SIM Box and its linked to external frauds affecting leading operators in Cambodia in the form of falling revenues, lower QoS for for International Incoming Calls and inbound roaming services. Arguably, such activity is becoming rampant due to lack of legal framework, poor enforcement and coordination among Government Ministries and Government agencies.

1. ILLEGAL BYPASS FOR INTERNATIONAL
CALLS: INDUSTRY POSITION
Firdaus Fadzil
July 2013
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2. AGENDA

To provide a briefing to the mainstream media on the growing trend of the used of
illegal SIM boxes to route international incoming calls into the Kingdom of Cambodia.

To highlight its adverse impact to the RGC, network operators and consumers
 Royal Government of Cambodia:
- Loss of revenue from VAT, Special Tax and revenue sharing with Receiving
Network.
- National security – unknown calls are terminating into Cambodia, undetected.
 Network (Receiving) Operators: Loss of interconnection revenue.
 Consumers:
- Low Quality of Services – drop calls, echo, voice mailbox service not available.
- Originating number is not displayed correctly – not able to call back.

To highlight series of stern actions to be undertaken by the Government and network
operators to curb this illegal activity.
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3. OVERVIEW OF ILLEGAL BYPASS FRAUD
Illegal bypass fraud is a common global issue and can be done via several ways. Recently,
Cambodian Network Operators have also detected a growing trend of international call illegal
bypass (International Traffic Transformation).



International Traffic Transformation:
International incoming calls
transformed into domestic calls, via
techniques such as SIM box or Pbx
hacking, leading to interconnect revenue
loss.
Arbitrage International / Domestic
Gateways:
International incoming calls received on a
domestic interconnect gateway. This case
leads to a revenue loss as soon as the
domestic termination rates are lower than
international termination rates
Our focus for today
Mobile/Fixed
operators
Internal Fraud & Phantom Gateways:
Incoming calls received on a phantom
interconnect gateway, i.e. non declared on
your network or not producing CDR. This
case leads to a revenue loss as there is no
interconnect revenue for this traffic.
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4. NORMAL INTERNATIONAL INCOMING CALL ROUTING
International incoming call routing and termination is a licensed activity regulated by MPTC/ TRC.
Only Network Operators i.e. Mobile/Fixed licensees, IGW licensees and VOIP Gateway licensees
are permitted to operate this activity under specific License Conditions.
(1) Originating Network
(2) Interconnect Carriers
(3) Receiving Network
(via IGW or VoIP Gateway)
e.g.
Celcom, Maxis
Malaysia
International
Transit Carriers
Mobile /
Fixed Network in
Cambodia
Revenue stream
• End user pays 90 cents;
• Originating Network keeps 60
cents and pays 30 cents.
• Interconnect Carrier keeps
24 cents and pays 6 cents
to the IGW/VoIP Network and
Receiving Network.
• IGW / VoIP keeps 4
cents.
• Receiving Network
keeps 2 cents (i.e.
Mobile Termination Rate)
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5. FRAUD IN INTERNATIONAL INCOMING CALL ROUTING
Fraud in the form of illegal bypass is done by installing unauthorised equipment i.e. SIM Box to
bypass the Network Operators’ billing system. At upstream level, Illegal bypass operators create
clandestine arrangement with Transit Carriers.
(1) Originating Network
e.g.
Celcom, Maxis
Malaysia
(2) Interconnect Carriers
International
Transit Carriers
(3) Receiving Network
Iliegal SIM
Box Operator
Mobile /
Fixed Network in
Cambodia
Redirect calls over
inadequate, highly
compressed IP
connections, resulting
in poor service quality.
Revenue stream
• End user pays 90 cents;
• Originating Network keeps 60
cents and pays 30 cents.
• Interconnect Carrier keeps
27 cents and pays 3 cents
to Illegal SIM Box operator.
• Illegal SIM Box Operator
keeps 3 cents and does not
pay anything to the
Receiving Network.
• IGW / VoIP gets 0 cent.
• Receiving Network gets
0 cent i.e. zero Mobile
Termination Rate.
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6. ECONOMIC IMPACT OF ILLEGAL BYPASS IS DEVASTATING
Industry estimates not less than 20% of International Incoming International Call is now routed via
illegal SIM boxes. If this goes unchecked, the volume will increase further.

Government has been deprived the following revenues:
 Special Tax on traffic minutes
 Value Added Tax charge from IGW/VoIP Network
 Revenue sharing (as part of License Conditions)
 Security issue – illegal VoIP call is used to coordinate other criminal acts, leading to a higher security
threat.
 Recent arrest was made against 24 Chinese nationals allegedly involved with kidnapping and
extortion, leveraging on illegal VoIP calls from people in China. (Phnom Penh Post, 10 June 2013)
 From 2010-June 2013, ~600 Chinese and Taiwan nationals were arrested for allegedly extorting
money from people in China and Taiwan via VoIP from Cambodia.
 Used of smuggled equipments

Consumers will experience a deteriorating Quality of Services:
 SIM Box redirect calls over inadequate, highly compressed IP connections, resulting in a poor service
quality.
 Network Operators have received complaints on call drops, echo, voice mailbox not reachable and
Caller ID cannot be viewed.

Estimated number of bypass minutes by top Network Operators (from 1 April – 31 May)
 Revenue loss to Receiving Network (2 cents/min)
 Revenue loss to IGW/VoIP Network (4 cents/min)
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7. SIM BOX BURNS THE GOVERNMENT’S COFFER
With growing trend of illegal bypass traffic detected by the Network Operators, we strongly
believe that the SIM Boxes have been smuggled by a syndicate into Cambodia in a big scale.




16 SIM Cards Multi-port Modem Pool
GSM/GPRS SIM Box
Interface type: RS-232
SMS: 9,600 SMS/hour
 Etross-8132
 8 ports 32 SIM Cards
 GSM Fixed Wireless Terminal
(Portable)
 IMEI changeable
 32 SIM rotations
 Etross-8888G
 8 ports 32 SIM Cards
 GSM Fixed Wireless Terminal
(Portable)
 IMEI changeable
 32 SIM rotations

SIM Box comes in many forms, functionalities and capabilities.
 This equipment might have been smuggled into Cambodia by a syndicate, depriving
the Government its needed revenues, in the form of import duties.
 The syndicate may also operate this equipment and engage in the activity without
proper license, therefore, depriving the Government from its needed VAT, Special Tax
and revenue sharing.
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8. KEY ACTION TO BE TAKEN BY THE INDUSTRY
A series of coordinated action by MPTC, TRC, MoI and Network Operators will be
executed soon to curb this criminal offence.
Action items
Action items description
• Network Operators are already equipped with state-of-art equipment to perform
1.
Network operators will
do active surveillance
and tracking down the
group.
Timeline
• Immediate
active surveillance and track down the location of the SIM boxes across
Cambodia.
• Network Operators are exchanging information on the suspected SIM Boxes
details.
• Blocking of numbers for suspected SIM Box numbers.
2.
MoI already initiated a
thorough investigation
into this matter.
• Network Operators are now working closely with Internal Security Department,
• Short term
Ministry of Interior to probe this criminal offence.
• On top of operating illegal SIM box and engaging in regulated activity without
proper license e.g. VoIP, Fixed, Mobile licenses from MPTC and TRC, the
person(s) also carry a security threat to the Nation.
• Criminal charged will be imposed.
• TRC is the sole entity being authorized via Royal Decree dated 1 March 2012 to
3.
MPTC and TRC
• Short term
issue licenses for various activities related to ICT telecommunications industry.
• Network Operators are also working closely with MPTC and TRC by exchanging
information on the suspected fraud, the used of smuggled SIM boxes equipment,
probe the traffic and facilitate overall inspection and assess the “loss of State
revenues”.
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9. KEY TAKEAWAY

Illegal bypass activity using SIM Box has been detected by the industry recently. Network
Operators continue to monitor and probe the traffic and have acquired the required
information for further action.

The growing trend brings a devastating effects to the Government, Network Operators as
well as the consumers.

The industry and the Government will work together to curb such a criminal offense.
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10. QUESTIONS & ANSWERS
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