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Telecom fraud equal to annual revenue of Walt Disney: Heavy Reading

Telecom operators worldwide now lose US$40 billion a year to fraud, and they need better tools and procedures to address this growing problem, according to the latest report from Heavy Reading Service Provider IT Insider, a paid research...


August 1, 2012  


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Telecom operators worldwide now lose US$40 billion a year to fraud, and they need better tools and procedures to address this growing problem, according to the latest report from Heavy Reading Service Provider IT Insider, a paid research service of Heavy Reading.

Bigger Than Disney: Telecom Fraud Tops $40 Billion a Year examines the telecom fraud prevention and detection market, covering the current types of loss due to fraud. It also discusses how the industry is tackling the challenges it’s facing, including platforms that fight fraud. 

“Telecom fraud is an ever-present drain on operator profitability, and operators and their vendor partners have long tried to limit theft,” says Susan McNeice, senior analyst at Heavy Reading and author of the report. “Despite their best efforts and recent improvements, the bill for fraud is growing and now stands at US$40 billion a year – which is equal to the annual revenue of the Walt Disney Company.”

Insiders agree on one thing: It’s time to re-commit to fraud prevention and redouble efforts, McNeice says. “To be sure, there is no one approach to guard against fraud,” she continues. “Operators have many resources at their disposal to rekindle their thought processes and actions about risk reduction. But because the costs are already borne before the services are stolen, reducing fraud delivers savings direct to the bottom line of the operator’s income statement.”

Key findings the report are:

* Fraud equals nearly 2% of telecom annual revenues worldwide

* New services, especially mobile-based offerings, are increasing fraud risk for network operators

* Long-established fraud problems, including service theft from inside sources, continue to drain service provider resources

* Operators and vendors are ramping up fraud prevention efforts by making fraud detection part of a larger risk-management initiative

* Fraud systems benefit from data analytics to identify emerging threats and deliver a new view of risk and opportunity

* As network operators expand more and more services into the realm of mobile commerce, they will need trusted partners to minimize fraud risks.

Further information on the study is available at www.heavyreading.com.