Solving a potential major industry pain that is costing 3G and GSM mobile operators millions of dollars each year is what a new company called Revector is focusing on according to its founder Andy Gent.

The light side of Voice over IP (VoIP) services are they have brought real competition to the rather staid telephony business. VoIP has destroyed the old and rather lucrative way of charging for a telephone based on distance, so that these days all charges are pretty much based on flat rates.

What has enabled this is the ability to use IP data networks – whether they be the private IP networks of carriers or the public Internet – to bypass the highly structured commercial settlement regimes of the old Plain Old Telephony Services (POTS) telephone monopolies. You only need to look at what AT&T is up to as described in Are voice (profits) history? to see VoIP’s impact.

Even carriers themselves did this. If international voice traffic could be buried or hidden in IP connections, it was possible to significantly reduce both transit costs and avoid settlement out-payments. The strategy of many carriers was to siphon-off traffic growth onto IP networks to cap regulated out-payments to other carriers. In parallel with this we saw the launch of hundreds of companies (see some here) launching VoIP services around the world to take benefit of the ease of setting up simple voice bypass services. Inevitably their raison d’etre was to offer extremely low international call charges.

Although these services are loved by the consumer, they are hated with a passion by fixed line and mobile carriers as they are seen to be ’siphoning off’ their revenues by exploiting differences in termination charges. Of course, many a consumer would say that this is a good thing as it has forced a highly resistant industry to accept change and that is what a disruptive technology is all about.

A graphic from Revector’s web site

As is shown in one of Revector’s graphics, there is a plethora of companies setting up grey services by deploying GSM gateway boxes or SIM boxes to act as interfaces between IP and GSM networks. A SIM box is a small ‘plug-in and work’ box that contains a mobile SIM card that is connected to a PBX or router. It can automatically reroute a call that would take place on a mobile network to a lower cost fixed or IP network.

SIM boxes are installed on mobile or fixed operators’ networks without the permission of those operators (hence my use of the term grey services) and are used to terminate low cost IP based voice services without the local carriers knowledge. Instead of a SIM card being associated with a single subscriber, it acts as an egress pipe for multiple subscriber calls pouring in from other countries.

This is where Revector comes in. It offers a mixture of technology and analysis that can help local operators detect this grey area loss of revenue. They have deployed robots in a number of countries that are able to detect a SIM card that is being used for nefarious purposes in real time. Once detected , the local operator can terminate the SIM card contract accordingly. Revector augments automatic detection by robots with a thorough analysis of carriers’ call records to detect bypass-route call patterns that could indicate SIM box use.

According to Revector, “global losses due to telecom fraud have reached $35-$40 billion annually and fraud rates are growing between 11% and 25% annually against a rate of between 3% and 8% for the telecoms industry itself.“

In many ways, this activity is pretty much unstoppable as it so common and so easy for a terminated service to restart by just buying another SIM card. However, this fact could prove to a real boon to Revector as its source of revenue never, ever, goes away!

Addendum: Companies who offer SIM box detection services are:

• Revector
• Sevis Systems
• Meucci Solutions
• Araxxi

Addendum #1: Chaos in Bangladesh’s ‘lllegal’ VoIP businesses
Addendum #2: the-crime-of-voice-over-ip-telephony in India/
Link:                     GSM Gateways: The Quiet Crime