MTN Cuts Losses To Simboxing But…

MTN Ghana is reporting heavy reduction in revenue losses to simboxing but still insist that the single best solution to the canker is for the 19 cents minimum per minute of inbound international traffic to be removed.

CEO of market leader MTN Ghana, Serame Taukobong recently told journalists at a stakeholders forum that losses to simboxing on MTN has reduced drastically from $800,000 to just about $100,000 a month. And there is still a downward trend.

About a month ago MTN reported it was losing an average of about GHS34million to SIMBOX fraud every year and the tax component government lost was GHS16million.

But Taukobong said MTN employs very costly and tedious strategies to fight simboximg to save the country money, and yet there is an “unfair” charge and public perception that telcos like MTN are actually engaged in simboxing.

“Simboxing is costing both the telcos and government revenue and we employ a wide range of processes and strategies that cost us not less than $100,000 every month fighting it,” he said.

He said MTN uses a combination of three main methods of bypass fraud detection and prevention, which include call generation, data mining, and automated tools to fight SIMBOX fraud.

Some of the measures that MTN Ghana has employed to combat bypass fraud include the following:

• Active Detection – MTN Ghana is utilizing the services of two international vendors (SIGOS, and RAPTOR) that make test calls that help the MTN detect SIMboxes.

• Passive Detection – MTN Ghana uses an analytical system (FraudBuster). This analytical system has intelligent algorithms that are able to identify if the call behavior is from a SIMBOX or not.

• SIMBOX Location – MTN Ghana has employed the services of an external vendor (LATRO Systems) to locate and disable SIMBOX operations.

• Automated Blocking – MTN Ghana has employed automated systems that interface with the detection system to block detected SIMBOXes within 5 seconds for on-net (MTN to MTN call) and within 5 minutes for off-net (Other Network to MTN call).

• Simplified Fraud Reporting – MTN Ghana participates in the industry fraud reporting arrangement that allows the public to SMS suspected SIMBox numbers to operators through the shortcode 419 and email address [email protected] for customers to report fraud including sim boxing.

The CEO said “MTN believes the only way to completely stop simboxing is to remove the 19 cent floor price for incoming international traffic and discourage the fraudsters from investing in it,” he said.

Taukobong explained that in countries like Côte d’Ivoire and others where there is high floor price for inbound international traffic, there is not arbitrage because the local call rates are also high so the SIMBOX operators have no incentive to cash in on.

But in Ghana, there is a huge arbitrage because local call rates are as low as 15Gp per minute maximum and the floor price for incoming international traffic is 19 cents, which is over 67Gp, so there as much as 52Gp for simbox fraudsters to cash in on.

The MTN CEO also noted that in countries like Nigeria and South Africa, where local call rate is either the same as or higher than incoming international call rates, Simboxing is zero, which is a clear indication that the best way to stop it is to remove the arbitrage.

He contended that whereas MTN is chalking success in reducing losses to simboxing, that does not necessarily translate into revenue gain for MTN and the state because the bypass traffic being detected are still traffic that came through the bypass route and not the approved gateway.

“We believe if the 19 cents is removed, traffic volumes through our gateway will increase and taxes to government will from the international front will go up and the SIMBOX operator will go out of business over time,” he said.

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