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Gone are the good-old golden years of late-1990s and early-2000s, when call rates were high, competitors were few, and the market was waiting to be tapped without much aggressive marketing and efforts as demand far outstripped supply. In a nutshell, doing business was highly profitable. Telecom operators could easily live with some amount of fraud impacting their bottom-line. Since the market had not yet matured enough and with fewer players in the game, even despite issues like inferior voice quality, frequent network congestion, call set up delays and spectrum management issues, the threshold of customer tolerance to quality was rather high, and given the limited number of service providers, it would not trigger churn or jeopardize market share.
Things have changed pretty rapidly since. The new mantra of the game is survival of the fittest. As a deluge of service providers woo customers and push price points south, and with margins turning into a nano-element of business, fraud has emerged as a global problem that can no longer be ignored and could mean the difference between survival and death. Every penny saved is a penny earned, and fraudsters could not just bleed the operators but potentially ruin customer perception with consequent quality issues arising out of fraud.
Is somebody eating into your profits, and reputation?
In the telecom world, 'termination' is the price charged by telecom service providers for delivering calls on their network originating from other networks in the same country or international destinations. Termination rates are particularly high in the mobile industry and contribute to 15% of operator revenues, forty percent of which is earned through international termination. Fraudsters often try to make a quick buck by siphoning off your termination charge revenues by resorting to what is known as a SIM Box Fraud, where they use GSM Gateways for international termination.
A SIM Box is a device consisting of several SIM cards in a box-like structure, that uses the internet and the SIM cards enabling incoming international calls to be to be 'rigged' in a way such that an international call arriving is re-routed as a domestic call for the receiver, bypassing any kind of interconnect (termination) fees in the bargain. SIM Boxes are prominent in many parts of the world, including Latin America, Asia Pacific, Middle East, Africa and even Europe. This is done using in-country local sim cards that offer very low rates for termination in the same network or across local networks within the mobile service provider market.
Such SIM Box frauds can be of three types — On Net, Off-Net Inbound, and Off-Net Outbound — depending on which SIM has been used and what is the destination called. With revenue leakages of up to 5%-20%, SIM Boxes add to telecom operator woes of falling APRU's and revenues. Additionally, these SIM Boxes cause problems also for customers. Calls routed through SIM Boxes generally feature low call quality, network problems, spectrum management issues, and substandard user experience, among other things. Consequently, the telecom operators not only lose out on the interconnect fees, but adversely sully their reputation with resulting poor line quality and network arising from SIM Box traffic. SIM Boxes also cause abnormally high demand on cells causing congestion, besides hampering delivery or quality for Video Telephony, Fax, CSD, and Emergency service. Inbound roamers also complain of not receiving any calls as SIM Box is unable to route such calls. On networking side, SIM Boxes lead to spectrum inefficiency & poor network planning.
Usually, such calls that are fraudulently routed through SIM Boxes can be identified when you are unable to see the caller identification and/ or, when you have received an international call displaying a local in country CLI. However, detecting such fraudulent SIM Box routed calls is becoming increasingly challenging as the Gateways often use frequently changing identities, and use numerous SIM cards, radio frequency manipulation to emulate mobility, and portable form factors to quickly relocate when tracked.
Assessing the damage
These boxes are extremely prominent in Latin America, Europe, Middle East, Africa and Asia. Over the past year, more than 200,000 unique SIM cards used by GSM Gateway operators around the world have been identified. With estimates upwards of €8 of losses per SIM card per day, SIM Box fraud today represents annual revenue losses of several hundred million Euros.
The good news is that quick detection and prevention can generally help enable 90-95% savings in revenue from SIM Box fraud.
Old ways to tackle fraud
Traditionally, remote probe and SIM-based active testing solutions were heavily used by telecom operators, but are fast becoming outdated as they cause many problems such as network issues and incorrect detection of SIM Box — SIM cards. Further, such traditional solutions are only capable of detecting fraud and not containing it.
Traditional offline solutions do not provide proactive detection, 'no false positive', 'no false negative', and do not qualify for assessment criteria such as time-bound test limitations, undesired infrastructure sharing and unlimited parallel testing.
Physical probe solutions are limited by the fact that these do not cover all countries, have time-bound limitations on testing, work on vulnerable shared infrastructures, do not offer unlimited parallel testing, and can be detected by fraudsters relatively easily, thereby alerting them.
New-age solutions for new-age challenges
As a world leader in roaming solutions with a customer base of over 400 mobile operators across 150 countries, we at Roamware focused our R&D efforts to overcome these challenges faced by traditional methods of SIM Box fraud detection. In Q3 of 2009, we launched the SIM Box Detector TM, which constituted of a comprehensive, multi-dimensional quality management solution that could be installed in the core of the operator network, and could simulate calls and trace the routing of the call to effectively identify SIM box installations on a 24/7 basis. This new SIM Box DetectorTM solution can help identify such SIM cards up to an incredible accuracy of 99.999%. Since this new solution is non-intrusive of network usages, it also helps reduce the congestion on networks.
Furthermore, this solution has the ability to block SIM cards upon identification on a real time basis. Unlike traditional methods listed above, it is not based on the reactive CDR analysis. Instead, this solution simulates a 'Radar effect' by continuously detecting SIM Box (GSM Gateway) platforms through call signal dispatch, and covers all mobile routes (and their associated transit carriers) of roaming partners.
It creates virtual subscriber profiles for 'test agents' with call forwarding back to home, thereby helping not only in detecting SIM Box Fraud installations, but also deactivating them and plugging SIM Box induced revenue leakage. By randomly using several hundreds of reserved numbers, the solution makes it extremely difficult for fraudsters to differentiate test calls versus real calls. Hence they end up getting caught before they can get alerted.
The success of this revolutionary new real-time technology is evident from the fact that Roamware has been successful in detecting and eliminating as many as 30,000 SIM Box gateways across regions in the first 6 months itself.
While the fight to plug revenue leakage resulting from fraud is an ongoing battle across a range of revenue elements, termination revenue is one area that operators could adequately defend and go well beyond the standard block and tackle enabled by legacy solutions and effectively terminate this menace with solutions like that of Roamware. While good and evil will not cease here, at least telecom operators now have a new arsenal that they can use to effectively combat fraudsters and redeem their deserved interconnect revenues and reputation.
Abraham Punnoose, VP-Marketing & Business Development Roamware Inc.