Reports show that mobile operators and governments are losing up to 150 million US dollars every year to Fraudsters who illegally terminate international calls as local calls. This is the new headache that mobile operators are now facing, something that might drag the mobile industry’s developments in Africa.
In an interview with HumanIPO, Safaricom’s Head of Regulatory and Public Policy, Stephen Chege, gave the figures and effects that this practice has on the industry. ‘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.
“As mobile operators, we have paid for licenses, invested in the network infrastructure, and we pay taxes. On the other hand, these fraudsters have not incurred any of these expenses, and therefore, can afford the luxury of offering as low as 0.037 US cents per minute, to terminate calls to our local networks.” Stephen told HumanIPO.
In Kenya alone, the government and operators lose 12 to 15 million minutes worth of revenue to this SIM box fraud. This is approximately US$440,000 per month! In Ghana, the situation is not any better. Their government reported SIM box fraud has cost them US$5.8 million in stolen taxes alone.
“All they (Fraudsters) need is a SIM box that can store up to 800 SIM cards, target networks offering cheapest rates and free offers, and a small office in town, to offer these services.” Stephen added.
So, what is being done to deal with this problem? “We as the operators are forced incur unnecessary expenses in buying software, software licenses, and basically, purchasing a whole application to detect and block these illegal call terminations. We are also forced to employ additional dedicated staff to deal with this malpractice.” Stephen responded.
This is also costing operators a lot of money, in blocked SIM cards detected carrying out the scam. “The cost of producing one SIM card is quite high, and if this SIM card is not used in generating revenue for the business, then the company incurs a lot of loses.”
Stephen added that the government can help by making it mandatory for operators to have equipment to detect this fraud, and also back it up by arresting the offenders and making sure that they are penalized for their malpractice, as a deterrent to others.
So, is there something that Africa can learn from the US and the rest of the world? Well, several private companies have identified this problem, and have stepped in to offer SIM box fraud tracking services to mobile operators. An example of such a company in the US is Sevis Systems. Mobile companies in America therefore, do not need to incur expenses in active monitoring of SIM fraud, but simply pay a subscription fee to such services, rather than waiting on the government to deal with the problem.
Recently, Airtel Ghana announced the introduction of short code, 919, that customers can use to report SIM card fraud. This is an indication that the crime is now becoming rampant and most operators are now working together in concerted efforts to stamp out the problem.
