AWalker@RED.RUTGERS.EDU.UUCP (06/02/86)
[From Communications Week, May 12 1986] SOFTWARE BUGS COST GTE SPRINT MILLIONS IN UNBILLED CALLS by Dave Rovnan Burlingame, Calif - GTE Sprint Communications Corp. failed to bill customers for millions of dollars worth of calls made between Feb. 21 and April 26 of this year, Communications Week has learned. Sources said the failure cost Sprint between $10 million and $20 million. GTE Sprint confirmed an error had been made but would not comment on the value of missed calls. The errors were made through 10 of Sprint's 58 switches because programming bugs prevented software from recognizing regular long distance calls, a company spokeswoman said. Regular calls made by Sprint's business and residential customers went undetected in those 10 switches until officials at Sprint noticed a drop in the overall number of messages, said the spokeswoman. Other Sprint services were unaffected by the billing mistakes. With Sprint collecting approximately $1 billion in revenues a year, $20 million represents about 2 percent of the company's annual revenue. But one analyst called the size of the error unprecedented. All of the carriers have had billing troubles to a certain extent, according to Fritz Ringling of the Gartner Group, Stamford, Conn. But mistakes amounting to 2 percent of Sprint's yearly revenue are "substantial", Ringling said. Sprint employees are currently consulting records to see which among the thousands of calls made during that period were billed and which went unbilled. The company will soon begin to bill customers retroactively for the calls, the spokeswoman said. While Sprint is uncertain how it will recover its lost revenue, the spokeswoman said customers will not receive a single enormous bill aimed at collecting the unpaid amounts. The errors apparently happened because programmers made billing software changes in some, but not all, of Sprint's switches. The omissions have since been corrected. The locations of the switches were not released by the company. A Sprint sales official in Chicago said he was not aware of any billing problems affecting his customers in Wisconsin or Illinois. Some analysts, like Ringling, were surprised at the size of the error and the length of time it went unnoticed. One knowledgeable observer, who preferred to remain anonymous, said that no carrier had previously committed an error of this magnitude. Most analysts, however, observed that billing errors by interexchange carriers are common. The analysts said that due to the numerous changes the companies have made with the advent of equal access, some errors have occurred and may recur. While Sprint's error is relatively large, it will not make the difference between profit and loss for the carrier, according to Jack Grubman of Paine Webber. "At $350 million a quarter in revenue, $20 million, if only one time, isn't going to represent that big a deal." GTE Sprint is in the process of consummating a merger with Kansas City-based US Telecom Inc., the long distance unit of United Telecom Inc. The agreement is expected to be consummated in July. ************************************** A toast to equal access! _H* -------