Complexity leads to telcos overcharging

In a determined bid to identify and address overcharging in telecommunications, Stratatel (a telecommunications expense management company) has released a discussion paper to suppliers of telecommunications services seeking comment as to how these issues can be overcome.

According to the discussion paper Hidden Overcharging in Telecommunications, overcharging occurs in most bills to organisations.

“Managing expenses, particularly rapidly escalating telecommunications expenses, are a critical activity for every organisation and overcharging is not in the interest of carriers or their customers. That’s why we are seeking comment from both sides of the fence,” said the CEO of Stratatel, Matt Parry.

Gartner Research shows that around 80% of telco bills contain incorrect charges. A case study in the draft paper also demonstrates how a large transport organisation recouped $225,000 after widespread overcharging to the tune of 24%.

The draft paper claims telecommunications contracts are unlike any other contract large organisations have with their suppliers as new data and mobile services become more complex through convergence and collaboration technologies. As a consequence, categories of products and types of expenses are becoming much more difficult to manage.

“Overcharging is rarely the result of carriers intentionally inflating their charges or negligent or incompetent management by the customer organisation,” Parry says.

The complexity of both telco billing and procurement today, often including multiple accounts, hundreds of users and thousand of assets, makes the monitoring of accuracy extremely difficult for both parties and the oversight of error an inevitable consequence.

“... Stratatel is seeking comment from carriers, their customers and indeed our own clients on how overcharging in telecommunications can be addressed.

“When all comments have been received and analysed, we will issue a revised paper designed to engage all stakeholders in overcoming the hidden costs of overcharging in telecommunications, which is imposing a large and unnecessary cost on business,” Parry concluded.