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5 Surefire Ways Telcos can Increase Gross Margins

Posted on February 12, 2014 by Su Fan in Blog,Finance & Accounting

Any business will always be concerned with its bottom line. You want to maximize profits and minimize expenses. Check out the five surefire ways for any telco organization to increase gross margins.


1. Optimizing Least Cost Routing (LCR)

If using LCR is one of the strategies to minimize your costs, then you must ask your organization how effective they are in utilizing this tactic. Here are some questions to ask:


  • Are they optimally routing traffic across vendors with cost, quality, and contract commitment in mind?
  • Are they leveraging multiple rate decks?
  • How effectively are bi/multi-lateral swaps between carriers/vendors handled?
  • Are they monitoring the cost/termination performance through near real-time rating of switch CDRs?
  • Are they looking at the reporting on cost performance?
  • Do they have the tools to perform these tasks?

Most importantly, when it comes to utilizing LCR, make sure you are not losing out on quality while working to keep your bottom line intact.


2. Finding New Vendors

Set cost and quality targets for your Carrier account managers to get the best possible costs and routes from their network of vendors. In instances where the carrier is able to send high volumes of traffic, the carrier can use this as a means to leverage for negotiating the absolute best possible cost. If you don’t want to switch vendors, consider renegotiating with your current vendors for better rates. Either way, plenty of vendor options should be available to help minimize your current costs.


3. Recovering the Outstanding Amounts Disputed from Vendors

To improve upon collecting any disputed portions of invoice disputes, you must have solid evidence to substantiate your claims. Here are a couple of good questions to ask your telco audit team:

  • Does your analysis provide sufficient details to substantiate your claims for faster resolutions?
  • Do you have a robust follow-up process with the vendors until all of the disputed amounts are reconciled?
4. Managing Revenue Leakage and Vendor Overcharges

Let’s face it, not everyone is able to prevent revenue leakage 100% of the time. But what helps with minimizing it involves making sure that all CDRs you are being billed for are matched against the CDRs in your internal system. If there are charges on the invoice for CDRs that you aren’t billing your customers for, then correct your billing by incorporating the CDRs into the billing run. The last thing you want is to lose out on revenues from an oversight in the billing process, which is why it is so important to audit invoices and correct any issues you find.


5. Improving the Overall Gross Margin

Even though there isn’t a silver bullet, overall improvements in your gross margin can be made with an analytical approach. Carriers might want to consider recalibrating their processes in terms of LCR management, dispute management and telco audits.

If you take the time to go through the five steps mentioned above, you can be sure that you aren’t shelling out more money than what you should.

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