NSA’s probe uncovers ‘big telco’ in call masking fraud

One of the four big mobile phone companies in Nigeria has come under security scrutiny following an investigation by Office of the National Security Adviser into call masking fraud in the telecoms industry.

Technology Times learnt that the affected operator (identity withheld) was discovered to have illegally brought in international telephony calls and passed them off as local calls to receivers in Nigeria to avoid paying relevant taxes to government.

Call masking, also known in telecoms parlance as call refilling or call dumping, happens when an operator brings in international traffic into a country and terminate them as local calls by making such calls display a local number on the phone of the receivers.

The Nigerian Communications Commission (NCC), the telecoms regulator last year declared call masking and allied fraudulent telecoms activities that bypass interconnect payments as “one of the most prevalent frauds in the telecoms industry today and it is estimated to be costing the industry $3 billion in lost revenue.”

Mohammed Monguno , a retired Nigerian Army Major General and current NSA waded into the probe of call masking activities in the telecoms sector.

The Nigerian Communications Commission (NCC), the telecoms regulator last year declared call masking and allied fraudulent telecoms activities that bypass interconnect payments as “one of the most prevalent frauds in the telecoms industry today and it is estimated to be costing the industry $3 billion in lost revenue.”

But beyond the revenue loss, the NSA’s Office waded into the call masking fraud estimated after it was also declared a major national security threat in the wake of security challenges in the country.

The affected GSM operators was said to have become a key subject of interest after an independent investigation sanctioned by the NSA’s Office showed unusually high rate of international calls that bypassed the regular interconnect route, people conversant with the situation told Technology Times .

Another development that attracted the curiosity of investigators was that the unusually high transmission that tended to bypass these interconnect route suddenly dropped when the affected operator became aware of the independent probe by the NSA’s Office.

Mohammed Monguno, a retired Nigerian Army Major General and current NSA waded into the probe of call masking activities following concerns raised within the top hierarchy of government over its security implications and threats posed to national security of the country.

While call masking and allied fraudulent activities have become prevalent in the Nigerian telecoms industry by erring operators to bypass payment of international interconnect rates that should have accrued to the government, its declaration as a national security threat has taken the matter beyond the purview of NCC, the telecoms regulator.

Technology Times file photo shows Professor Umaru Garba Danbatta speaking to Media Executives at a breakfast meeting in Lagos

Following the classification as a major national security issue, the Office of the National Security Adviser has sanctioned a major probe that involved other security agencies including the DSS to unmask the culprits behind call masking in Nigeria.

The telecoms sector contributed 8.39% to Nigeria’s GDP at Q3 2018, according to the regulator’s data that showed the four Big GSM networks accounting for 111,632,516 active phone connections at the end of last year.

Professor Umar Garba Danbatta, Executive Vice Chairman/ CEO of NCC, said last year that the telecoms regulator observed that a popular variant of the international call fraud, SIM Boxing, which has capacity to receive and transmit calls undetected, started after the agency reviewed international termination rates from N 3.90 per minute to N24.40 per minute for international inbound traffic.

The rate review provided an opportunity for technology manipulators to terminate calls at N 3. 90 per minute “and cart away the difference thereby cutting the revenue meant for the operators and by implication the government.”

Danbatta sees call masking, refiling and SIM Boxing as one of the key challenges facing the Nigerian telecoms industry that requires immediate address due to its security, economic and social challenges to the nation.

“However, the challenge is that these SIM boxes are never type-approved by the Commission, a clear indication that they are being used illegally in the country.”, the regulator says explaining that it suspended six interconnect licence holders in the country in February, 2018.

NCC said that it has deactivated almost one million SIM cards suspected to be used for SIM Masking and SIM Boxing and is working with the office of the NSA, DSS, NIA, other security agencies, Committee of the House of Representatives and relevant industry stakeholders.