Sim Box Fraud

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 Agenda

 What is Gateway Bypass?

 Gateway Effect?

 What is Sim Box?

 Routing.

 Revenue gain v/s Revenue Loss.

 Problem with Sim box fraud.

 Detection Method.

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 Gateway Bypass

International Carrier
Country A Country B

VOIP Internet
Gateway GSM
Gateway

Grey routing, Toll bypass, Simboxes

GSM gateways or Hedgehog operator

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 Gateway Effect

Bottom line revenue Customers Government

Capital Losses
Management Time
Quality Mobile
-Miss
direction Operator
-Delays Other Mobile International
-Voice Providers gateways
-CLI

Fixed line
operator

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A Typical Sim Box Operator
Infrastructure needed
An internet connection
-1Mb allows for +- 60
concurrent calls
-DSL
-VSAT (satellite)
-Datacenter
Router to connect to internet
GSM Gateway to convert calls
into mobile calls
SIM cards

Typical companies
Small 2 person operations
Carriers sometimes also deploy
SIM Boxes
Some companies use PBX also
for terminating traffic

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 Sim Box
SIM Box operators exploit the difference between
-Termination Rate, eg 0,15€ per minute (often regulated)
-Cheapest retail rate, eg 0,10€ per minute
-SIM Box operator sells just below termination rate
SIM Boxes bypass the regular interconnect
SIM’s are used to terminate third party traffic

0,10€ Your network

0,14€ Air interface
Retail
SIM Box operator
Transit ?
Interconnect Bob
Termination
0,16€
Regular Transit 0,15€

Corporate SIM Boxes use SIM cards in PBX to terminate

corporate traffic

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 Routing
How does a SIM Box operator collect traffic?
-Many transit carriers connect to the internet for low cost internet
VoIP routing
-SIM Box operator presents himself as carrier
-Many transit carriers do least cost routing

Transit Internet
carrier VoIP
Originating Destination
Operator
 Fix
 Mobile
 VoIP
Transit
carrier

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 Revenue gain (Sim Box Business)
Costs Revenues
Capacity of GSM Gateway 60 channels Sales capacity per month 540.000 monthly
Max # simultaneous calls 60 channels # Channels 60
Capacity per call 16 Kb/s Average usage per day per channel 5 hours
Bandwidth required 960 Kb/s Total traffic per day 18.000 minutes
Traffic per SIM per month 9.000 minutes
Internet connection € 1.000 monthly
Capacity 1 Mb/s Revenues € 75.600 monthly
Fee € 1.000 monthly Revenue per minute € 0,14
Revenue per mth € 75.600 monthly
Equipment € 3.333 month
Gateway + router € 40.000 one off Cost of sales € 54.000,00 monthly
Depreciation 12 month Cost per minute € 0,10
Cost per mth € 54.000 monthly
SIM Subscription cost € 900 monthy
# SIM's 60 Gross margin € 21.600 monthly
Subscriptions € 15 monthly

Total monthly fixed cost € 5.233 monthly

Margin € 16.367 monthly

•In case of 25euro/mth flat rate subscription with 0,10 euro revenue per
minute, margin becomes 50.000 euro/month!
•In specific cases, a 24 month contract for a flat rate subscription turns out
profitable for the SIM Box operator in less than 2 weeks
•A 0,03 euro delta between Mobile Termination Rate and best available retail
rate is the minimum to make a profitable case
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Revenue Loss (Mobile Operator)
Fraud management approach
# SIM's used in GSM Gateways
Average usage per day per SIM
Total traffic per month
Retail revenues
Revenue per minute
Revenue per mth
Interconnect approach
1000 Terminating interconnect traffic 180.000.000 min. per mth
5 hours
9.000.000 minutes % from domestic mobile or incumbent 75%
(assumed terminated correctly)
€ 900.000 monthly % from other destinations 25%
€ 0,10 % of that terminating via GSM Gateway 20%
€ 900.000 monthly % of total traffic terminated via SIM box 5%

Missed interconnect revenues € 1.350.000 monthly Traffic terminating through GSM Gateway 9.000.000 min. per mth
Cost per minute € 0,15
Cost per mth € 1.350.000 monthly Termination rate € 0,15 per minute

Total loss € 450.000 monthly Interconnect revenue loss € 1.350.000 monthly

•SIM Box operators are great retail customers!?

-High traffic
-Always pay on time

•In case of flat rate retail offer, loss can run as high as 1 million euro per
month
•Losses due to quality issues or additional radio network costs not included
•Direct bottom line loss

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 Problem with Simbox Fraud
•Loss of revenue
•Call Line Identification Presentation (CLIP) is turned off
•Gateways have limited capacity (rejection of calls)
•Longer time to setup the call
•Gateways are placed geographically on the same cell-site
•Radio planning is made difficult
•Police investigation is not possible

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 Detection & Solution Method
•A-numbers with calls to many different B-numbers and other
characteristics

•Matching of Roaming call and Sim Box call to the same B-number

•Call from different countries to SIM-card where the CLIR is removed on the
HLR

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 Thank You!

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