Harnessing Opportunities and Mitigating Risks in Device Sales

As telecom operators continually evolve, selling mobile phones and other devices has become a key part of their strategy to enrich customer experience and service offerings. This aspect of the business is not just an add-on; it’s a significant revenue driver, contributing an estimated 12-25% to overall revenues.

The Double-Edged Sword of Device Sales

While device sales open up new revenue streams, they also bring forth new challenges, particularly in fraud management. According to the CFCA 2023 Survey, device resale is now a predominant fraud type, contributing to significant losses of approximately $7.4 billion. This alarming trend is indicative of the growing complexity and scale of handset/device fraud. Synthetic Identity Fraud, Credit Muling, and Account Takeover are among the top methods contributing to these losses. The survey also points out that stolen devices often find their way to markets in Asia and South America, and up to 25% of handsets from certain African service providers are fraudulent. Additionally, 1 in 9 applications are reported to be fraudulent, highlighting the need for robust fraud prevention strategies.

Technological Evolution and Its Implications

The shift towards 5G and IoT technologies is reshaping the telecom landscape. The advent of 5G is not just about faster speeds; it’s enabling new tech paradigms like Industry 4.0, AI, AR, and VR. This transition is fueling demand for a wider range of devices, including 5G-compatible smartphones, wearables, smart home accessories, and VR goggles. However, with only a third of devices sharing IMEIs with industry aggregators, the risk of fraud in device sales becomes a significant concern.

Internal Weaknesses and the Road to Strengthening

Telecom operators face vulnerabilities due to traditional, sometimes cumbersome, ID verification processes. In the rush to boost sales and enhance customer experience, rigorous scrutiny of buyer credentials can take a backseat. The digital sales channels, while convenient, also open up avenues for fraudulent activities.

A Balance of Vigilance and Innovation with AI/ML Solutions

In this complex scenario, the need for effective fraud management solutions becomes paramount. AI/ML solutions are at the forefront of this battle, offering the agility, accuracy, and speed necessary to counter these challenges. Embedding AI/ML capabilities into rule-based engines enhances pattern detection and anomaly identification, which are crucial for combating various fraud types. Automation in scrutinizing online transactions and integrating orchestration capabilities for rapid responses are also key strategies in this fight against fraud.

Subex’s Comprehensive Approach

Subex’s Fraud Management Solution, leveraging AI/ML, is designed to tackle these challenges head-on. With a hybrid rule engine, enhanced data management, and advanced capabilities like automation, orchestration, and explainable AI, it is well-equipped to help telecom operators navigate the complex landscape of device sales, ensuring legitimate transactions and flagging suspicious ones with precision.

In summary, the telecom industry is at a pivotal point. With device sales poised for growth, operators must navigate the risks and opportunities with advanced solutions to stay ahead in this dynamic market.

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