The early impact of Roam Like at Home

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Vishal Gandhi, Associate Vice President of Product Management at Mobileum, takes a look at the pros and cons of the European roaming rules.

EU Regulation IV, which came into effect on 15th June 2017, was unsurprisingly welcomed by consumers as a major win in the battle against spiralling roaming costs when travelling. The legislation requires operators within the European Union (EU) to implement a ‘Roam Like at Home’ with fair usage policy for all of their roaming subscribers, designed to prevent abusive or anomalous usage of regulated retail roaming services by roaming customers.

However, the regulation was also expected to present EU operators with a number of significant challenges, with traffic volumes, revenue, retail rates, IT, fraud and abuse all predicted to be areas of concern.

So how have European operators coped in the early stages of implementation? Has the predicted increase in traffic materialised? Are compensating revenues being detected to make up for increases where they have been felt? How are IT systems handling any increase in volumes? Are early signs of fraud and abuse appearing? And have the large group of previously silent roamers become active users?

Mobileum recently conducted an in depth piece of research with operators across 28 EU states to investigate all of the above during the first month after roaming charges were abolished throughout the EU.

As was forecast with subscribers expected to lose their concerns around ‘bill shock’, volumes have increased, with 87% of respondents reporting a strong or very strong increase in data traffic. Similarly, Voice usage has also seen an increase (71%), although only half of operators highlighted an increase in SMS usage.

But the key question in relation to this is if such increases in usage have been enough to offset any loss in revenue for operators as a result of the introduction of EU Regulation IV. Responses to this were surprisingly somewhat mixed among our research, with more than three in four (76%) respondents stating that the usage increase they experienced was not sufficient to bridge the gap, but over a fifth (22%) highlighting the opposite. Of the latter group, there was a wide spread of countries, networks and network sizes, with the majority holding commercial roles within their respective organisation.

The EU commission stated that domestic retail rates shouldn’t rise to make up for this additional cost, but there are some reports of this happening in some EU countries. Indeed, over a third (35%) of operators responding to our survey indicated that they are planning on changing retail rates based on usage changes. This will undoubtedly be a temptation for operators once EU Regulation IV has had further time to bed in.

Respondents were somewhat mixed on whether wholesale rates dropped in line with retail rates, with 59% saying no and 37% yes. It will be interesting to review the interim report due to be published by the EU Commission in December 2018 on the effects of the new roaming rules in terms of if these costs have indeed been moved to retail plans.

When it comes to roaming abuse, over a quarter (26%) of EU operators said they had witnessed an increase or strong increase. Less (17%) reported a similar impact in terms of fraud at this early stage, with the majority in both cases unsurprisingly reporting no change. However, the generous fair usage policy does mean that it is becoming far more difficult for operators to watch out for abuse and fraud.

Fraudsters are undoubtedly going to be monitoring what loopholes have appeared and how they can be exploited. Given the arbitrage between wholesale interconnect rates for international calls terminating to EU vs. low retail tariffs for regulated calls in some EU markets, we may see a surge in frauds related to CLI filing and international SIM Boxes.

There has also been much debate about whether existing IT systems will be able to cope with the increase in traffic volumes following the implementation of EU Regulation IV. Anecdotally, there had been reports that a sizeable number of operators were adopting a ‘wait-and-see’ policy with regard to implementing new solutions to cope with the changes. A third (33%) of respondents to our survey said that their IT systems were not sufficiently coping, although further analysis is required in order to ascertain if this is related to abuse, fraud, fair usage policy tracking or other reasons.

We have identified a disparity between operators when it comes to the visibility of silent roamers. More than half (59%) stated that between 0-25% of their roaming customers remained silent, while over a third (34%) estimated it is between 25-50%, and just 7% seeing more than half of their roaming customers as silent. However, we would expect to see a significant portion of these silent roamers becoming active as subscribers get more used to the introduction of the legislation.

Overall, our data also indicates that there is not as pronounced a divide between Northern Europe and Southern Europe as may have been expected, with similar responses to questions regarding increases in traffic, compensation, rates and IT across the board.

While operators may have implemented fair usage policy for open data bundles, it is clear that they are finding detection and action on permanent roamers to be really complex in nature. This is an area that needs to be addressed, but for the long term we believe it is more important that operators focus on innovative roaming bundles for international roamers. Understanding customers via analytics, segmentation and dynamic/spot pricing is the key to grow roaming revenues.

Breaking the bottleneck of counter fraud management

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Joseph George, Senior Vice President of Fraud & Security at Mobileum, argues operators need to revise their approach to countering fraud.

We live in a golden age of data. For operators looking to counter fraud, there has never been more actionable information available at their fingertips, than there is now.

In theory, this is an amazing advantage for communications service providers (CSP) looking to stay one step ahead of increasingly sophisticated ‘fraudsters’, as well as gain insights that can help their business thrive in new service areas. A wealth of useful data, an increased ability to fight fraud, and a way to add to the bottom line all are all wonderful things for operators. However, this explosion of data has also created unforeseen challenges too.

Operators are reaching a tipping point, as the telecoms sector significantly expands its global services with faster broadband, 5G roll-out and more connected devices. Combined with the overall trend of traffic moving from voice to data networks, CSPs are facing huge challenges as many fraud management systems are buckling under the weight of trying to detect and act with the speed and accuracy needed to prevent potential revenue losses.

Simply put, many traditional fraud management systems can’t keep up with the sheer volume of data out there. It’s leaving operators staring at a mountain of overlooked (and underutilized) data, too much of a pain and inconvenience to be analysed thoroughly.

The root problem with many systems is that they can only handle limited datasets, not accounting for volume, variety and velocity of critical data. Also, modern capabilities and features are missing in older systems, including mobility, machine-learning, self-service analytics, and more visual and intuitive interfaces. In fact, some legacy systems still in use today by CSPs monitor fraud by only analysing aggregate records of calls.

There is a real, looming threat that fraud management is becoming a bottleneck, impeding CSPs’ ability to offer and expand services until fraud data can be interpreted and managed. Like a clogged kitchen sink, fraud management is creating a backup. Initially it might just cause a small pipe leak, but if operators aren’t proactive, they could have a full-blown burst on their hands.

That burst may be caused from the pressure of a mounting catalogue of services (and data) CSPs are involved in the delivery of, which they also need to analyse. Although outside their control, CSPs are often best positioned to identify instances of fraud occurring over carrier traffic on their networks. Examples of this include data fraud, international revenue share fraud and bypass fraud, among others. Along with the risk of IoT and sensor networks having fraudulent apps installed, the result is that the blind spots of many current CSP systems are being exposed by emerging sources of fraud.

So how can operators get ahead of the problem? How can they break this ballooning bottleneck, take advantage of that fact that they have access to vast amounts of data, and expand their services? The first step is to go beyond merely detecting fraud. CSPs should look inward, circling back and advancing their fraud protection tactics.

CSPs should have integrated, actionable and prescriptive control of fraud and abuse, based upon a combination of dynamically auto-configured business rules and policy control. By obtaining a high degree of detection accuracy, operators can get a clear understanding of the fraud data they are being presented with, and what it is telling them. With IoT for example, it means having an ability to uncover fraud outside of rule-based detection.

The implementation of predictive, big data technologies and machine-learning is a way to keep up with new frauds in real time, stopping it in its tracks. It also offers the added benefit of creating more parameters and making greater volumes of data available for analysis. All of this can be accomplished by employing a comprehensive multi-protocol solution that is nimble, fast and adds to an operator’s current system capabilities.

It’s no secret that the telecoms sector is significantly expanding its services and capabilities. But it’s the savvy operators who realize that breaking through the bottleneck of fraud data saves time and money in the long-term, and facilitates investment in new opportunities and services that otherwise would have been missed.

 

Joseph GeorgeJoseph George joined Mobileum in May 2017 as Senior Vice President, Fraud & Security. He leads the global strategy for solutions that help service providers control their risks related to fraud & security and prevent revenue leaks in their business.