Let's us firts understand fully how it goes:
SIM Boxing is a process of creating an artificial middle man with a device that alternates call rates. A SIM Box fraud is a practice whereby SIM boxes are installed with multiple prepaid SIM cards. This enables the fraudsters to bring calls through VolP (through internet) and terminate international calls through local phone numbers in the respective country, just to make it appear as a local call, by initiating the call through local SIM installed in the SIM box.
SIM box fraudsters mainly use the prepaid SIM, the ownership and address of which is hard to know whereas post-paid SIM are easily traceable because of address verification at the time of connection. The affected stakeholders are the mobile operators, the legal international carriers, and the government.
There are two major players involved in this activity: (1) the fraudsters inside the terminating country; and (2) the illegitimate international carriers from across the border. The fraudster could be a SIM box operator, a local loop operator or a national carrier license holder. The SIM box fraudster basically sets up everything-the SIM boxes, the connectivity, the manpower, and fresh suppliers of SIMs. The local loop operators, bringing in illegal traffic, may use their switches in place of a SIM box. This makes it look like a local call using their own numbering series to terminate the traffic onto mobile operators. The national carrier may bring in illegal traffic, change the ‘A’ number to fake local loop number for each call and terminate the same onto mobile operators on their national trunks instead of international trunks.
Let me explain simplified first the basics of a GSM network and the billing process. I will cut some steps in the process, otherwise it will be too difficult to understand.
If a customer X of company like MTN Uganda calls a friend Y who has a subscription at MTN the flow goes like this.
Cellphone X transmits to the nearest antenna or BTS (Base Transmitter Station,omulingoti) of MTN. The BTS passes the call through the central computer or switch of MTN, where the receiving party is recognized as being a customer of MTN as well, and then the switch sends the call to the BTS where customer Y has made contact and then that BTS send the call to the cellphone of Y. So only the beginning and the end of the call are radio signals (mobile), the in between steps the signal is passed though fixed lines be it glassfiber or such. Customer X will get billed for the call. Since all the traffic is on the network of MTN, they don’t have to pay anyone. This is called an on-net call, where the calls are made between customers of the same network.
Next situation:
If a customer X of MTN calls a friend Y who has a subscription at AIRTEL the flow goes like this.
Cellphone X transmits to the nearest BTS of MTN. The BTS passes the call through the switch of MTN, where the receiving party is recognized as being a customer of AIRTEL. Switch of MTN connects the call to the Switch of AIRTEL, that forward the call to the BTS of AIRTEL where customer of AIRTEL made contact and then radio signals the call to the handset of the customer of AIRTEL. Customer of MTN still gets billed for the call. As you can see, now half of the call (the start) is on the network of MTN and the other half ( the termination) of the call makes use of AIRTEL’s network. So AIRTEL sends MTN a bill for making use of their network, which they have to maintain. This bill is called termination fee, which every operator has to pay for off-net calls.
To bypass that termination fee, one fraudster can have a simbox to terminate off-net traffic on the radio network of a company. Only switch to switch traffic is charged for termination fee. With a simbox you can convert fixed line calls to mobile calls, using that box and activated simcards. The trick is that companies offer buy off bundles for on-net traffic, say for € 5 a month you can call as much as you want to customers of the same network. Or they have really low on-net tarrifs like 5 cent per minute. They can do that since there are no cost involved for that company since as we saw in the example there are no costs for that company, as long as the calls are started and ended by their own customers.
So the fraudster get some simcards with a tariff of 5 cent per on-net call each for MTN network. He puts them in the simbox and then starts to advertise. Normally when another company want to terminate a call to a customer of MTN they have to pay let’s say 15 cent per minute to MTN. (Not the actual price, but for making it easy to understand) But they only have to pay that when traffic is connected through the switches. The fraudster then can approach MTN and tells them that he is able to terminate all their traffic towards customers of MTN, but for only 10 cent per minute. AIRTEL agrees because that tariff is 5 cent per minute less than if they handover the traffic directly to the switch of MTN. They now send their traffic to the simbox of the fraudster that converts the traffic to mobile calls, just as if it was a giant handset with multiple simcards in it. Since the fraudster only has to pay the subscription fee and a tariff of 5 cents per minute while receiving 10 cent per minute he is making a profit of 5 cent per minute, per sim. He off course pays his bill right away because he wants his simcards open. Since the traffic is huge 5 cent per minute per sim means he earns $72 each day per sim. So if he has 10 sims, he is earning $ 720 a day just by having that simbox active.
MTN then have a customer that has a monthly bill of let’s say $ 20.000. At first they are happy with such customer that pays his bills every month. But instead of gaining $ 20K, they lose $40K each month, because if all that traffic was presented at their switch they would have billed AIRTEL $60K for those calls.
SIM box fraudsters mainly use the prepaid SIM, the ownership and address of which is hard to know whereas post-paid SIM are easily traceable because of address verification at the time of connection. The affected stakeholders are the mobile operators, the legal international carriers, and the government.
There are two major players involved in this activity: (1) the fraudsters inside the terminating country; and (2) the illegitimate international carriers from across the border. The fraudster could be a SIM box operator, a local loop operator or a national carrier license holder. The SIM box fraudster basically sets up everything-the SIM boxes, the connectivity, the manpower, and fresh suppliers of SIMs. The local loop operators, bringing in illegal traffic, may use their switches in place of a SIM box. This makes it look like a local call using their own numbering series to terminate the traffic onto mobile operators. The national carrier may bring in illegal traffic, change the ‘A’ number to fake local loop number for each call and terminate the same onto mobile operators on their national trunks instead of international trunks.
The perpetrators of these telecoms infractions have ulterior motives in tampering with international calls and disguising such calls as local calls because of the profit they hope to make from the price differential between international and local call termination rates.
Effects of SIM Box Fraud
Subscriber Identification Modules (SIM) box fraud is a set up where fraudsters team up with international entities,and local operators (I highly anticipate that simcardboxing in Uganda is made possible as a result of teaming with local network operators especially a connivance with their dubious employee to route international calls through the internet, using voice over internet protocol (VOIP) and terminate those calls through a local phone number in Uganda to make it appear as if the call is local.
This allows the box operator to bypass international rates to fraudulently undercut the prices charged by Mobile Network Operators (MNO) and evade the surtax charged by the government. This act denies telecommunications and government from benefiting from international phone calls. Besides loss of revenue, SIM Box operators cause degradation of call quality which prevents them from meeting service level agreements for mobile hubbing traffic. Uganda, in recent years, made attempt to detect and track SIM Box fraudsters.
Another effect is on our social media accounts,that is Instagram, Facebook, WhatsApp, emails,...etc,whereby 2FA and other verification messages are carried to local phone numbers.
I believe the tracking and detection activities only deter fraudsters, but it does not eradicate the problem. Administrative and technical controls must be implemented in Uganda to thwart SIM Box operations.
Strategies must be implemented to include Geo-location solution which will expose the location of the equipment and their operators for confiscation and prosecution. The network operators must be mandated to block all SIM card identified to be involved in SIM Box fraud activities, but these operators mostly do not block this fraud SIMs in real time or near time.
I believe these mechanisms cannot prevent SIM Box operations in Uganda because they can only detect or track fraud activities. The solution must not be just tracking, blocking SIM cards and arresting the culprit. Both administrative and technical measures must be put in place to stop the act or make it less attractive.
The only plan that could probably stop or prevent SIM Box fraud in Uganda is to create an environment where the criminal will feel uncomfortable to operate. Since it is practically impossible and economically unwise to reduce the call rate for the international traffic penetration, government must implement measures to either reduce the crime rate or eradicate it entirely.
The sale of pre- paid SIM cards contributes to operation of SIM Box activities.I recommend that Uganda Communication Commission (UCC) put measures in place to reduce the sale of pre-paid SIM cards by Ugandan mobile telecommunication companies. UCC must sanction any network operator whose SIM is used for perpetrating crime without proper profiling.
UCC must speed up the ironing out of SIM registration irregularities which are still in existence. Additionally, network operators need to implement an intelligent software or hardware system that can detect and report multiple name registration for onwards investigations.
UCC must task the communication policy implementers and other security organs to provide enhanced bypassed traffic detection and location-aware system. This system has the capability to identify fraudulent VoIP calls (in real-time) and provides the GPS coordinates for the exact location of the SIM Box. The proposed intelligent solution could be software or hardware device programmed to intelligently detect cases in real-time and then enforce immediate blocking of the SIMs detected.
Real-time information of any suspicious or potentially fraudulent activity can be instantly identified and brought under control so that financial losses are avoided. Further, there must be automation of fraud detection process, implementation of organizational standards, customized policies, rules, and thresholds (with fraud management system) which is built around UCC’s specific needs and operational requirement.Government must ensure that the law enforcement agencies,UCC, Network operators and police collaborate to effect an arrest of the perpetrators in near real time. These measures, when implemented appropriately, have the ability of providing a lasting solution to the SIM Box fraud in Uganda and other persistent communication related crimes.
CALL MASKING
Call masking/refilling is a practice in which callers hide their true numbers when making calls, especially international calls, in order to evade international call rates. A masked call happens when an international call coming into a country is concealed and presented as a local call in order to avoid payment of the correct international termination rate (ITR). For instance, if a number is masked as a local call, the rogue network operator pays Local Termination Rate (LTR) instead of the approved ITR.
call masking has the following repercussions:
1. It is powered by Voice APIs, a coding platform where a developer can set up phone number proxies to keep parties from knowing each other’s phone numbers during a call.
2. It uses a short-lived phone number for each party.This allows the caller to communicate seamlessly during a specified time period, with no room for the recipient to speak.
3. It is one of the many platforms terrorists use to communicate in an anonymous manner.
4. It is used to disguise as a family, especially for fraudulent motives.
5. It is a method used to evade the international call rates.
6. Call masking amounts to revenue loss for licensed local telecom operators from international calls since they are being disguised as local calls.
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