08-16-2018, 10:41 AM
Nigeria loses $3bn to call masking
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Telecom operators and the government of Nigeria have lost $3 billion in revenue to the prevalence of call masking activities, New Telegraph has learnt. The illegal activities of disguising international calls as local calls has been a major challenge confronting the telecom sector even as recent regulatory measures failed to address the problem.
According to the Executive Commissioner, Stakeholders Management at the Nigerian Communications Commission (NCC), Mr Sunday Dare, said the regulator had rolled out a number of regulatory, technical and other actions to tackle the menace, yet the activities persist.
He noted that call masking through what is known as Sim Boxing is now prevalent in the country.
“Simbox or Interconnect Bypass Fraud is one of the most prevalent frauds in the telecom industry today,” he said. “This fraud costs the industry about USD3 billion in loss revenue. It happens when calls made via the Internet are sent to Simboxes (machines that house SIM cards), which redirect this illegal VoIP traffic onto mobile networks.”
Apart from its national security implications, call masking affects the licensed telecom operators in the country, as they lose revenue from international calls, since such are being being manipulated as local calls while the government is also losing tax revenue on those calls. A recent report by Pricewaterhouse Cooper (PwC) Nigerian revealed that Nigerian telcos experienced 59 per cent drop in volume of international call from October 2016 until early this year due to increased call masking activities.
The Executive Commissioner noted that the regulator was aware of the menace and it considered even a single case of call masking as too many because of the grave implications it has on social, economic, security and communications wellbeing of Nigerians.
Explaining the scenarios under, which call masking occur, Mr Dare said in the first scenario, the perpetrator is somewhere between the two networks. “Telecoms is a game of volumes, and some players have positioned themselves as middlemen who aggregate huge volumes of traffic bound for the country from several operators around the world,” he explained.
“To make their margins, they compress the calls and strip them of their original numbers before terminating them on local networks.
“In another scenario, the calls reach Nigeria in their original form (i.e. with Calling Line Identity), but are masked or disguised by a local player who presents it to the terminating network as a local call. Thus disguised, the perpetrator pays the local player the lower domestic interconnection rate and pockets the differential between this and the higher amount he collected in foreign exchange. It is important to appreciate that call masking is both complicated and widespread.”
The NCC Commissioner added that just like Nigeria, other countries are fighting the menace, deploying several regulatory, economic and technology tools.
Besides, he said masking and SIM boxing are a bit like virus attacks and the perpetrators continue to devise complicated strategies.
“As regulators and other stakeholders deploy ‘anti-masking’ ‘anti-virus’ solutions, they try to up their game. The NCC is nonetheless up to the task” he said.
Highlighting some of the efforts of the regulator in tackling the problem, he said the NCC took an unprecedented step of suspending a major operating license last February. In addition, he said very strong censure was visited on other clearinghouses, and some licenses were disconnected from the national network pending compliance with necessary regulatory requirements. The regulator also barred 750,000 numbers assigned to 13 operators from the national network
“All of these measures were taken after painstaking investigations with the participation of security experts from the Office of the National Security Adviser and the Department of State Services,” he said.
“Another regulatory measure is the tightening of SIM registration processes across all networks. You may recall that a broad-based Task Force to deal with SIM registration failings was established in October 2017. The Task Force has made far-reaching recommendations, which are now being implemented. A few of the actions the industry will activate in the days to come may cause inconvenience to some, but, it is in our national best interest that we show forbearance and see this process to its logical conclusion. Tightening up the SIM registration process would not only reduce the availability of SIMs for SIM-boxing, it would also help address the security issues around the availability of pre-registered or fraudulently registered SIMs”.
Meanwhile, the NCC said it has just completed a painstaking solutions evaluation process and is rolling out a sophisticated SIM-box hunting technology, which will enable the regulator to track perpetrators anywhere they may be in-country.
Telecom operators and the government of Nigeria have lost $3 billion in revenue to the prevalence of call masking activities, New Telegraph has learnt. The illegal activities of disguising international calls as local calls has been a major challenge confronting the telecom sector even as recent regulatory measures failed to address the problem.
According to the Executive Commissioner, Stakeholders Management at the Nigerian Communications Commission (NCC), Mr Sunday Dare, said the regulator had rolled out a number of regulatory, technical and other actions to tackle the menace, yet the activities persist.
He noted that call masking through what is known as Sim Boxing is now prevalent in the country.
“Simbox or Interconnect Bypass Fraud is one of the most prevalent frauds in the telecom industry today,” he said. “This fraud costs the industry about USD3 billion in loss revenue. It happens when calls made via the Internet are sent to Simboxes (machines that house SIM cards), which redirect this illegal VoIP traffic onto mobile networks.”
Apart from its national security implications, call masking affects the licensed telecom operators in the country, as they lose revenue from international calls, since such are being being manipulated as local calls while the government is also losing tax revenue on those calls. A recent report by Pricewaterhouse Cooper (PwC) Nigerian revealed that Nigerian telcos experienced 59 per cent drop in volume of international call from October 2016 until early this year due to increased call masking activities.
The Executive Commissioner noted that the regulator was aware of the menace and it considered even a single case of call masking as too many because of the grave implications it has on social, economic, security and communications wellbeing of Nigerians.
Explaining the scenarios under, which call masking occur, Mr Dare said in the first scenario, the perpetrator is somewhere between the two networks. “Telecoms is a game of volumes, and some players have positioned themselves as middlemen who aggregate huge volumes of traffic bound for the country from several operators around the world,” he explained.
“To make their margins, they compress the calls and strip them of their original numbers before terminating them on local networks.
“In another scenario, the calls reach Nigeria in their original form (i.e. with Calling Line Identity), but are masked or disguised by a local player who presents it to the terminating network as a local call. Thus disguised, the perpetrator pays the local player the lower domestic interconnection rate and pockets the differential between this and the higher amount he collected in foreign exchange. It is important to appreciate that call masking is both complicated and widespread.”
The NCC Commissioner added that just like Nigeria, other countries are fighting the menace, deploying several regulatory, economic and technology tools.
Besides, he said masking and SIM boxing are a bit like virus attacks and the perpetrators continue to devise complicated strategies.
“As regulators and other stakeholders deploy ‘anti-masking’ ‘anti-virus’ solutions, they try to up their game. The NCC is nonetheless up to the task” he said.
Highlighting some of the efforts of the regulator in tackling the problem, he said the NCC took an unprecedented step of suspending a major operating license last February. In addition, he said very strong censure was visited on other clearinghouses, and some licenses were disconnected from the national network pending compliance with necessary regulatory requirements. The regulator also barred 750,000 numbers assigned to 13 operators from the national network
“All of these measures were taken after painstaking investigations with the participation of security experts from the Office of the National Security Adviser and the Department of State Services,” he said.
“Another regulatory measure is the tightening of SIM registration processes across all networks. You may recall that a broad-based Task Force to deal with SIM registration failings was established in October 2017. The Task Force has made far-reaching recommendations, which are now being implemented. A few of the actions the industry will activate in the days to come may cause inconvenience to some, but, it is in our national best interest that we show forbearance and see this process to its logical conclusion. Tightening up the SIM registration process would not only reduce the availability of SIMs for SIM-boxing, it would also help address the security issues around the availability of pre-registered or fraudulently registered SIMs”.
Meanwhile, the NCC said it has just completed a painstaking solutions evaluation process and is rolling out a sophisticated SIM-box hunting technology, which will enable the regulator to track perpetrators anywhere they may be in-country.