The Nigerian telecommunication industry has suffered severe financial hemorrhage ranging from validations of its infrastructures to multiplicities of taxes and now call masking, also known as SIM boxing among others.
Call masking is an act of concealing international calls coming into the country by presenting them as local calls, in order to make profits from the difference in price between international and local calls.
The act is often being perpetrated with small movable devices called SIM boxes, which are electronic boxes loaded with SIM numbers. “ A SIM box has capacity to receive and transmit calls undetected.
The menace of call masking and SIM boxing has resulted in several people missing opportunities with international business partners, relations, friends, associates and even students all because, the calls have been masked as local calls.
The Nigerian Communications Commission (NCC) recently disclosed that simbox or Interconnect Bypass Fraud (IBF) is one of the most prevalent fraud in the telecom industry today and estimated to be costing the industry about $3 billion in lost revenue.
Apart from that it has also caused pain, anger and anguish on telecom operators who are short-changed by the fraud.
According to NCC, call masking started trending since September 2016 when the Commission reviewed and implemented the termination rate for international inbound traffic from N3.90/min to N24.40/min.
“So, what is happening is a clear indication that some unscrupulous elements want to continue to fraudulently profit from the earlier lopsidedness in the international termination rate which we had before the 2016 review.”
Although there have been sanctions against telecommunications operators involved in call masking, SIM-Boxing and related fraud, still persists.
Masking is not peculiar to Nigeria, and no country has yet discovered the “silver bullet” to eliminate it completely.
The NCC, through its retired Director of Public Affairs, Tony Ojobo, had announced the barring of over 750,000 numbers assigned to several Private Network Links and Local Exchange Operator licensees that were discovered to be used in call masking.
The Commission gave the opportunity to service providers that had been sanctioned to correct the anomalies and convince it that they should be allowed to continue to operate in the country.
These menaces have reappeared, even more intensely, fuelling serious concern as a result of the negative impact to the industry and the economy at large.
This has prompted experts and stakeholders in the sector to call for fresh measures to tackle the challenge.
Besides threat to security, especially in cyberspace, revenue meant for government coffers are also blocked.
For instance, over 10 per cent tax on all calls, telephony and telecommunications services goes to the government but with call masking and sim boxing, the government is being shortchanged.
How it works
A masked call happens when an international calling number (Caller Line Identity) is masked as local number traffic.
For example, when a number is masked as a local call, an operator pays N3.90 ITR and not N24.40 ITR.
The process allows operators to terminate inbound international telecoms traffic as local calls, so they don’t have to pay ITR, which is the interconnection charge set by telecoms traffic carriers as carrier-to-carrier charges.
A SIM Box fraud is a setup where fraudsters install SIM boxes with multiple prepaid SIM cards.
The fraudster can bring calls through VOIP (through internet) and terminate international calls through local phone numbers in the respective country, to make it appear as a local call, by initiating the call through local SIM installed in the SIM box.
Apart from these illegal operators stealing from telecom operators, it has been noted that the Nigerian government and consumers are also victims of this fraud.
Explaining this in his presentation at the TCP event, a senior staffer at NCC, Mr. Ayoola Oke, said the fraudsters are not only stealing from operators, they are also stealing from government, because it’s when operators make their money that they will pay their taxes.
“Through the taxes, government is going to provide infrastructure which is of benefit to consumers. So, they are stealing from operators, government and consumers,” Oke said.
A telecoms expert, Kehinde Aluko, stressed that the menace of call masking and other vices were being fuelled by the huge difference between termination rates for local and international voice calls.
The development is therefore largely a ploy by perpetrators to illegally reduce their expenses while increasing their revenues.
“Decisive punitive action taken against one or two perpetrators would go a long way in serving as a deterrent.
Action in this regard could range from financial sanction to suspension, revocation of licence and prosecution for economic and financial sabotage, and perhaps even for threat to national security,” he said.
The President, National Association of Telecommunications Subscribers of Nigeria (NATCOMS), Chief Deolu Ogunbanjo, said there was no need to relent in reporting the menace to the right authority.
He said it could be a plan to ensure that gain accrued to some people. “I don’t know whether call masking favours the operator or is being done deliberately.
If they are still in the habit of doing it, proper sanctions should be meted out to any erring service providers.
There should be heavier sanctions. They can’t be short-changing subscribers and at the same time the government,” he said.
At a panel discussion in a recent event in Lagos, a senior executive at 9mobile, Chidozie Arinze, described call masking as a lucrative business for illegal operators. He said it affects everyone especially students who often miss opportunities with foreign universities they applied for.“The dangers of call masking are too many to mention.
It affects people’s business opportunities with foreign companies. Unfortunately, we’ve seen it rise tremendously in recent times to become a very lucrative business for those operating in it. However, we are doing a lot to counter it.
Maybe to give you a scale of what we are facing, let me categorically say that we bar no less than 1,000 numbers detected to be performing this activity daily. So, you can see it’s a lucrative business” he added.
Also commenting, a senior executive of MTN Nigeria, Olumayowa Oloyode, said since September 2016 call masking became a booming business as operators in the industry lose over 500, 000 minutes to 2. 5million minutes per day.
What NCC is doing to curb the fraud
The Executive Vice Chairman, NCC Umar Garba Danbatta, at the 85th edition of telecommunication consumer parliament, TCP, held recently in Lagos, noted that as part of its zero tolerance for fraud and its determination to stamp out the practice in the industry, the NCC in collaboration with different stakeholders and security agencies held series of meetings which led to the suspension of six interconnect exchange licensees in February, 2018.
However, he stated that despite the regulatory actions, masking of calls has persisted as telecoms consumers continue to express outrage over the menace much as security agencies constantly put pressure on the Commission to find lasting solution to the menace.
“Masking and SIM boxing are a bit like 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.”
In that regard, the Commission recently initiated moves to curb illegal activities of call masking, refiling and SIM boxing in the industry.
It was gathered that the NCC had given approval to five companies to present the evidence of the design of their software and equipment that could detect and prevent interconnect traffic bypass and SIM boxing activities.
In its compliance report, the NCC said, “In order to curtail these illegal activities, the Commission has issued approval to five companies to carry out ‘Proof of Concepts’ of their software and equipment that they claim can either block or completely stop call masking, call refiling and SIM boxing activities.”
Besides, the President, Association of Telecommunications Operators of Nigeria, Olusola Teniola, noted that one other option the Commission should consider, in curbing the illegal activities, was providing a single international gateway for operators.
“The NCC has several options on its table and one of them is a technology solution. That technology solution involves not only software but also a single international gateway that will be monitored, managed and controlled by the NCC, International Data Access operators, Major Network Operators, and other parties they feel will be beneficial to the proper operation and maintenance of the gateway,” he said.