Consumer Credit News

Mobile users "leaving a trail of debt"

Unpaid bills and defaulting customers are globally costing mobile
operators around $26 billion a year with around 5% of total billings
being written off annually, a survey of operators around the world
has revealed. This is one of the main findings of research Talgentra
has conducted in conjunction with telecom analysts, Analysys, into
customer revenue management and debt collection at mobile
operators around the world.
The report, Customer Revenue Management and Debt Coliection: a
global survey of telecom operators, also showed that operators
would benefit from the development and use of country-specific
databases of defaulting customers. This would enable operators to
identify persistent "won't pay" defaulters who know that taking legal
action would cost the operators more in legal costs than the amount
due. One of the key reasons identified for the high write-off figures
is that the collection of monies due on unpaid bills often falls
between the responsibilities of different departments within an
operator - which indicates that a cohesive revenue management
strategy is not in place. This uncoordinated approach is directly
affecting the bottom lines of operators.
A spokesman for Analysys, explained: "Traditionally the telecoms
industry has tried to recover monies owed by relying on traditional
mail and phone techniques followed by contract cancellation and
disconnection. This approach is becoming untenable. In
deregulated markets and with mobile phones often replacing fixed
lines, the threat of disconnection is no longer as strong as it was. It
is easier than ever before for customers to switch between
providers, leaving a trail of debt in their wake."
Brian Dewis, CEO of Talgentra, commented: "It is surprising how
many operators are still using obsolete credit management systems.
It seems that revenue management and collection strategies
invariably play second fiddle to the billing process. However,
operators who implement specialist customer revenue management
and collection systems report significantly improved cash flow,
reduced debt write-off, improved productivity and stronger customer
relations - with ROI typically achieved in less than 12 months."

Call for more consumer credit education

With personal debt problems reaching an all time high, R3 has
called on the government to address the problem through the
education system. R3 says that while a start has been made by
introducing finances as an element on the National Curriculum, it

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