About a month ago, we released a Global Internet Phenomena Spotlight looking at the topic of OTT Voice Bypass Fraud, and today I am back with another fraud focused report, which this time is examining zero-rating fraud.
Much like the OTT Voice Bypass Fraud Spotlight, today’s Zero-Rating Fraud Spotlight was created at the request of several customers who were looking to better understand the phenomenon, as concerns about fraud and revenue leakage are increasingly top of mind for service providers.
For those unaware, zero-rating is a data offering that benefits subscribers by enables unlimited usage of one or many applications, services, or websites, for a fixed (or zero) price. This approach is often used by mobile (and sometimes fixed) operators to differentiate their services and stand out from the competition while providing a valuable benefit to subscribers.
Recently, however, a small percentage of subscribers have begun to exploit zero-rated websites and applications by using a technique known as HTTP header injection. This fraudulent behavior is accomplished by using smartphone applications that masquerade non-zero-rated traffic as if it is sourced from a zero-rated site, allowing a subscriber to avoid related charges.
Sandvine has deployed zero-rated service plans for dozens of operators across the globe, and this experience has allowed us to gain an extraordinary understanding of how to identify, manage, and prevent the occurrence of zero-rating fraud. This latest Spotlight explores this issue in detail and contains a number of revelatory facts, the highlights of which include:
- On a tier-1operator’s 2G and 3G network, subscribers suspected of using HTTP header injection to commit fraud averaged 805MB of usage each month. This is more than 300% higher than the 2G and 3G network subscribers’ mean monthly usage.
- While only 1% of subscribers are suspected of committing fraud, they were responsible for 140 TB of total network traffic in a single month. The operator of this network believes zero-rating fraud could be responsible for 10% of total network traffic.
- The traffic composition of the suspected fraudulent traffic was very similar to the traffic composition of the region, with over 30% of the traffic being for the social applications Facebook, WhatsApp, and Instagram
- Left undetected, the zero-rating fraud could cost the operator examined more than $7M USD each month, based on the average cost of data for their pre-paid plans
If you are an operator with zero-rating plans, you need to ensure that you are asking your vendors the tough questions on fraud prevention and revenue assurance to ensure your zero-rating plans are providing the full benefit to revenue that you expect. There is no denying that fraud is happening in your network, but with the right solution, such behavior can be quickly detected and managed.
Want to learn more? Download the Zero-Rating Fraud Spotlight at https://www.sandvine.com/trends/fraud.html