Mobile networks operators are missing out on more than $150m a year in lost revenues through the illegal termination of minutes.
Mobile networks operators are missing out on more than $150m a year in lost revenues through the illegal termination of minutes.
Revector, a UK-based mobile anti-fraud specialist, believes indecision and a failure to take SIM box fraud seriously is costing operators and shareholders dear.
Over the past two years the company has identified illegal SIM box termination in more than 50 countries, uncovering cases where SIM cards were generating up to 10 cents per minute for more than 20 days per month. That equates to $3,000 per SIM, per month in lost revenues for some operators. Indeed, the company says that one well-known European operator has estimated loses in excess of $15m a year through SIM box fraud.
Yet there is a feeling that perhaps some operators remain blind to the problem while others are delayed by indecision, according to Andy Gent, CEO of Revector.
We find the situation is different with operators across the world. Some don’t know about it still while others can’t pigeonhole whether it’s between fraud or interconnect departments, so nobody takes any action. Some have no budget and want to investigate themselves and things just drag out.,” he said. “Those who don’t take any action are just letting revenues slip through their fingers. In Latin America, for instance we spoke to someone three years ago who still hasn’t implemented things.”
SIM box fraud takes place when individuals or organisations purchase hundreds of SIM cards offering free or low cost calls to mobile numbers. They then use these to redirect national and international calls away from mobile network operators, presenting them as local calls on their networks.
Gent points out that it’s not just operators who suffer here at the hands of fraudsters though. Call quality and the user experience can also be severely dented when standard features like caller line identity are often removed as well.
The larger companies know that they are losing revenue here, but in the scheme of things it’s on the bad debts and they feel they have bigger items to go after like international revenue share fraud and all the other stuff you read about,” he added.
Gent went on to explain that the scale of SIM box fraud is driven by the easy availability of GSM gateway hardware and the wide range of offers out there from mobile network operators.
Organisations can effectively go into business terminating GSM calls and generate thousands,” he said. “We have seen countries where tens of thousands of SIM cards are being used for illegal termination at any one moment in time.”
For those operators looking carefully at cost bases and at how much it takes to combat SIM box fraud as part of the overall bigger picture, Gent puts the cost in the tens of thousands. “Ours is a monthly service you can turn on or off, so if you don’t feel you’re getting value, there isn’t a massive capital expenditure,” he added.
