Hacking takes on new dimensions

Updated: Oct 31 2005, 05:30am hrs
Telecom carriers the world over are salivating at the revenue and profit opportunities presented by 3G applications. Investors, have shoveled huge amounts of cash into this hot segment in the form of license fees, infrastructure and other investments. A third group of potential gainers are also eyeing this pot of gold. They are the fraudsters gangsters of the telecom world who have unfailingly adapted to the emerging technologies with an uncanny ability to siphon off money into their pockets. Welcome to the world of fraud in 3G networks.

While most of the defrauding techniques that are prevalent in the 2G and 2.5G networks will find their way into 3G and VoIP networks as well, there will be some new ones as well. The most common ones that will extend from the earlier technologies are identity theft, call selling, hacking, PRS fraud, internal fraud, etc. Of these, hacking is worthy of special mention. In the IP world, hacking takes on new dimensions.

One of the most significant avenues of revenue for 3G networks is distribution and sale of premium content like video clips, movies, etc. A fraudulent customer, who has not signed up for access to premium content or services, can illegally gain access to it and choose to download and worse still, resell the same to as many people as he or she wishes to. This is a double whammy for the carriers. On one hand, they will end up paying for that content to the providers and, on the other hand, they will lose revenue from all those to whom the fraudster sells the content. Further, carriers could end up being responsible to the content provider for illegal sale of their content. This could dent the business of the carriers to an unimaginable extent and shatter their carefully built up business plans. Using the mobile phone as a mobile wallet and the morphing of the phone into a credit card are being approached as applications with substantial revenue potential. However, such environments also provide lucrative opportunities for fraudsters.

M-commerce allows real-time financial transactions and purchase of goods and services through a mobile device. Fraudsters can falsify subscription details. Carriers will then find themselves responsible for these transactions

When analog networks gave way to digital networks, vendors of these networks claimed that the new technology is impervious to fraud. Such claims proved to be tall ones in a very short span of time and carriers learnt that the hard way. Yet, the financial impact was quite similar as the loss was largely limited to voice calls being made and the cost of such calls were declining resulting in a reduction in absolute terms. With the advent of data and premium content, the fraudsters can have a field day stealing these. Indeed, the fraudsters are coming for their pound of gold.

The writer is chairman, president & CEO, Subex Systems Ltd