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The Impact of eSIMs on SIMBox Fraud: Elimination or Acceleration?
The Impact of eSIMs on SIMBox Fraud: Elimination or Acceleration?
In the ever-evolving landscape of telecommunications, the introduction of embedded SIMs, or eSIMs, has sparked discussions about their potential to reshape the industry. One particularly intriguing aspect is their impact on SIMBox fraud – a form of telecom fraud that has plagued the industry for years.
Will eSIMs be the long-awaited solution to eliminate SIMBox fraud, or could they possibly inadvertently accelerate it?
Wait, what is an eSIM?
SIM cards play an essential role in mobile phones. They contain the unique IMSI number that identifies users to the mobile network. They are also used to verify users’ identity, store network settings, and enable network access allowing users to make and receive phone calls and text messages. An eSIM, or embedded SIM, is a small, integrated chip within mobile devices such as smartphones, tablets, and smartwatches and performs the same functions as a SIM card.
Although the very first eSIM enabled smartphone was released in 2017, it took several years for the technology to gain awareness with consumers. Initially eSIM adoption was relatively slow. However, starting in 2022, the rate of adoption of eSIM technology has greatly accelerated. According to GSMA Intelligence’s latest findings, nearly 400 mobile service providers (i.e. MNOs, MVNOs and providers of international roaming services) have now launched commercial eSIM services for smartphones across 116 countries.
Unlike the traditional SIM card, an eSIM is pre-installed in a device and cannot be physically removed. It is provisioned remotely, with the ability to hold up to eight unique subscriber profiles, two IMSIs, and two different network providers at the same time. For consumers, eSIMs make it much easier to switch wireless service providers and avoid roaming charges through local subscriptions. Not having to swap physical SIMs in their devices is also an added benefit. Acquiring a new eSIM can be accomplished by simply scanning a QR code.
Understanding SIMBox Fraud
According to the CFCA’s latest 2023 Global Fraud Loss Survey, Voice Bypass Fraud has increased to 13% of all fraud losses, or an estimated $5 Billion USD per year. That is nearly double where it was just two years ago.
SIMBox fraud involves the use of devices known as SIMBoxes to route international calls through local numbers, bypassing international call charges. Fraudsters exploit the price disparities in international and local call rates to make a profit. Traditional SIM cards are are a key component of SIMBox operations because they are easily removable and transferable and vulnerable to misuse.
The Promise of eSIMs
Because eSIMs are embedded directly into devices and cannot be easily removed or swapped, this makes them less susceptible to physical tampering and unauthorized use. Since they are embedded in devices and not easily accessible, one might expect that the adoption of eSIM technology would significantly mitigate and could even eventually eliminate traditional SIMBox fraud.
The Potential for Elimination
The inherent security features of eSIMs provide a strong foundation for combating fraud. Their integration with device hardware and reliance on secure protocols can make it more difficult for fraudsters to manipulate or duplicate these embedded identities. Further, the physical availability of SIM cards will diminish, adding cost and complexity for SIMBox operators’ businesses. This disruption will force some SIMBox operators out of business. In summary, eSIMs will enhance the overall security of telecommunications networks and reduce the avenues for traditional SIMBox fraud to occur.
Factors That Could Accelerate Fraud
The transition to eSIMs will take time as older, legacy devices will remain on operators’ networks for years to come. Further, eSIMs will not guarantee a complete eradication of fraud. In fact it could accelerate it. Operators who give away eSIMs for free, to attract new subscribers, can easily be victimized by BOT-based attacks. These eSIMs can then potentially be used in devices, roaming on other operators networks. This is just one example illustrating how, as technology evolves, so do the tactics of cybercriminals.
Another way SIMBox fraud could accelerate is by fraudsters exploiting potential weaknesses in eSIM implementations. It is just a matter of time until SIMBox gateway manufacturers catch up and implement eSIM capable chipsets. When that happens, the increased availability that comes with eSIMs will likely create many new attack surfaces, leading to novel forms of fraud. The market may become flooded with new routes. International SIMbox arbitrage will skyrocket as more gateways come online. Also, procurement of eSIMs will become even easier for fraudsters as they leverage more 3rd party service providers like prepaid MVNOs, that don’t have stringent ID verification requirements.
The Role of Ongoing Innovation
Over time, a new equilibrium will be established as operators (and LATRO) identify new ways to detect eSIM-enabled SIMBox fraud. However, the effectiveness of leveraging eSIM technology in combating fraud will ultimately depend on continuous innovation and proactive security measures. Telecom service providers, device manufacturers, regulatory bodies and the vendor community must collaborate to stay ahead of these emerging threats. Regular updates to security protocols, real-time monitoring, and swift responses to incidents will be essential in maintaining the integrity of eSIM technology.
While eSIMs hold great promise in reducing SIMBox fraud, the landscape of telecom fraud is complex and constantly evolving. The transition to eSIMs should be seen as part of an operator’s broader strategy to enhance security across their telecommunications ecosystem. Through ongoing collaboration and innovation, LATRO is working towards not only eliminating existing SIMBox fraud but also staying ahead of potential threats that may arise in the era of embedded SIM technology.
👉 Would you like to learn more about how LATRO can help protect your network from SIMBox fraud? Contact our team of experts today for an advice and tailored solutions that meet your unique needs in this dynamic industry. Let’s work together to safeguard and grow your revenues!