NEW DELHI, India-Wireless network operators the world over are preparing to move from offering voice-only services to data and content-based services. The transition means they will have to install real-time, flexible, scalable billing systems capable of handling complex third-party environments. A bigger challenge is to make these billing systems fraud proof and fully secure.
Fraud in telecom networks is not a new phenomenon. In mature markets, fraud costs about 4 percent of revenues, while it can be as high as 10 percent to 15 percent in developing markets. Because these figures pertain to revenue loss due to non-payment or payment evasion, they can be categorized as billing fraud.
“The arrival of wireless Internet and new technology platforms such as GPRS (General Packet Radio Service) bring in more possibilities, as `content fraud’ can become a big issue. It offers great possibilities for fraudsters,” said Sudeesh Yezhuvath, chief executive officer (CEO) of the Bangalore, India-based Subex Systems, a vendor of fraud management systems (FMS).
“Content fraud” is related to stealing content. For example, if a user downloads music to a phone and finds a mechanism to avoid payment for that music, it can be termed content fraud. The losses are two fold-one for the connection time and one for the content.
“Network operators will initially control the content, but eventually it will be offered by third parties. So both (network operator and content provider) will have to be compensated. Therefore, 2.5G (2.5-generation) and 3G (third-generation) billing platforms will have to support multiple packet-based billing methods, including volume, content, source and destination-based rating. Traditional switch-based billing methodologies cannot support these requirements,” said Kenin M. Spivak, chairman and CEO of U.S.-based Telemac.
Billing vendors believe no system is completely secure and deploying separate solutions for the sole purpose of detecting and preventing fraud is a must in any wireless billing environment.
Subex’s FMS is one such product. It takes in feeds from the signaling system switch and produces alarms based on set criteria, such as suspicious use and high use. It runs parallel to the billing system and can find errors in the billing, including internal fraud, normally committed by employees and alliances. Users of FMS include U.S.-based Sprint, Canada’s Teleglobe, Econet Wireless of Nigeria and India’s Orange, Bharti and Escotel.
Subex has a billing verification solution that takes in feeds from the signaling system and then verifies them with the bill produced by the carrier’s own billing system and the inter-carrier billing records. This helps find leaks in these areas.
“FMS has helped us identify earlier bad debt cases from whom a recovery of 600,000 rupees (US$12,800) has already been made,” said Srivalsan Pillai, head of revenue assurance at Escotel. “Principally, the issue of customer fraud is reducing in intensity with tremendous growth of the prepaid market, and hence, the focus now equally is to deter and detect internal frauds.”
Telemac is taking a different approach. “Unfortunately, 1G and 2G wireless networks and handsets were not developed to be secure. Therefore, fraudsters have hacked into wireless systems for financial gain or simply for hacker sport. Anti-fraud measures should be looked at as an end-to-end process countering fraud at each and every turn,” said Spivak.
The company has built multiple layers of anti-fraud mechanisms into its solutions. Its patented network-independent billing solutions meter, rate, bill and settle within the wireless device. Telemac-enabled wireless devices can bill in real time by packet count, address and content.
“These billing solutions can create profitability, even for operators with low subscriber volumes. With the use of high-grade encryption and reconciliation programs, our technologies are highly resistant to fraud and are designed to detect and deactivate unauthorized use,” noted Spivak.
More than 9 million Telemac-enabled handsets are currently in use with wireless service providers in about a dozen countries.
Although operators are aware of the need to deploy fraud-proof billing solutions, it is not the main priority with most companies. Fraud solutions are often an afterthought. While fraud patterns in existing networks are well known, it is difficult to predict abuse patterns in 2.5G and 3G networks.
