Facing new business opportunity with the development of LTE & NGN on Mobile business and understanding and preventing new generation Telco Fraud

1. GRUPPO TELECOM ITALIA
How can operators merge fraud
in a full IP environment?
London, 20.03.2012
Stefano Maria De' Rossi Daniele Gulinatti

3. Once upon a time:
COMMUNICATE
• voice
What individuals • sms
do on mobile ?

4. New generation Telecom environment
DO COMMUNICATE
• documents • voice
• Banking • sms
• Payment • email
What
individuals do
on mobile ?
ENJOY FIND
• photos/video • info/answers
• music • places
• games • products
• networking • people

5. The future of mobile

7. Pressure is on for service providers to keep
pace and meet the tough demand of an
always connected lifestyle

8. Industry Key points
 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 8

9. 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

10. Industry Key points: Mobile Internet market Trends
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
Source: Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2010–2015, February 2011 Cisco, Global

11. Expected market evolution

12. Riding the data tsunami

13. 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.

14. 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 ?

15. Two vital questions
How can operators manage the huge increase in
data volumes?

16. 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

17. LTE specification
HSDPA LTE
14 Mbps DL 100 Mbps DL
5,7 Mbps UL 50 Mbps UL
LTE has 10X users per cell than
HSDPA

18. Voice in LTE
Voice in LTE is a disruptive moment for the Industry: not a technology evolution
but a revolution

19. Industry evolution: opportunity or threat ?

20. 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.

21. In search of outcomes: GSMA perspective
RCS voLTE
FIRM IMS

22. 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 ?

23. Telco battlefield

24. Mobile business: surfing data opportunities
In order to move away from flat rates and offer more advanced data
pricing models, new monetization models are needed requiring
integration between:
POLICY CHARGING
MANAGEMENT CAPABILITIES

25. 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?

26. Mobile Technological evolution while protecting profitability

28. 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).
New types of threats and frauds are on the rise

29. The world of fraud at a glance
Traditional New &
Fraud Emerging POINT
SUB
Fraud
Telecom fraud

30. Traditional fraud
 International Revenue share Fraud
 Subscription/Identity Theft
 Interconnect/By-Pass Fraud/call reselling
 Dealer Fraud
Traditional
 Pbx Hacking
Fraud
 Incoming call bonus abuse
 Commercial offer abuse (equipment)
Telecom fraud

31. New & Emerging 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 New &
revenue or ability to bill
Emerging
 Change of billing model making it impossible to bill
 ID Spoofing (Access and Services Identity)
Fraud
Telecom fraud

32. 2011 CFCA Survey

33. We have to think differently …

34. M2M Fraud
M2M Fraud Counter-Measures
• Tampering with unattended • Rule based - HUR, Overlap,
devices Velocity, Invalid service usage
etc
• SIM Swap Cloning
• Profiling – monitor deviation
• Malware
from accepted usage patterns
• Denial of Service
• Real-Time controls – using in-
• Unauthorised access to data line rules, tariff checks and
policy controls to bar
unauthorised services, or
alert device owners
34

35. 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
36

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
37

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
38

39. 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  Develop fraud awareness
 Correct focus & strategy  Exchange intelligence & best
 Appropriate skill sets practice
 Appropriate tools  Assess the fraud exposure of
new services
 Collaborate with other GSMA
working groups and projects

41. STEFANOMARIA.DEROSSI@TELECOMITALIA.IT
DANIELE.GULINATTI@TELECOMITALIA.IT