How can operators merge fraud

in a full IP environment?

London, 20.03.2012

Stefano Maria De' Rossi

GRUPPO TELECOM ITALIA

Daniele Gulinatti

What individuals

do on mobile ?

COMMUNICATE

• voice

• sms

Once upon a time:

New generation Telecom environment

What

individuals do

on mobile ?

COMMUNICATE

• voice • sms • email

FIND • info/answers • places • products • people

ENJOY • photos/video • music • games • networking

DO • documents • Banking • Payment

The future of mobile

Pressure is on for service providers to keep pace and meet the tough demand of an

always connected lifestyle

Industry Key points

8

Voice is still the main share of revenues for operators (ca. 70% ) but trend is falling:

CAGR estimated between – 0,2% and – 1,2% with geographical exceptions (eg.

emerging markets)

Voice (fixed and mobile) is declining in favor of IP based communications models:

VoIP and social communicationn (OTTs)

Source: Gartner (Aug 2011): WW Telecom Services Revenue Comparison

Industry Key points: Market Trends - Worldwide

Total mobile service revenues are increasing WW, driven by the mobile data

revenue growth - that is due to the spread of new data hungry devices,

smartphones and tablets and to the spread of apps platforms (Apps for iOS, Android

etc.)

Sources: elaboration of Ovum “Mobile Voice and Data Forecast: 2010–15”, February 2011 (based on GSMA data) elaboration of Gartner “Forecast: Mobile Services, Worldwide, 2007-2015, 1Q11 Update”, March 2011

Industry Key points: Mobile Internet market Trends

Source: Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2010–2015, February 2011 Cisco, Global

Global mobile data traffic will increase 26-fold between 2010 and 2015. Mobile

data traffic will grow at a compound annual growth rate (CAGR) of 92% from 2010

to 2015, reaching 6.3 exabytes per month by 2015

Expected market evolution

Riding the data tsunami

Challenge ahead

Traffic volumes on mobile networks are

growing much faster than the revenue they

generate for mobile operators –this results in

operational and financial pressure for telcos

for upgrading their networks to higher

capacity and coverage.

Increasing competition, regulatory

pressure, and the proliferation of flat-rate

pricing for data services puts enormous

pressure on their margins.

Two vital questions

How can operators manage the huge increase in

data volumes?

And where will the money come from to build the

networks needed to handle the coming data tsunami?

Or in other words…how to monetize the service level

on the networks ?

Two vital questions

How can operators manage the huge increase in

data volumes?

4g on the horizon: LTE overview

In order to ensure their network capacity, Telco Operators are investing in network expansion, or deploying new network technologies, such as Long Term Evolution (LTE).

• LTE is the next step in the evolution of the Third Generation

Partenership Project (3GPP).

• Designed to meet the high speed data and multimedia transport

needs of Operators.

• Benefit for users are:

•Higher data Rates

•New service

•Truly Mobile Broadband

LTE specification

LTE has 10X users per cell than

HSDPA

HSDPA LTE

14 Mbps DL

5,7 Mbps UL

100 Mbps DL

50 Mbps UL

Voice in LTE

Voice in LTE is a disruptive moment for the Industry: not a technology evolution

but a revolution

Industry evolution: opportunity or threat ?

Industry Hot Topics – Value of Core Services

The shift to an “All IP” network paradigm (LTE) will make voice a data application (VoIP) which may impact on present termination, interconnection and roaming business models.

OTTs players are offering on the global marketplace voice and messaging services through apps (Viber, Skype, Whatsup) based on free business models.

Defend Voice Business from OTTs providing voice as a “one more app” concept is key to protect margins and sustain investment capacity.

In search of outcomes: GSMA perspective

IMS

voLTE

FIRM

RCS

Two vital questions

How can operators manage the huge increase in

data volumes?

And where will the money come from to build the

networks needed to handle the coming data tsunami?

Or in other words…how to monetize the service level

on the networks ?

Telco battlefield

In order to move away from flat rates and offer more advanced data pricing models, new monetization models are needed requiring integration between:

POLICY

MANAGEMENT

CHARGING

CAPABILITIES

Mobile business: surfing data opportunities

The apple experience

If consumers are willing to pay a premium for the Apple experience,

why wouldn’t they be willing to pay for the higher-quality experience

from telecom operators?

Mobile Technological evolution while protecting profitability

New types of threats and frauds are on the rise

Telco market: new services trend

Changes in the telco world are affected by radical evolutions starting

from new technologies up to new services linked to different markets

(Internet, media, banking).

The world of fraud at a glance

SUB POINT

New &

Emerging

Fraud

Telecom fraud

Traditional

Fraud

Telecom fraud

Traditional

Fraud

International Revenue share Fraud

Subscription/Identity Theft

Interconnect/By-Pass Fraud/call reselling

Dealer Fraud

Pbx Hacking

Incoming call bonus abuse

Commercial offer abuse (equipment)

Traditional fraud

New &

Emerging

Fraud

Telecom fraud

Non Authorised Content Broadcast

Distribution of Illegal or Unwanted Content

P2P Content Reselling

Video Share

Mobile/ Smartphone Malware

Consumption of Network Resources with no revenue or ability to bill

Change of billing model making it impossible to bill

ID Spoofing (Access and Services Identity)

New & Emerging Fraud

2011 CFCA Survey

We have to think differently …

34

M2M Fraud

• Tampering with unattended devices

• SIM Swap Cloning

• Malware

• Denial of Service

• Unauthorised access to data

• Rule based - HUR, Overlap, Velocity, Invalid service usage etc

• Profiling – monitor deviation from accepted usage patterns

• Real-Time controls – using in-line rules, tariff checks and policy controls to bar unauthorised services, or alert device owners

M2M Fraud Counter-Measures

New challenges …

36

Fraud Management issue on a NGN

• Knowledge on NGN network Fraud

environment

• Specifics on potential points of attack

• Specifics on what information is available

from key points

• Information correlation necessary

• New detection techniques

37

Detection issue on a NGN

• Correlation of data from multiple sources, e.g.

• Bearer / IMS Session

• PS Core records (actual data usage)

• Content data / merchant information

• Payment processes – separate records to the

transaction records

• Much larger volumes of data

• Variety of identifiers

• Subscribers may be victims rather than

perpetrators

38

Impact on the Fraud Management System

• Map out FMS touch points

• Need for complex event correlation

• Appropriate systems for „Big Data‟ analysis

• More effective rules management

• Invest in the right tools

• Context based usage checks and profiling

• FMS system flexibility

Key takeaway

As an industry we need to review the structure and design of our

fraud teams in order to ensure maximum effectiveness and delivery

for our organisations.

In order to target success in our fight against frauds we must ensure

we have:

Appropriate Structure

Correct focus & strategy

Appropriate skill sets

Appropriate tools

Develop fraud awareness

Exchange intelligence & best

practice

Assess the fraud exposure of

new services

Collaborate with other GSMA

working groups and projects

STEFANOMARIA.DEROSSI@TELECOMITALIA.IT

DANIELE.GULINATTI@TELECOMITALIA.IT