August 2012

Fraud Management at Kyivstar in Ukraine

interview with Anton Pivala

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:

Leading User of Nuclear Energy — Ukraine is one of Europe’s largest energy consumers; consuming almost double the energy of Germany on a per unit of GDP basis. Almost 50% of its energy supply comes from nuclear power. Petroleum products are imported mostly from Russia.
Aerospace — Ukraine has launched several self-made satellites into space and the Ukrainian-made Antonov An-225 is the largest aircraft ever built. Designed in the 1980s to carry the Soviet Buran space shuttle, the one An-225 that was built is still in service.
Great English Novelist — One of the greatest authors of English Literature, Joseph Conrad, was born in Berdychiv, Ukraine. The remarkable thing about Conrad is that he was not even fluent in English until he was in his twenties.

Kyivstar — Largest Mobile Operator in Ukraine

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.

Anton Pivala

Anton Pivala is Head of the Fraud Prevention Unit at Kyivstar in Kyiv (Kiev), Ukraine. In addition to coordinating all fraud management activities at Kyivstar, he’s also an active participant in new service and tariff reviews. Managing the fraud unit since 2006, he has implemented four versions of the FMS system from ECtel (now cVidya), optimizing fraud prevention procedures along the way.

Prior to this assignment, he was Head of the Roaming Sector at Kyivstar where he managed roaming IT-support, charging, invoicing, settlements and other billing procedures involving GPRS and CAMEL roaming as well as SMS/MMS and Roamware technology. An expert in Ericsson mobile technology, Anton was formerly an instructor and consultant, conducting GSM technology courses in both English and Russian. In addition to his two Bachelor degrees, Anton has a Masters degree in computer science from Lviv Polytechnic University. Contact Anton via

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SHAKEN / STIR Calling Number Verification & Fraud Alerting — iconectiv — SHAKEN/STIR is the telecom industry’s first step toward reviving trust in business telephony — and has recently launched in the U.S. market. This Solution Guide features commentary from technology leaders at iconetiv, a firm heavily involved in the development of SHAKEN.
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The Value of an Authoritative Database of Global Telephone Numbers — iconectiv — Learn about an authoritative database of allocated numbers and special number ranges in every country of the world. The expert explains how this database adds value to any FMS or fraud analyst team.
The IPRN Database and its Use in IRSF & Wangiri Fraud Control — Yates Fraud Consulting — The IPRN Database is a powerful new tool for helping control IRSF and Wangiri frauds. The pioneer of the category explains the value and use of the IPRN Database in this 14-page Black Swan Solution Guide.
A Real-Time Cloud Service to Protect the Enterprise PBX from IRSF Fraud — Oculeus — Learn how a new cloud-based solution developed by Oculeus, any enterprise can protect its PBX from IRSF fraud for as little as $5 a month.
How Regulators can Lead the Fight Against International Bypass Fraud — LATRO Services — As a regulator in a country infected by SIM box fraud, what can you do to improve the situation? A white paper explains the steps you can and should you take — at the national government level — to better protect your country’s tax revenue, quality of communications, and national infrastructure.
Telecom Identity Fraud 2020: A 36-Expert Analysis Report from TRI — TRI — TRI releases a new research report on telecom identity fraud and security. Black Swan readers can download a free Executive Summary of the Report.
The 2021 State of Communications-Related Fraud, Identity Theft & Consumer Protection in the USA — iconectiv — This 49-page free Report on communications-related fraud analyzes the FTC’s annual Sentinel consumer fraud statistics and provides a sweeping view of trends and problem areas. It also gives a cross-industry view of the practices and systems that enable fraud control, identity verification, and security in our “zero trust” digital world.

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Migration Success or Migraine Headache: Why Upfront Planning is Key to Network Decom — interview with Ron Angner — Shutting down old networks and migrating customers to new ones is among the most challenging activities a network operators does today. This article provides advice on the many network issues surrounding migration and decommissioning. Topics discussed include inventory reconciliation, LEC/CLEC coordination, and protection of customers in the midst of projects that require great program management skills.
Navigating the Telecom Solutions Wilderness: Advice from Some Veteran Mountaineers — interview with Al Brisard — Telecom solutions vendors struggle mightily to position their solutions and figure out what to offer next in a market where there’s considerable product and service crossover. In this article, a veteran order management specialist firm lays out its strategy for mixing deep-bench functional expertise with process consulting, analytics, and custom API development.
Will Telecoms Sink Under the Weight of their Bloated and Out-of-Control Product Stacks? — interview with Simon Muderack — Telecoms pay daily for their lack of product integration as they constantly reinvent product wheels, lose customer intelligence, and waste time/money. This article makes the case of an enterprise product catalog. Drawing on central catalog cases at a few Tier 1 operators, the article explains the benefits: reducing billing and provisioning costs, promoting product reuse, and smoothing operations.
Virtual Operator Life: Enabling Multi-Level Resellers Through an Active Product Catalog — interview with Rob Hill — The value of product distribution via virtual operators is immense. They enable a carrier to sell to markets it cannot profitably serve directly. Yet the need for greater reseller flexibility in the bundling and pricing of increasingly complex IP and cloud services is now a major channel barrier. This article explains what’s behind an innovative product catalog solution that doubles as a service creation environment for resellers in multiple tiers.
Telecom Blocking & Tackling: Executing the Fundamentals of the Order-to-Bill Process — interview with Ron Angner — Just as football teams need to be good at the basics of blocking and tackling, telecoms need to excel at their own fundamental skillset: the order-to-cash process. In this article, a leading consulting firm explains its methodology for taking operators on the path towards order-to-cash excellence. Issues discussed include: provisioning intervals; standardization and simplicity; the transition from legacy to improved process; and the major role that industry metrics play.
Wireline Act IV, Scene II: Packaging Network & SaaS Services Together to Serve SMBs — by John Frame — As revenue from telephony services has steadily declined, fixed network operators have scrambled to support VoIP, enhanced IP services, and now cloud applications. This shift has also brought challenges to the provisioning software vendors who support the operators. In this interview, a leading supplier explains how it’s transforming from plain ol‘ OSS software provider to packager of on-net and SaaS solutions from an array of third party cloud providers.
Telecom Merger Juggling Act: How to Convert the Back Office and Keep Customers and Investors Happy at the Same Time — interview with Curtis Mills — Billing and OSS conversions as the result of a merger are a risky activity as evidenced by famous cases at Fairpoint and Hawaiian Telcom. This article offers advice on how to head off problems by monitoring key operations checkpoints, asking the right questions, and leading with a proven conversion methodology.
Is Order Management a Provisioning System or Your Best Salesperson? — by John Konczal — Order management as a differentiator is a very new concept to many CSP people, but it’s become a very real sales booster in many industries. Using electronics retailer BestBuy as an example, the article points to several innovations that can — and are — being applied by CSPs today. The article concludes with 8 key questions an operator should ask to measure advanced order management progress.
NEC Takes the Telecom Cloud from PowerPoint to Live Customers — interview with Shinya Kukita — In the cloud computing world, it’s a long road from technology success to telecom busness opportunity. But this story about how NEC and Telefonica are partnering to offer cloud services to small and medium enterprises shows the experience of early cloud adoption. Issues discussed in the article include: customer types, cloud application varieties, geographic region acceptance, and selling challenges.
Billing As Enabler for the Next Killer Business Model — interview with Scott Swartz — Facebook, cloud services, and Google Ads are examples of innovative business models that demand unique or non-standard billing techniques. The article shows how flexible, change-on-the-fly, and metadata-driven billing architectures are enabling CSPs to offer truly ground breaking services.
Real-Time Provisioning of SIM Cards: A Boon to GSM Operators — interview with Simo Isomaki — Software-controlled SIM card configuration is revolutionizing the activation of GSM phones. The article explains how dynamic SIM management decouples the selection of numbers/services and delivers new opportunities to market during the customer acquisition and intial provisoining phase.
A Cynic Converted: IN/Prepaid Platforms Are Now Pretty Cool — interview with Grant Lenahan — Service delivery platforms born in the IN era are often painted as inflexible and expensive to maintain. Learn how modern SDPs with protocol mediation, high availability, and flexible Service Creation Environments are delivering value for operators such as Brazil’s Oi.
Achieving Revenue Maximization in the Telecom Contact Center — interview with Robert Lamb — Optimizing the contact center offers one of the greatest returns on investment for a CSP. The director of AT&T’s contact center services business explains how telecoms can strike an “artful balance” between contact center investment and cost savings. The discussion draws from AT&T’s consulting with world class customers like Ford, Dell, Discover Financial, DISH Network, and General Motors.
Mobile Broadband: The Customer Service Assurance Challenge — interview with Michele Campriani — iPhone and Android traffic is surging but operators struggle with network congestion and dropping ARPUs. The answer? Direct resources and service quality measures to ensure VIPs are indeed getting the quality they expect. Using real-life examples that cut to the chase of technical complexities, this article explains the chief causes of service quality degradation and describes efficient ways to deal with the problem.
Telco-in-a-Box: Are Telecoms Back in the B/OSS Business? — interview with Jim Dunlap — Most telecoms have long since folded their merchant B/OSS software/services businesses. But now Cycle30, a subsidiary of Alaskan operator GCI, is offering a order-to-cash managed service for other operators and utilities. The article discusses the company’s unique business model and contrasts it with billing service bureau and licensed software approaches.
Bricks, Mortar & Well-Trained Reps Make a Comeback in Customer Management — interview with Scott Kohlman — Greater industry competition, service complexity, and employee turnover have raised the bar in the customer support. Indeed, complex services are putting an emphasis on quality care interactions in the store, on the web, and through the call center. In this article you’ll learn about innovations in CRM, multi-tabbed agent portals, call center agent training, customer treatment philosophies, and the impact of self-service.
21st Century Order Management: The Cross-Channel Sales Conversation — by John Konczal — Selling a mobile service is generally not a one-and-done transaction. It often involves several interactions — across the web, call center, store, and even kiosks. This article explains the power of a “cross-channel hub” which sits above all sales channels, interacts with them all, and allows a CSP to keep the sales conversation moving forward seamlessly.
Building a B/OSS Business Through Common Sense Customer Service — by David West — Delivering customer service excellence doesn‘t require mastering some secret technique. The premise of this article is that plain dealing with customers and employees is all that’s needed for a winning formula. The argument is spelling out in a simple 4 step methodology along with some practical examples.

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