Increasing numbers of mobile operators within the European economic area have introduced origin based rating (OBR) for voice termination. German mobile network operators introduced significant surcharges in mobile termination rates (MTRs), based on the country of call origination, with differences as much as €0.20 per minute (a 1,000% increase) and further surcharge penalties for calls with fraudulent calling party numbers (CLI/ANI) such as manipulated or invalid numbers.
Typical carrier contracts clauses now determine that calls with calling party numbers (CLI/ANI) that are not recognized as valid, based on the current official number plan issued by each country’s regulator, will be charged the penalty surcharge. This penalty surcharge can be around €0.35, which means a 3,500% increase over the standard termination rate.
These surcharges are causing significant market disruptions as many originating service providers and transit carriers are challenged with managing the routing, rating (for carrier reconciliation) and pricing of these surcharges.
For transit carriers, there are significant risks of substantial losses on this traffic due to the surcharges and penalties. However, the full force of the surcharges and especially penalty surcharges may not be felt for many months as these charges are often raised many months later. Moreover, we are increasingly seeing contracts with the ability to raise surcharges and penalty surcharges up to six months after the calls occurred. This is leading to substantial billing and settlement disputes, contractual uncertainty, and massive changes in transit pricing.
The challenges are compounded further because there is significant variation in the definition of groups of countries for call origination as well as different rules for A-number (CLI) validation. This is further complicated by fraudsters manipulating the CLI and the likely opportunities for arbitrage. (Calling Line Identification (CLI) spoofing)
In turn this is driving the industry to utilize Number Portability data to identify which terminating operator will be delivering the call, in order to identify which surcharges and penalty surcharges will be applied.
But is this really the solution? We doubt it as transit carriers will do everything to avoid such surcharges and penalties.
As in our “short-stopping”, “short-transit” or “number hijacking” solution whereby originating and terminating carriers can communicate via a blockchain oracle without having to know the transit carriers this is also the solution to stop OBR fraud. It can be achieved with the same technologies used as for short-stopping fraud. The only difference is that it is not the originating who asks the oracle if the call was terminated but the terminating party asks the oracle if the call actually existed.
If a call never existed then this is a clear proof of CLI spoofing.
Interested in more information? Just contact us.