13 Oct 2014

Can Mobile Operators Fight Back Against Interconnect Fraud?

Written by Hassan Iftikhar, CSG International

With more than $2 billion USD of revenue lost every year to interconnect fraud, it’s no wonder why mobile operators around the world are focused on reducing illegal bypass termination, which represents the single largest contributor to interconnect fraud.

To circumvent calling rates, many subscribers in emerging markets have multiple phones to take advantage of offers that allow them to talk for free to subscribers on the same network. The same idea applies to termination of calls: by using multiple mobile phones (with multiple SIM cards) for each network, illegal terminators can direct calls onto the corresponding network. Calls will come into the country over the internet to a specific connection, then terminate via a mobile phone (or a rack of SIMs) which are in reality connected to the imposter’s computer. 

Bypass fraud is more prevalent in the countries where the cost of terminating an international call is considerably higher than that of a national call. This is most prevalent in many parts of Africa and the Middle-East. Fraudsters (individuals or organisation) will sell capacity to terminate calls in these countries at much cheaper rates, on the open market. They may even have direct connections to some operators. The end user (subscriber) is usually unaware of this sort of fraud but will experience delays, bad call quality and reduced services such as no caller id.

Illegal termination circumvents the regulated mobile operators who are allowed to take foreign calls coming into a given country. In some countries, industry experts estimate that as much as 70% of mobile traffic is terminated on illegal routes.
The technology to commit this type of fraud is readily available and is fairly easy to set up, break down, and set up somewhere else.  How can operators get ahead of this profit-draining trend?

Mobile operators have two lines of defense:

  • Live traffic analysis based solutions: these capture live customer traffic Call Detail Records (CDRs) from local switches and use rules to detect subscriptions/phone numbers with suspicious call patterns

  • Test call based solutions: these generate end-to-end controlled test calls from overseas into the target mobile network where test nodes are placed to receive the calls. The Calling Line Identification (CLI) is inspected.

Both approaches have their advantages and are effective when used in combination, particularly whenoperators also work closely with regulatory bodies to ensure prompt legal action. The test call based approach has the distinct advantage of speed: a test call-based system can pinpoint a SIM box number with a single call.

As with any type of fraud, speed is important since the way to remove illegal bypass from the network is to eliminate potential profits for the fraudster.  Continuously and rapidly blocking the fraudulent SIM cards becomes a nuisance for the fraudster, prompting them to look elsewhere for easier prey.

To combat this type of fraud successfully, operators are beginning to deploy solutions that generate continuous test calls from overseas into the target network—and do so in a variety of ways.  Since only some of the traffic into the country will be subject to illegal bypass, an effective solution must be able to simulate a large variety of traffic streams into the target network.

Indeed, fraud has become big business in the mobile world—and its attraction as a lucrative “get rich” quick scheme only promises to grow as subscribers in emerging markets and international calling plans rise. But with the right approach, mobile operators can fight fire with fire.

 For more recommendations and best practices on how to sniff out mobile fraud
visit us at AfricaCom stand P84
or download our white paper or learn more about call quality best practices here.

No comments:

Post a Comment