Cash on the line: Telecom operators and working capital management

Driving working capital excellence

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Telecommunications operators have made significant strides in increasing working capital (WC) efficiency, albeit with large differences in the degree and speed with which each one of them was able to deliver these efficiencies. The most significant of these initiatives include:

  • Building cash into product design and customer acquisition strategies
  • More effective organizational structure of collections and dispute management
  • Increase in direct-debit penetration and change in advanced billing
  • Enhancement of customer acquisition and risk management processes
  • Tightening up controls around terms and effective terms
  • Unification and harmonization of billing processes to accelerate invoice production
  • Consolidation and control of spend
  • More effective management of payment terms for suppliers, including renegotiation of terms
  • Improvement in forecasting processes, working more closely with telecommunications equipment suppliers and content providers
  • Introduction of vendor-managed inventory techniques
  • More effective management of interconnection agreements
  • Increased use of supply chain financing solution
  • Development of new partnerships models, embracing revenue-sharing, provisioning, pricing and billing
  • Tracking and monitoring of WC metrics and linking compensation to these metrics