Last year’s EU Regulation IV, which effectively abolished roaming charges by implementing a “Roam-like-home” policy for subscribers Europe-wide, has created dramatic increases in fraud for European telcos, according to a recent study.

The move, initially popular with subscribers, was less welcome for wholesale departments faced with further erosion of revenues and an increased exposure to arbitrage and revenue share fraud

In the study, at a basic level it was found that the expected increase in subscriber usage following roam-like-home, had not necessarily been sufficient to offset the loss from roaming revenues, with almost 1 in 4 telcos reporting a major deficit.​

In the study, at a basic level it was found that the expected increase in subscriber usage following roam-like-home, had not necessarily been sufficient to offset the loss from roaming revenues, with almost 1 in 4 telcos reporting a major deficit.​

However in the area of fraud, there was more pronounced concern as 26% of telcos reported an increase in fraudulent attacks, particularly IRSF (International Revenue Share Fraud). Whilst IRSF is nothing new, the newly created arbitrage between wholesale interconnect rates for international calls terminating to EU vs. low retail tariffs in certain EU countries, has created an obvious loophole for fraudsters to exploit.

Case study

A roaming agreement with (eg) an Italian operator is ‘Roam-Like-Home’ where the Visited Operator gets only a few cents per minute. However the visited operator must pay 0.56 / min to terminate on (eg) Lithuania Mobility Services.

The fraudster, using an Italian SIM roaming outside Italy (eg. Belgium), deliberately makes an inflated number of calls to Lithuania to exploit this roam like home agreement.

In the final step, the fraudster collects a revenue share through a third party, typically about 25% of the termination rate.​

This is not illegal and exploits arbitrage potential between roaming revenue and Termination cost

Widening the wholesale fraud conversation

Telco fraud teams traditionally focus on subscriber behaviours as the prime source for detection. However, in the post 2017 world, understanding fraud increasingly becomes a 3-way internal conversation involving Fraud teams, Wholesale interconnect and roaming teams, and Networks, all acting in concert to spot both the fraud attacks and the arbitrage opportunities that are driving the abusive parties to target them

With many years experience profiling wholesale data streams for unusual attacks and suspicious occurrences, plus proven expertise combatting arbitrage, cherry-picking and CLI Manipulation frauds, iCONX is expertly placed to help you. For more information, contact info@iconsolutions.com

http://telecoms.com/opinion/the-early-impact-of-roam-like-at-home/