Telecom Lead India: Wholesale carriers have lost an estimated $6.12 billion to fraud in 2012.
Over 82 percent of respondents believe the number of cases of fraud has increased in the wholesale market in recent years, according to a survey by BSS solutions provider Subex in association with Capacity Media.
Large tier 1 and tier 2 carriers are reporting higher financial losses due to fraud, with 35 percent and 40 percent of them respectively losing more than 2 percent of revenue.
77 percent participants agree that the impact of fraud on revenue margins and quality of service has heightened focus on fraud.
The report identifies the most prevalent different types of fraud in the wholesale carrier market, with False Answer Fraud being the highest at 55.71 percent.
A large volume of fraud is related to immediate partners, which includes New Operators – Credit Risk (51.4 percent), False Disputes (30.7 percent), Blending HQ Routes (31.4 percent), Long Firm (7.1 percent).
This indicates carriers will perhaps benefit from more stringent due diligence both during partner on-boarding as well as on an ongoing basis. The survey also shows that internal fraud is on the rise, with approximately 13 percent of carriers reporting losses due to internal fraud.
The survey reveals that the industry is opening its eyes to the growing issue of fraud, with 77 percent of respondents reporting that pressure on margins has resulted in an overall increase in awareness or focus on fraud.
35 percent of wholesale carriers have dedicated fraud management teams, with an even lower 25 percent of wholesale carriers collaborating via dedicated fraud forums.
While nearly 80 percent of wholesale carriers use in-house developed tools for fraud detection, more than two thirds of them report a lack of automation and timely availability of data as hindering their fight against fraud.
Vinod Kumar, COO, Subex, said, “Sitting on the fence is no more an option else carriers will see fraud continue unabated and eat into margins which are already under pressure. The aim of this report is to increase awareness within carriers and help them prepare in their fight against fraud.”
Wholesale Carrier market is estimated to be around $170 billion and the survey results indicate that carriers are estimated to have lost $6.12 billion to fraud last year alone, raising the question is fraud an issue carriers can any longer afford to ignore?
