Telekom Austria turns regulatory compliance into marketing advantage with SAS®

Using SAS® Activity-Based Management, Telekom Austria increased cost transparency and auditability to improve efficiency and shorten time to market.

The customer
With over 2.4 million landline customers in 15.4 million mobile clients, the Telekom Austria Group has a strong market position.

Because of its market-dominating position, Telekom Austria is subject to a particularly strict level of regulatory oversight as it develops new products and establishes rates and charges for these products.

In Austria the Telecom Control Commission   ensures that rates and charges are structured in such a way that other providers can offer products and services at competitive prices.

The task
As an example of this process at work, regulators call in expert witnesses who must evaluate whether a product will be allowed to enter the market, in what form, and at what price.

“Using SAS, we can quickly visualize where particular costs result and how we arrived at the calculation,” explains Markus Loibersböck, who heads Telekom Austria’s Regulatory Cost Accounting team. “This creates transparency and auditability – the key requirements for an efficient evaluation process and short time-to-market.”

The challenge facing Telekom Austria is to design appropriate rates and charges so that they are both competitive and attractive for customers and transparent to the regulators. To withstand regulatory review, the allocation of costs and revenues to all services and service elements must be sufficiently transparent for scrutiny. Otherwise the proposal will be rejected for lack of adequate supporting data.

Without transparency and compliance, the company risks significant delays in getting products to market – and, in some cases, from even getting to market, period.

The solution
Working with SAS, Telekom Austria implemented their “regulatory cost accounting” model.

“Everything started in 1998 with the beginning of market liberalization,” says Peter Klune, responsible for Strategic Regulatory Affairs at Telekom Austria. “Based on the new environment, we needed new, efficient cost-accounting models that were able to model complex cost relationships transparently. While an Excel spreadsheet may have been sufficient up to that point, it was now necessary to prepare product calculations on a much more structured basis.”

In accordance with the national regulations, Telekom Austria’s model was based on an approach that ensures that the user pays all of the costs, direct and allocated, that are incurred in a complex infrastructure used jointly by numerous services.

How do you create transparency in such a complex situation? How do you clearly identify each cost thread weaved into such a tangled setting? For Telekom Austria, the solution  was to implement a robust activity-based costing model.

Activity-based costing links the resource costs typically associated with a budget or general ledger, such as salaries, travel, utilities, etc. and assigns them to the activity-related products and services that mediate the process and create the value. 

With SAS Activity-Based Management, the cost pathways to, from, and through any identifiable cost source, cost object, or activity is clearly visible to the Telekom Austria management team and equally visible to the regulators who need to ascertain the veracity of the assigned costs.

Today, when regulators visit Telekom Austria to inspect records, Klune and his team have a decisive advantage: By using SAS, they can access a summary with the push of a button or they can view details in full. Either way, the most demanding auditor can trace back to the desired degree of detail.

“It’s a transparent and efficient solution that would not be possible through just the general ledger or with an Excel spreadsheet,” Klune says.

The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.

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