Fraudulent Roaming to Grow by 700% in the Next Five Years

In a globalised and interconnected world, roaming or data roaming is part of everyday life.

According to data from Juniper Research’s ‘Global Roaming Fraud Market 2023-2028‘ report, data roaming will grow from 230,000 Petabytes (PB) expected to close this year to more than 2.2 million PB in 2028, driven by the rise of data-intensive 5G roaming connections.

This is very positive, but such roaming growth also has a downside, as it will create more opportunities for fraudsters. And the numbers are not negligible.

Juniper Research estimates that fraudulent data roaming traffic will grow by 700% in the next 5 years, reaching 218 PB. As we reported a few months ago, operators’ global losses from this will exceed $8 billion by 2028.

This is because the local network cannot charge a user if they gain access to a service through fraudulent activity, thus generating monetary losses for the operator.

In addition, the risk of roaming fraud may deter subscribers from using roaming packages when travelling, which will result in further revenue losses meaning that operators will continue to lose revenue for telecommunications companies.

Operators also run the risk of compromising their reputation, as the damage caused by fraud can damage their brand image, leading to churn of customers to competitors.

Juniper Research identifies different types of roaming fraud. One is SIM card cloning, a process whereby a fraudster gains access to a legitimate subscriber’s SIM card and uses it for illegitimate purposes, such as making calls or using data services while the legitimate subscriber is roaming abroad. This can result in charges to the subscriber and simultaneously reduce the operator’s revenue.

There are also cases where fraudsters gain access to the SIM card and seize it with the aim of stealing their victim’s identity and taking control of their devices. In this way, they can impersonate a legitimate subscriber to access other accounts and use roaming services at the expense of the subscriber and the operator.

Another example is SIM box fraud, where fraudsters use multiple SIM cards to redirect international calls through local networks, thus exploiting the price difference between call rates and circumventing international call charges.

This method is very similar to the so-called roaming bypass, whereby call records are manipulated to be recognised as local calls, thus avoiding international call charges.

Another option is subscription fraud, which occurs when fraudsters use a stolen identity to subscribe to multiple roaming services, causing operators to go to great lengths to identify the source of the fraudulent activity, affecting their revenues.

Finally, Juniper Research discusses international revenue sharing fraud (IFRS), where fraudsters manipulate calling patterns and exploit revenue sharing models by targeting international premium rate numbers (IPRNs) in higher cost locations, taking advantage of the revenue sharing agreement between operators and impacting traffic.

In addition, these fraud schemes are closely related to SMS pumping, which we recently discussed on Silicon.es, and which poses a significant economic and reputational threat to all types of companies.