BUSINESS

Call masking, SIM boxing blues

May 5, 2020

If you receive a lot of foreign calls, chances are that quite a few of them have reached your handset bearing a local global system for mobile communication (GSM) or fixed line number. In industry parlance, what you got is called a “masked call”. What has happened is that your foreign contact has called you directly with their number, but someone has manipulated something somewhere between you and your caller, changing the caller’s number to the strange local number you see on your handset.

SIM Boxing

SIM Boxing or Interconnect Bypass Fraud is one of the most prevalent frauds in the telecom industry today. It happens when calls made via the internet are sent to Simboxes (machines that house SIM cards), which redirect this illegal voice over internet protocol (VoIP) traffic onto mobile networks.

Call masking

A call is masked or refilled when a number is deliberately classified to a different route and SIM boxing to describe one of the many tools in use) has many dimensions.

Acording to experts, in the first scenario, the perpetrator is somewhere between the two networks. Telecoms is a game of volumes, and some players have positioned themselves as middlemen who aggregate huge volumes of traffic bound for the country from several operators around the world. To make their margins, they compress the calls and strip them of their original numbers before terminating them on local networks.

“In another scenario, the calls reach Nigeria in their original form (i.e. with calling line identity), but are masked or disguised by a local player who presents it to the terminating network as a local call. Thus disguised, the perpetrator pays the local player the lower domestic interconnection rate and pockets the differential between this and the higher amount he collected in foreign exchange. Call masking is complicated and widespread. Just like Nigeria, other countries are fighting the menace, deploying several regulatory, economic and technology tools.

Analysts said the two are similar to virus attacks – perpetrators continue to devise complicated strategies; and as regulators and other stakeholders deploy “anti-masking” “anti-virus” solutions, they try to up their game.

The CEO, NCC, Prof Garba Danbatta described call masking as a phenomenon, whereby an international call is masked to appear as a local call on any GSM network in Nigeria while SIM Boxing on the other hand refers to electronic boxes or devices with multiple SIMs that have the capacity to terminate calls at local interconnect rates.

He recalled that SIM Boxing started at the time the Commission decided to review international termination rates from N3.90 per minute to N24.40 per minute for international inbound traffic, which provided an opportunity for technology manipulators to terminate calls at N3.90 per minute and cart away the difference, thereby cutting the revenue meant for the operators and by implication the government. A SIM box, he explained, has capacity to receive and transmit calls undetected.

“However, the challenge is that these SIM boxes are never type-approved by the Commission, an indication that they are being used illegally in the country,” he had said.

Interventions

Determined to end the twin evil, the NCC had, vide a letter with Ref: TSNI/GEN/VOL.4/115, directed relevant licencees to ensure the cessation of call masking or refiling activity on their networks. A deadline was set. Furthermore, on August 3, 2017, at a stakeholders meeting organised by the Commission in which the affected companies participated, it was resolved that a comprehensive investigation would be carried out by the NCC to determine the companies/licences involved in the illegal act.

Licencees were warned to desist from the practice. It was also agreed that identified culprits would be sanctioned as part of measures to forestall the negative impact of this incidence on national security.

After investigation, the NCC, in a letter dated January 12, 2018 signed by Head, Legal and Regulatory Services, Yetunde Akinloye and Head, Compliance Monitoring and Enforcement, Efosa Idehen, on behalf of the CEO, NCC, issued the Notice of Intention to Suspend licence pursuant to Section 45 (1) and (3) of the Nigerian Communications Act of some culprits found wanting. Notice of intention to suspend the interconnect exchange licences granted to six telecoms clearing houses over call masking were issued.

The firms were Medallion Communications Limited, Interconnect Clearinghouse Nigeria Limited, Niconnx Communication Limited, Breeze Micro Limited, Solid Interconnectivity and Exchange Telecommunications Limited were given p to January 31, 2018 to state reasons the regulator should not suspend their licences. The NCC’s letter read: “Having carefully analysed all the relevant data collected in the course of its investigation activities, the commission has established a direct and indirect evidence against your company in the illegal and unwholesome activity of call masking and refiling.”

It added: “Consequently, the Commission, pursuant to Section 45 (1 and (3) of the Nigerian Communications Act, 2003 hereby gives you Notice of Intention” to suspend your operational licence.

A major operating licence was subsequenty suspended in February 2018. Although the suspension of Medallion Communications Limited was later lifted (since it fulfilled the requisite conditions), sector analysts said it was a landmark decision.

Other clearinghouses got censored while some were disconnected from the network pending compliance with regulatory requirements.

The Office of the National Security Adviser (ONSA) and the Department of State Services (DSS) were involved in all these.

SIM registration processes across networks was also tightened. A broad-based Task Force to deal with the shortcomings of the process was established, while the Force made far-reaching recommendations being implemented now.

There were also technical interventions, which included the barring of about 750,000 numbers assigned to 13 operators from the network. This numbers were suspected of being used for call masking and NCC took a hard stance to withdraw their use.

Cost to economy

According to experts, SIM boxing fraud costs the industry to lose about $3billion in revenue.

The Federal Government loses significant revenue from taxes due from operators (Nigeria does not charge surtax on international calls). The local terminating network loses significant direct and indirect revenues (for example, from the opportunity cost of masked transactions). Consumers lose from quality of service and trust while the work of law enforcement and security agencies are greatly compromised because of complexity in call tracing.