May 06, 2017
To tackle the recent economic downturn and loss of revenue faced by telecommunications companies in Nigeria, the Nigerian Communications Commission (NCC) increased voice termination rates to Nigeria. This interim increase is expected to help increase revenues until a cost based termination rate is fully implemented. The net effect of this increase is that telecommunications companies and VOIP providers outside Nigeria had to increase their call rates. To ensure that their profit margins do not reduce, some of these telecoms providers have turned to the Grey Market for Voice Termination. The Grey Market is dominated by the process referred to as SIM BOX fraud.
Sim Box fraud involves bypassing regular interconnect agreements in order to maximize profits. As an example, with the increased termination rates to Nigeria, fraudulent operators have resorted to using gateways loaded with multiple SIM cards to connect calls. When an international call to Nigeria is made, the call is routed through the SIM Box in Nigeria. The consequence is that the call now appears to be a local call coming from the SIM Box. The operator avoids the interconnect rate and only pays local rates. This fraudulent process results in international calls being displayed as local calls with poor call quality and a lot of dropped calls. The big consequence is that the Caller ID of the person making an international call to Nigeria is displayed as a local Nigerian number.
The lack of Caller ID display for calls to Nigeria has become very rampant and led to a lot of unanswered calls. Some people even question the originator of the call when they see a local number displayed and the originator insists the call is from abroad. Some of the international operators are aware that they are using fraudulent means to terminate their calls while others are unaware. The reason this problem persists is due to the stack difference in price between local and international calls. Callers from abroad that want Caller ID displayed every single time when they make calls to Nigeria should only utilize telecoms companies that are FCC registered. They are more likely to use legal termination routes and will provide legitimate Caller ID display.