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Western history books tell us very little about Ukraine. The identity and culture of the country was large hidden from the West until the Soviet Union collapsed and Ukraine became independent again.
Today the efficiency and skill of the nation are steadily gaining reputation. A quick review of the country reveals some interesting facts:
Kyivstar, Ukraine’s largest mobile operator, began service in December 1997. Currently Kyivstar has about 25 million mobile subscribers overall. Another half million subs are either fixed network and/or fast internet service customers.
With more than 14,000 base stations, Kyivstar reaches 99% of the country’s population. About 5,000 people work at Kyivstar — roughly 3,000 regular employees and another 2,000 in the call and service centers.
Previously a part of the Telenor group (Norway,) Kyivstar is now a subsidiary of the VimpelCom Ltd., one of Russia’s largest operators. Since Kyivstar was founded, investments in network coverage total more than $3 billion USD.
Ericsson conducts independent audits of network performance at 79 operators around the world. In a recent audit, Ericsson put Kyivstar among the top 25% of operators in terms of quality. Voice calls with Good Speech Quality were more than 96% and the Call Break Frequency metric was less than one time for 330 minutes. The average speed of data transmission from base station to the clients‘ equipment through EDGE technology was about 135 Kb per second.
Here to tell us more about business life at Kyivstar, we’re pleased to welcome Anton Pivala, Head of the Fraud Prevention Unit.
|Dan Baker: Anton, thank you for speaking to us. To begin, I wonder if you could explain some of the factors that make operating a mobile business unique in Ukraine.|
Anton Pivala: Well, Dan, an important limitation of mobile service here is that none of the big operators has yet to be granted a license for operating a 3G or 4G services in the country. At the same time all of them including Kyivstar are growing and developing.
There’s plenty of consumer demand, but government permission has yet to be granted. Even still, the technology in the network switches can fully support 3G or even 4G.
Another factor that’s different in Ukraine and Russia is that consumer credit is fairly restrictive. This is why 90% of our subscribers are on pre-paid plans. Country regulations do not allow subscribers to run up a significant credit account. So the remaining 10% of subs operate on a contract basis, but it’s rather limiting: once the small credit threshold is reached, service is disconnected.
|What about the voice service itself and its pricing?|
To be honest, the operators in Ukraine are giving subscribers a very good deal. Not only do consumers enjoy the lowest tariffs in Europe, the voice usage volume per subscriber is also the highest in Europe. For example, a single subscriber can use a few hundred minutes per day and the cost is only $5 USD per month on average.
On-net tariff rates are almost zero and for outside the network to other country operators, the subscriber can buy a package of 100 interconnect minutes for about $1 USD a month.
As a result, mobile’s total cost to the population is less than 2% of consumption.
|What’s the fraud threat like in Ukraine?|
Here again, I would point out that the situation in Ukraine and Russia is quite different than is prevalent in the rest of Europe.
Over the last five years we have experienced some pretty tough roaming fraud problems. When Urkainians traveled abroad they make a lot of calls to other countries so we face issues such as International Revenue Share Fraud (IRSF). Subscribers also experienced “bill shock”, so our reputation was threatened as subscribers were complaining.
But in recent years we have gotten our roaming fraud under control and so our biggest concern now is SIM box fraud.
To identify SIMBOX fraud we use our fraud management system - cVidya’s FraudView, plus CDR analysis and other billing related data. We are also testing some new products to complete the suite of detection and analysis of this growing issue.
We believe our fraud management performance is very good [see chart below).
While our in-network tariffs are very low, what attracts the fraudsters is skirting around the high interconnection fees we have. For instance, for Kyivstar to connect to another operator costs about 10 cents. So if the inside the network costs are less than one cent per minute and the interconnect fee is 10 cents, there’s a lot of room for fraudsters to play with that money spread.
While 10% of subscribers use smartphones, as I said before, we still don‘t have 3G/4G service in Ukraine, so most all our fraud cases are related to voice and SMS.
|How is your fraud department organized and who supplies your fraud software?|
Actually, the fraud department is part of Finance and reports to the CFO. Out of our 11 employees in fraud, four work non-stop on mostly SIM box fraud detection. In fact, people are rotated through 24 hour work shifts so coverage can be done continuously. The other 7 employees handle all other types of fraud and investigate fraud cases
On the software side, Kyivstar has been working with cVidya since 2003. The original relationship with ECtel was continued after cVidya acquired ECtel a few years ago. We have recently upgraded to the 9.0 version of cVidya FraudView. In terms of volume, we are handling over 300 million CDR’s per day across mobile voice. We are ready for larger volumes because FraudView is supported by Oracle’s Exadata.
We are currently using some advanced data mining techniques and a behavior analysis module. However “inside fraud” is not our responsibility, and is handled by the security department, which has its own staff and solution.
Another recent purchase we made from cVidya was the Rating and Billing Verification (RBV) module from the MoneyMap product used by the Revenue Assurance group, which also falls under the Finance department.
|Anton, thank you for giving us some very interesting perspective on Kyivstar and the mobile business in Ukraine. Do you have any advice for fraud managers at other operators?|
Well, I would certainly encourage operators to cooperate more and exchange valuable fraud intelligence by meeting regularly with the other operators in their countries.
Here in Ukraine, cooperation is very good. We have regular meetings with the other operators. Since the police authorities of Ukraine are not working purposefully to prevent mobile fraud, our community has been vital to gaining better control over SIM box fraud especially.
Copyright 2012 Black Swan Telecom Journal
|Area||603,550 km2 (46th)|
|- Size||slightly smaller than France|
|- Population||44,854,065 (29th)|
|- Pop. Growth||-0.6% (221st)|
|- Median Age||40.1|
|- Life Expect.||68.7 years (153rd)|
|- Fixed Lines||12.9 million (20th)|
|- Mobile Subs||53.9 million (23rd)|
|- Internet Users||7.77 million (38th)|
(and largest city)
|Languages||Ukrainian (official) 67%, Russian 24%|
|Ethnic groups||Ukrainian 77.8%, Russian 17.3%|
|GDP (PPP)||2011 estimate|
|- Total||$333.7 billion (39th)|
|- Per capita||$7,300 (134th)|