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African Mobile Operators under threat from SIM box fraud

Mobile networks and government regulators are facing a staggering annual revenue losses from ‘GSM Gateway’ or ‘SIM box’ fraud. This comes in the wake of claims by mobile anti-fraud specialist, Revector, that SIM box fraud could easily be costing operators $150mn in lost revenue.

‘SIM box’ fraud takes place when individuals or organisations buy thousands of SIM cards offering free or low cost calls to mobile numbers. The SIM cards are then used to channel national or international calls away from mobile network operators and deliver them as local calls, costing operators revenues.

Andy Gent, CEO of Revector commented: “Our studies of more than 50 mobile networks over the last two years show that levels of fraud are topping $150mn annually.”

Sim box fraud hotspots

Revector has identified illegal SIM box fraud throughout Africa including Cote d'Ivoire, Democratic Republic of Congo, Ghana, Kenya, Madagascar, Sierra Leone Somalia, Sudan, Tanzania and Uganda.  In some cases SIM cards were generating up to 10 cents per minute for more than 20 days per month, costing an operator up to $3000 per SIM card, per month in lost revenue.

“Recently the government of Ghana in East Africa reported SIM box fraud has cost $5.8mn in stolen taxes alone. Other African states exhibit equal or greater levels of fraud where operators have failed to take measures to combat this illegal activity,” says Gent.

Revenue loss

The scale of SIM box fraud is driven by the easy availability of GSM gateway hardware and the range of different offers available from mobile network operators. “We have seen countries where tens of thousands of SIM cards are being used for illegal termination at any one moment,” continued Gent. “Operators are letting significant revenues slip through their shareholders’ fingers. Call quality can be severely reduced and standard features such as caller line identity are lost.”

Revector offers mobile network operators, regulators and governments a quick and cost-effective way to identify SIM box fraud so that they can suspend fraudulent SIM cards in real time, removing millions of dollars’ worth of fraudulent activity from their networks.

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