TEOCO-AIRCOM deal shows how assurance can move back to front

Written by on December 9, 2013 in BillingViews, Guest Blog with 2 Comments

As somebody who likes to analyse the performance of business assurance firms, TEOCO causes me unusual headaches. Their CEO, Atul Jain, routinely insists that TEOCO is not a revenue assurance vendor. And yet, they sell margin assurance products, and cost management products, and revenue management products. They even have a switch-to-bill reconciliation product. But I can understand Atul’s point of view. Partly he is reflecting the fact that TEOCO, with its Virginia headquarters and roots in the North American market, has followed American priorities for business assurance. When European telcos were worrying about the retail bills they sent to customers, American telcos were troubled by the bills they received from other carriers. The validity of their concerns has been repeatedly demonstrated by TEOCO, not least when its employees give legal testimony about the damages caused by traffic pumping. However, I suspect Atul has another motive for playing down the assurance pedigree of TEOCO. Checking bills, whether sent or received, is an archetypal back-office function. In contrast, TEOCO’s strategic path has seen it move towards the frontline for interaction with customers. In telecoms, the ultimate frontline is the network that customers connect to. And TEOCO’s purchase of AIRCOM, experts in RAN design and performance management, shows how adding value by optimizing the front end can be a natural complement to assuring the back end.

Nobody working in assurance could have failed to notice how, in recent years, some quarters have demanded that assurance should be more ‘proactive’. What many failed to notice is that there is something vaguely odd about wanting proactive assurance. The ideal of proactive assurance would be designing systems that are fool-proof. However, it would be peculiar to suggest that assurance practitioners should become designers. In reality, there is an unbroken spectrum of activities that aim to improve performance in a telco, ranging from design and optimization at its most forward-looking end. The controls and audit work performed by most assurance practitioners tends to come at the reactive rear. All these activities can, and should, work harmoniously. The data gathered by reactive activities should feed back into proactive activities at the start, much like a grand Deming PDCA cycle. TEOCO’s investment in network intelligence shows how one supplier is making the necessary connections, placing them ahead of the curve. AIRCOM’s RAN intelligence will feed into TEOCO’s analytics, giving their customers a competitive advantage from better understanding of where there customers are, and what experience they are receiving. This ties back to increasing the monetization of the network, and guiding future network investment to maximize returns.

There are more prosaic motives for the deal. Though the price has not been disclosed, it is safe to assume that TEOCO’s due diligence has identified synergies with AIRCOM’s roughly USD100mn-turnover operation. In particular, AIRCOM has a sizeable team working on international sales, and TEOCO has long desired to increase its penetration in markets outside of North America. The combined company will reportedly boast over 300 CSP customers, served by offices in 15 countries.

To reiterate, I do not wish to dispute TEOCO’s CEO. I can certainly see why and how TEOCO is different to other firms that offer analytics and assurance software. However, Atul’s strategy highlights one possible direction for assurance. TEOCO will tie information about quality of service and location of mobile customers to back-end data like billing. The goal is to give telcos new options for how they differentiate their offerings, and generate revenues. The amounts invested in LTE, and the pressure to cope with customer expectations, underpin the logic of TEOCO’s proposition. They are shifting the focus of analytical value-adding software and data from the back office, to the telco’s frontline. Vendors of ‘proactive’ assurance should take note.

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Eric Priezkalns

About the Author

About the Author: Eric is Editor of Commrisk and is a widely recognized expert on risk management and business assurance, and author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. Eric was Director of Risk Management for Qatar Telecom, and he has worked with a wide range of mobile and fixed-line telcos, as well as advising software developers and system integrators. In the UK, Eric is also known for his critique of billing accuracy regulations. In Qatar, Eric was a founding member of the National Committee for Internet Safety. .

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  1. sk says:

    guess you meant Aircom and not airtel in the later half of the article?

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