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Business News of Friday, 25 November 2011

Source: Dowuona, Samuel Nii Narku

MTN loses over $9million to SIM Box fraud

MTN Ghana says it lost over US$9 million to SIM Box fraudsters between March and October this year alone.
A highly-placed source at MTN said the amount represented revenue for 70.48 million minutes of calls from overseas meant for MTN numbers but were fraudulently routed through SIM Boxes and made to appear on the MTN network as local calls.
The source who pleaded anonymity due to the sensitive nature of the information noted that for the US$9 million MTN lost, government also lost over US$4 million in taxes.
“So the total loss more than US$13 million,” the source said.
The source explained that prior to March, MTN received about 50% of all international inbound calls to the country, but direct international calls to MTN dropped by a whopping 15.7million from 49.18 million in March, 2011 to 33.48 million in October, 2011.
It said most of those millions of calls were terminated on MTN as local calls through SIM Boxes containing the SIM cards of ‘less vigilant’ telecom operators in Ghana, particularly Airtel.
When SIM boxing started in Ghana all four GSM operators, particularly Vodafone and Airtel were vulnerable; but in recent times, MTN, Vodafone and Tigo numbers have virtually disappeared from the SIM boxing activity.
Airtel numbers continued to be used massively by SIM Box fraudsters to terminate inbound international traffic, and the other telecom operators said it is worrying.
Figures from the National Communication Authority (NCA) indicate that in September, 2011 alone, it detected 5,454 SIMS being used for SIM boxing, out of which only 21 (0.39%) were Vodafone SIM cards, 64 (1.2%) were MTN and Tigo SIMs combined, and the remaining 5,369 (98.44%) were Airtel SIM cards.
Vodafone said it saved GHc6.1million in revenue in the first six months of 2011 from interconnect fraud and had suffered actual revenue losses of GHC257,000 over the period.
“Since the big arrest last month Vodafone SIM card usage in SIM boxes has reduced by 93%,” the company said.
The MTN source told Adom News that for the 70.48 million minutes that MTN lost to SIM Boxing, the local network through whose SIM the calls were routed as a local call benefitted.
Airtel charges 8.4Gp per minute of call, so if international traffic meant for MTN is routed through Airtel numbers by SIM box fraudsters to terminate that 70.48 minutes of international calls, Airtel would have made some GHC5,920,320 and paid MTN 5Gp per minute, which comes to GHC3,524,000 and Airtel keeps the remaining GHC2,396,320 of money that should have gone directly to MTN.
In bound international call rate has been fixed at 19 cents (31Gp) per minute, so 70.48 million minutes of calls lost comes to over GHC21.8 billion of money that could have gone to MTN.
But the source said beyond the money being lost, it is also making it difficult for customers to call back when they miss calls from relatives, friends and business partners abroad, because the number that appears on their phone is usually an Airtel number and not the original overseas number that made the call.
When Adom News reached Airtel for their response, Revenue Assurance Manager at Airtel Ghana, Nixon Wampamba said Airtel was attractive to SIM Box fraudsters because of the affordability of their tariffs.
“Since we launched our 8-8 flat tariffs the SIM Box fraudsters have gravitated to Airtel, so maybe if any telecom operator beats our rates, then they may also have the SIM Box fraudster gravitating towards them,” he said.
On the issue of making money that should have gone to other networks, Mr. Wampamba admitted that was so, but pointed out that Airtel did not set up the SIM Box fraudsters so it would be unfair to hold Airtel responsible for their activities, adding that Airtel was also losing up to about US$300,000 a month to SIM Box fraudsters.
He pointed out that in locations where SIM Box fraudsters operate, Airtel’s customers suffer congestion and are not able to make calls, and that has revenue and image implications for Airtel.
That could be a reason for why Airtel was slapped with the highest congestion charge of GHC350,000 by the NCA.,
Mr. Wampamba said the point about Airtel not being vigilant enough was also not correct because the NCA had done an audit of Airtel’s SIM Box fraud combat system and they (NCA) were very happy, adding that the Minister of Communication has also commended Airtel for its efforts at combating SIM boxing.
“We use the same methods the NCA uses to detect SIM Box numbers and we deactivate them as and when we find them.
“It is true that our SIMs still remain the most attractive to fraudsters due to affordability, but I can tell you that over time the NCA’s detection of Airtel numbers in SIM Boxes has reduced from about 500 a day to 100 day – a clear sign that we are winning against the fraudsters gradually,” he said.
Mr. Wampamba assured the public that Airtel would start communicating to the public more on what it is doing to combat SIM Box fraud to allay people’s fears and anxieties.

Samuel Nii Narku Dowuona