Telcos could look to IoT to recover huge losses

Telcos could look to IoT to recover huge losses

A new report reveals that the telecoms industry is losing billions of dollars in uncollected revenues and fraud, but there is now the suggestion that the Internet of Things (IoT) could help telcos be more profitable in future.

The results of Neural Technologies‘ Telecoms Risk Management Global Survey 2016 have been announced, with the global telecoms industry about to face an estimated average loss of 13 percent – the result of both fraud and uncollected revenue.

With over 100 expert participants from around the world, results from the survey showed that whilst the reasons for loss were similar across the board, revenue decrease will vary by region. For example, Central Asia is expected to see 17 percent losses compared to a relatively modest decrease of 8 percent in Western Europe.

The prevalence of missed revenues, through issues such as sub-optimal call routing, poor processes and incorrect data usage, are expected to account for a global loss of around $139 billion.

Network operators, of which 43 percent are expecting further losses over the next 12 months, will be looking to harness the potential of IoT devices to make up for lost revenue. But it probably won’t be as simple as that.

Robin Kent, director of European operations at Adax, an industry leader in telecom network infrastructure, argues that operators facing a surge in traffic aren’t adequately prepared for the future.

“Network operators that are unprepared will be faced with a potentially severe ‘bottleneck’ in their network. There are basic issues with Diameter signalling, the protocol that enables communication among network elements, that threaten to cause mass disruption, which could lead to a diminished quality of experience for network subscribers and ultimately operator revenue loss”.

As well as being unprepared in terms of network architecture, Kent points out that “Some unanswered questions also remain as to whether IoT devices that require network connectivity have the necessary security protection that is required of traditional devices accessing the network.”

Chief commercial officer at Neural Technologies, Luke Taylor, added that “The telecoms sector is significantly expanding its services around the world with faster broadband, 4G/5G roll-out and more connected devices. Our survey reveals that new services create both new revenue opportunities and risks for operators and the challenge is to secure the upside and minimise the losses.”