Fraud and RA change management procedures are followed New Product Change Product Development Management • New Switches (Switch Procedures) • New Partners (Partner Procedures) • New Channels (Channel Procedures) • Revenue management chain “burn in” burn in – CDR Generation / IN Update – Mediation – Billing – FMS activity – Other ? © 2011 Rob Mattison www.ra-academy.org 364 of 364