Mobile network operators have lost 20% of termination revenues to over-the-top (OTT) hijack in the last 12 months on average, with some operators losing more than 70%, according to a new survey conducted by anti-fraud specialist Revector.
SIM Box fraud and OTT hijack remain two of the major threats to mobile operator revenues with more than 80% of operators experiencing SIM Box fraud and three quarters being victims of OTT hijack, which is recognised in the survey as the single biggest future threat.
The survey was sent to every mobile operator in the world and completed by 150 fraud and revenue protection professionals across all continents. Of the 70% of operators experiencing OTT hijack, the average loss of revenue compared to 12 months ago has increased 21% with some operators experiencing losses exceeding 60% of interconnect revenues.
Andy Gent, the chief executive of Revector, said: “This survey demonstrates the impact that fraud and call hijacking is having on mobile operator revenues. If operators do not address issues such as SIM Box fraud and OTT hijack, revenues from interconnect will have effectively disappeared by 2020.”
The operators were also asked about customer complaints, with half of respondents experiencing increased customer issues in the past 12 months. Issues around call quality were cited by almost 90% of respondents as the primary driver of customer complaints.
In spite of the revenue losses and increased customer complaints, less than 15% of operators surveyed had increased revenue protection budgets in the last 12 months.
“Simple revenue protection measures against SIM Box fraud can reduce revenue losses within a week and the service will pay for itself several times over in terms of revenues retrieved,” added Gent. “Revector has recently deployed the first proven OTT hijack elimination service to networks in Africa and Asia. The impact on revenues has been extremely significant – the service delivers a return on investment of eight times within weeks.”
Joel Stradling, research director at Current Analysis, commented: “The Revector survey provides concrete indication about the scale of fraud exposure that MNOs face today, with OTT bypass in particular causing major leakages of termination revenues. Revector offers a solution for accurately measuring OTT hijacking detection and management, giving MNOs the opportunity to react to peaks in OTT traffic and stem the flow of revenue losses. The analyst perspective on fraud is that MNOs must play a greater part in enforcing prevention; this should help drive an increase in termination revenues further down the line.”
