Implications of Sarbanes-Oxley Act on telecom sector

In recent years, telecommunications companies have been mandated to comply with an increasing number of regulations. The Sarbanes-Oxley Act poses another challenge to the industry along with the opportunities it presents. This act aims at driving increased integrity and accountability in financial reporting activities of public companies. The act covers every process that has the potential to roll up to the financial statement.

The challenge faced by the industry in order to comply with this act stems from two factors:
1)Historically, the nature of carrier operations has been such that the different processes with implications on the financial statement are owned and driven by different departments.
2)The data-sets generated by these processes are always huge; making reconciliation an effort-intensive task.

The key challenge for the industry is to evolve processes and deploy solutions that make it simpler and quicker to reconcile data across multiple silos and maintain the integrity of various data sets. Data Integrity across multiple silos will be the key to Financial Integrity.

Another challenge is to deploy applications that help to evolve consistent processes and controls. The aim of these deployments should be to increase confidence in externally reported results. Typically, a Telecom Service Provider’s Mediation & Billing processes, Network Inventory Data Management, Customer Refunds and Sales Process are fundamental to its financial figures and will need a compliance-check.

While Sarbanes-Oxley Act compliance is a major challenge, telecommunications companies can use the mandates of the Sarbanes-Oxley Act to develop a better competitive position. They benefit immensely by establishing better management controls and implementing support systems to improve their business. The act acts as a catalyst for data analytics solutions and provides much-needed thrust to Applications that could help Telecommunication companies plug the revenue leakage points in Service Providers’ setup and look at maximizing their revenue. In this revamp process, the accrued savings could well compensate the investments made towards achieving compliance. The success depends upon the right management focus and implementation strategy.