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How Communication Service Providers Can Stop Revenue Leakage

Automated billing platforms and real-time reporting create billing transparency.

With technology convergence meeting increased customer demand, many communications service providers (CSPs) are seeing a wave of unprecedented growth. New lines of business for CSPs can create an opportunity for recurring revenue streams. That’s why it’s important to talk about how to stop revenue leakage.

There is an industrywide shift taking place, with less emphasis on IT value-added services and more on subscription-based revenue models for leveraging emerging technologies like IoT and cloud communications services. Reflecting the size of this opportunity, some reports show that the unified communications-as-a-service (UCaaS) market will be worth nearly $80 billion by 2024. This presents a golden chance for scale, but only if CSPs are able to capitalize on the opportunity.

All works out well when providers are able to expand their customer base and convert one-time services into recurring revenue. But sometimes industry growth doesn’t equate to growth of a CSP’s bottom line. Revenue leakage isn’t a new concept but is relevant to understand as a risk. A significant volume and breadth of data sources, driven by sophisticated billing models, mean many internal finance departments will lack the resources and processes to ensure accurate monthly billing of their clients. Drip by drip, these CSPs have leaking bottom lines, despite significant growth opportunities in the market.

The Issue at Hand

Many providers struggle to pinpoint the specific source and total amount of their business’s revenue leakage. Ultimately, this lack of insight affects many companies and even has the potential to impact enterprise-level operations.

One consideration that adds to the complexity of revenue leakage analysis and management is the evolving nature of the unified communications industry. Change is a constant in this space, from the different types of services that customers prefer, to changes in technology driving new tech adoption, to variations in the status of client subscriptions. All of these variables, if not actively managed, can cause a provider’s bottom line to suffer.