By MAE KOWALKE
TMCnet Associate Editor for Channels

 

Every year, telecommunications carriers lose out on hundreds of millions of dollars in potential revenue.

 

How can this be? The problem is called revenue leakage, and refers to cases where service providers use, but do not pay for, carrier networks to route their traffic.

 

“This is a significant problem for carriers,” Steve Bannerman, Vice President of Marketing at Narus, recently told TMCnet.com.

 

A recent report from Juniper Research says revenue leakage is increasing, and blames the problem partially on the introduction of new technologies such as 3G and IP Multimedia Subsystems (IMS).

 

“Revenue leakages can take place throughout the revenue life cycle, starting with product development and sales, to provisioning of customers, network operation through to invoicing,” Arun Dehiri, Analyst at Juniper Research, writes in the report.

 

So how can carriers ensure that they are collecting all available revenue?

 

Any successful solution will have two main components, Bannerman told TMCnet.com. First, technology is needed to monitor and manage network traffic. Second, a business model is needed to collect revenue from network traffic.

 

Bannerman's company, Narus, today is announcing two strategic partnerships in its quest to solve the problem of revenue leakage.

 

On the technology side, Narus announces it has partnered with IBM to create a reference platform that can monitor, analyze, normalize and correlate IP traffic at high speeds.

 

Developing the technology solves half the problem, Bannerman said, but implementing a real world solution to revenue leakage required partnering with a telecom company.

 

“This is not something you can go into your labs and build alone,” Bannerman pointed out. “You need real, live problems to solve.”

 

To address the business side of the problem, Narus and IBM announced they have partnered with Brazil Telecom to deploy the new reference platform. 

 

Brazil Telecom and four other major telecoms in the country are taking a leadership position in coming up with a business-end solution to revenue leakage, Bannerman said.

 

The five telecoms are working together to come up with a cooperative business arrangement that enables effective sharing of network resources without losing revenue.

 

Brazil Telecom is the first carrier to pilot Narus and IBM’s reference platform. The telecom was chosen because it has made the most progress in developing a business-end solution to revenue leakage, Bannerman said.

 

The Narus-IBM platform--which uses off-the-shelf IBM blade center hardware and a combination of software developed by both companies--can be used for any IP-based service, Bannerman told TMCnet.com.

 

The platform is also scalable. A carrier can install it to manage VoIP traffic on its networks, for example, and later expand monitoring to include IPTV services as well.

 

Bannerman said he expects the Narus-IBM-Brazil Telecom partnership will provide a blueprint that can be used by the telecom industry in other parts of the world to address revenue leakage.