E2-E3/E&WS/Project Kuber

Rev date: 01-04-2011

E2-E3: ENTERPRISE & WHOLESALE

CHAPTER-11
PROJECT KUBER
(Date Of Creation: 01-04-2011)

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E2-E3/E&WS/Project Kuber

Rev date: 01-04-2011

Project Kuber
1.0. Introduction:
It is an accepted industry thumb rule that 80% revenue comes from 20% customers. For
survival of any organization it must be able to meet its operating expenses i.e. by having
sufficient cash in hand. For a telecom operator, this liquidity depends on the billing
promptness and revenue collection. For ensured stream of revenue from customers,
appropriate degree of quality service with after sales service is also must. This chapter
deals with such aspects related to BSNLs customers.
2.0 Lesson plan

Background to Project Kuber

Billing & Collection strategy

2.1.Background to Project Kuber: As on 31/3/08 BSNL had accumulated bad debts of
Rs 4400 crore from landline, mobile and enterprise segments. Bad debt as a percentage of
amount billed for was found to be 3.9% for basic, 4.8% for mobile and 10% for data
circuit. Second month collection efficiency in some circles w/s found to be even less than
50%. System for improving collections before Project Kuber is shown below:
1. Agency Selection

Experience of agencies is proposed to be given increased

focus
Organized bodies or agencies are to be selected for the job
Selection agencies shall be chosen based on their financial
strength capabilities to put in concerted efforts
2. Segmentation
Outstanding accounts need to be segmented based on age,
geography and customer type to decide right and timely
strategy of pursuation
Collection agencies should be given accounts spread over
predetermined, small area
Start the follow up early. Do not wait for two years.
3.Commission structure Commission structure capped at higher percentage to make it
to the market rates.
4. Support & Monitoring Internal BSNL teams need to be created for supporting
collection agencies
Strict review and monitoring

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As part of Project Shikhar, BSNL launched a project titled Kuber to take care of
identified issues.
Collection efficiency was developed on the basis of customer type and age of default
as described below:
Sl
Customer
Typical products
Age
of Collection
segment
outstandings
methodology
1
Retail / small Basic
services/ 3-6 months
Outsource to collection
and
medium CMTS postpaid
6-12 months
agencies. Prioritizing
ticket
size
12-36 months
size.
outstandings
Appoint
different
agencies based on
areas
and age of
outstanding.
In house team for
continuous monitoring
of performance.
2
Enterprise
Basic
services, 3-36 months
Create in house team
(Large
ticket CMTS post paid
for follow up on
size accounts)
Telephone and Data
accounts
circuits
Prioritize follow up on
size and age
Weekly monitoring of
progress
3
Govt
& Basic
services, All outstandings Create in house team
Defence
Telephone and data greater than 3 for follow up on
circuits
months
accounts
Weekly monitoring of
progress
3.0.A four step approach has been decided:
1.
Identification of outstanding accounts and segmentation
2.
Selection of collection agencies and allocation of outstanding accounts
3.
Creation of internal teams and systems
4.
Monitoring and review
3.1. Identification of outstanding accounts and segmentation

Identify outstanding accounts for Basic, CMTS and Data Circuits, b/w 3 months
and 3 years1 old

Segment accounts on the following dimensions

Age: 3-6 months, 6-12 months, 12-24 months, 24-36 months
Size of outstanding: 0-1000 Rs, 1000 20000 Rs, >20000 Rs

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Geography: Areas within SSAs
Customer type: Private, Govt. & Defense

Account size should be determined after clubbing all outstanding bills for a
particular customer

Age should correspond to the age of the latest outstanding bill

SQL queries will be provided for getting this data for DOTSOFT, TRICHUR and
CSMS

Templates are provided for filling in this data, both at segment level and at
individual bill level

Template 1: "Outstanding Accts Private"

Template 2: "Outstanding Accts Govt, Def"

3.2. Selection of collection agencies and allocation of outstanding accounts

Identify collection agencies in the SSA that are either

Debt Recovery Agents of other Telecom Service providers
Debt Recovery Agents of reputed Public Sector Banks/ Financial
Institutions

Assess identified agencies on following parameters:

Experience of working with other telecom operators
Manpower
Financial strength
Ability to scale up manpower and infrastructure for BSNL requirements
Geographic area where they have strong presence
Interest in working with BSNL

Based on this assessment finalize the set of 'Competent Agencies'

3.3. Typically, there should be one agency identified for every 2000 outstanding
accounts

Take the accounts that are between 0 and 20000 Rs., for private customers
only

Divide these accounts to form portfolios as follows:

Divide the accounts into 3 buckets
Bucket 1 (B1): 3 months 6 months
Bucket 2 (B2): 6 months 12 months
Bucket 3 (B3): 12 months - 24 or 36 months

Choice of 24 or 36 months is left to the SSAs. It should be based on the

no. of competent agencies available

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Divide the SSA into areas, on the basis of SDCA or smaller; Each SSA
should be divided into at least 3 areas; Divide the outstanding by Area within
the SSA to get the following portfolios (assuming there are 3 areas in the SSA
A1, A2, A3)
Portfolio 1: B1, A1; Portfolio 2: B1, A2; Portfolio 3: B1, A3
Portfolio 4: B2, A1; Portfolio 5: B2, A2; Portfolio 6: B2, A3
Portfolio 7: B3, A1; Portfolio 8: B3, A2; Portfolio 9: B3, A3
In case an SSA has 4 areas, then there will be 12 portfolios and so on

Allocate portfolios to the 'Competent Agencies' based on area of operation,

capacity etc.
Each portfolio of outstanding should be allocated to a minimum of 2 and
maximum of 3 agencies
Also while allocating, it should be ensured that each agency gets at least
one portfolio in each time bucket

Invite competent agencies to bid for portfolios allocated to them

Bids contain the commission percentage that the agency will charge on the
collections done by them
Each portfolio of accounts will have between 2 and 3 agencies bidding for
them.

Once the bids are opened, the following process should be carried out:
For each portfolio of accounts, the agency with the lowest bid should be
selected.

If the agency with the lowest bid is unable to take on the contract, then
the agency with the second lowest bid should be invited to take over the
contract at the L1 rate; In case no agency agrees at L1 rate, then re-bidding
should be done

While finalizing the allocation the following points should be kept in mind
No agency is allocated more than 2000 accounts for the whole SSA.
No agency gets consecutive time buckets
Any deviation from these rules should be made only if no competent
agencies can be identified.
The entire exercise of identifying and appointing agencies should be completed in 20
days

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Every month, there will be new outstanding cases generated that exceed
more that 3 months in age
Such cases should also be passed onto agencies that have been allocated
the 3-6 month bucket
Therefore, agencies working on the B1 bucket (3-6 months) will get more
accounts added on every month

This should be done for 3 months at a stretch; During this time the number
of accounts in Bucket 1 will keep on increasing

After 3 months, the accounts should be shifted to the next bucket

Accounts will be moved from 3-6 months bucket to 6-12 months bucket at
the end of every quarter; Similarly they will mover from 6-12 month bucket to
the next bucket

Additional incentives can be provided for achieving specific targets as

follows:
The collection should be done in a period of 1 month from date of receiving
list to be eligible for incentive
This additional incentive shall apply to the entire amount collected by the
agency
This scheme is to be measured on a monthly basis, taking into account the
starting portfolio and the amount collected in that month.

Rates of Additional Incentive:

Recovery of outstandings made
by the agent/agency(As % of
portfolio allocated
Up to 20%
>20% and up to 30%
>30% and up to 40%
>40%

Additional Incentive

NIL
3%
5%
7%

3.4. Creation of internal teams and systems

Dedicated team of people required to support, manage and drive the external
agencies. Recommended team structure is given below. All members report to
SSA (IFA)

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S.No.

Position

Agency
Manager

Database
Manager
( billing
packages)

BSNL, India

Query
Handlers

Enterprise
/
Govt.
accounts
manager

Rev date: 01-04-2011

Required
Designation

#
of
people
required

Full
Time/
Part
time

Role

DGM
/
CAO as per
availability

1
per
SSA

Full
Time

Manage all private

recovery agencies
Conduct
weekly
reviews
Drive
agencies
towards targets Collect
and consolidate daily
reports from agencies

CAO / AO

1
per
SSA

Full
Time

Manage database of
outstanding accounts

Full
Time

Answer
queries
raised by agencies in
real time

Part
Time

Follow up on large
value and govt./defense
accounts
Repot weekly to IFA
on progress

SS/TOA

CAO/AO

1
per
Area

1
per
Area

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4.0. National rollout team structure:

Corporate Office
Circle Office
Project Sponsor
Project Champion
(Collections)
E.D (Finance)
CGM, Circle
Project Champion
Circle Head Collections
(Collections)
GM (Finance), CFA
PGM/GM(Finance)
Project Manager
Project Manager Circle
Collections
Collections
DGM/AGM
DGM(TR)/CAO(TR)
(Finance)
Collection Team
Collection Team
3 JAOs
1-2 AO/JAO
Project Manager to
PM( Circle) to manage exercise
manage complete
for the SSAs in their SSAs
PMO for the
initiative

SSA
SSA Head
PGM/GM

Project Manager SSACollections

IFA
Collection Team
6-7 people
PM(SSAs) to drive
initiative at the ground
level

Collection agencies to provide daily reports (hard and soft copy) on the
collections done by them
Format for providing daily report included in the templates

BSNL to provide collection agencies information on accounts that have been

paid up
Information should be provided on daily basis

Query handlers to have access to terminals to answer questions from field

agents in real time
Mechanisms in place to ensure that agencies follow proper code of conduct

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E2-E3/E&WS/Project Kuber
Collection agencies
to provide daily
report
of
all
collections
BSNL to provide
collection agencies
details of bills paid
at counters

Rev date: 01-04-2011

In the defined template for daily collections

There will be certain customers, who after being

contacted by the agencies, will come and pay the bill directly
to BSNL

We need to track such payments

Create master table of all records passed onto agencies for

collection (in the local billing system)

Run daily/weekly checks to see how many accounts have

been paid

Details of these payments should be passed onto

agencies so that the customers are not contacted again

Code of conduct to be followed by collection agencies

Code of conduct created for the collection agencies in line with TRAI
guidelines
Code of conduct to be provided as part of the approved legal contract

Sample audit should be carried out on the customers contacted by the

agencies
Ensure that the collection agencies are operating as per code of conduct

Helpline to be created for customers to contact BSNL in case of any

complaint
Also list of collection agencies put up on the BSNL website

Any serious complaint against the agency that is substantiated should lead to
Immediate cancellation of the contract
Forfeiture of the security deposit of Rs. 20000
Blacklisting of agency for any future contract with BSNL

The agency and the agents should be issues with authorization letter and ID
card from BSNL

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Collection agencies can collect payments only through cheques

Agents to give BSNL receipts to customers on collection of payments
Monitoring & Review

Weekly review to be conducted with the collection agencies

Track %age of amount collected (from the total account passed onto them)
The amount collected should include the following
Cheque payment collected by agencies
Payments made by customers directly at counters
Template provided for tracking agency performance "Agency
Performance"

Non performing agencies should be given a warning

Continuous non performance should result in removal of the agency
A new agency should be appointed for the accounts that were held by the
agency that was removed
The agencies should provide detailed feedback on the status of the accounts
passed onto them

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E2-E3/E&WS/Project Kuber

Rev date: 01-04-2011

Chapter 11:Project Kuber

Sample Self study Questions
1. What is the Revenue Assurance Project of Project Shikhar ?
(a) Project Udaan
(b) Project Vijay
(c) Project Dosti
(d) Project Kuber
2.

Bucket 1 denotes
(a) outstandings of 3-6 months
(b) 6-12 months
(c) 12-36 months
(d) none

3.

Only outstanding dues of ____________ shall be allocated to private recovery

agencies.
(a) Private customers
(b) Central Govt
(c) Defence
(d)None of these

4.

If an SSA is divided in to 3 areas, how many portfolios are prepared?

(a) 2
(b) 3
(c) 4
(d) 5

5.

Out standing dues of more than Rs. 20000/- should be persuaded by

(a) Private Recovery agencies
(b) BSNL Internal Teams
(c) To be written Off

6.

No agency is allocated more than ____________ accounts for whole SSA

(a) 1000
(b) 1500
(c) 2000
(d) 2500

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7.

The outstanding accounts are to be reviewed and shifted to the next bucket
(a) After 2 months
(b) After 3 months
(c) After 6 months
(d) After one year

8.

Internal Team of SSA report to

(a) SSA head
(b) IFA of SSA
(c) CAO(TR) of SSA
(d) DGM(ADMN)

9.

____________ is the Agency Manager in SSA.

(a) SSA head
(b) IFA of SSA
(c) CAO(TR) of SSA
(d) DGM(ADMN)

10.

What is the security deposit payable by the approved private recovery agency?
( a) Rs. 10000/(b) Rs. 15000/(c) Rs. 20000/(d) Rs. 25000/______________ is the project Sponsor(Collections) of project Kuber at Corporate

11.
Office.

(a) Director (CFA)

(b) Director (CM)
(c) Director(EB)
(d) ED (Finance )

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