How Illegal GSM Gateway Exchanges Affect Operators?

How Illegal GSM Gateway Exchanges Affect Operators? 

During the operation, maintenance and optimization of a cellular mobile network, variation and fluctuation in mobile traffic is often encountered. Traffic is an indicator about how much the network is being used by subscribers. When a voice call is connected and answered over radio and non-radio links, billing starts.

Traffic is measured in a unit called Erlang — named after Danish mathematician Agner Krarup Erlang. Increased traffic is always a welcoming development; hinting that more users are using the network, thus more revenue is generated. Often when an event like a political rally, anniversary of some Sufi or simply a large gathering takes place, mobile traffic at the site surges. Mobile operators take into account such incidents and take necessary measures to provide seamless access to the network for subscribers.
There are times when surge in mobile traffic corresponds to no known event in the area. More so, when detailed investigations take place, it is revealed that the revenue against that site has not increased. This means that the mobile subscribers are using mobile operator’s radio network but somehow successfully bypassing the core network — the part where billing and routing takes place.
This is done by setting up routers, switches and exchanges which are able to route voice calls when GSM SIM cards are inserted.
A typical way would be to route mobile calls via the SIM card, effectively turning the call from landline to mobile, from mobile to mobile, cutting the cost by over half.
GSM Gateways come in various different shapes, sizes and languages, by languages I mean protocols, e.g. ISDN30e/PRI, ISDN2/BRI, Analogue and VoIP Including H.323 and SIP, depending on what is needed for the company.
For example, for a typical 2 person company, the most cost effective would be the analogue device and connect this to the original analogue line (just like your home phone).
This is, of course, illegal. PTA has been fairly active in this regard to track and shut down such mobs. NR3C extends logistics during such raid on illegal GSM gateways. In fact, NR3C and PTA collectively raided and confiscated the equipment of 9 illegal GSM gateways. However – considering the amount of illegal traffic Pakistan is carrying — this was just the tip of the iceberg.
The world cellular community came together and formed a GSMA Fraud Forum to deal with this. According to a recent CFCA report, US$40.1 Billion is lost annually to fraud and operators who fail to take action both promptly and decisively will see their revenues deteriorate rapidly, it will also negatively affect the customer.
But why operators fail to take action? GSMA Fraud Forum highlights the following reason as the main cause for these illegal mobs to exist:

Perhaps the most decisive factor is lack of awareness by many mobile operators of the significance of bypass fraud and the vulnerabilities associated with it.
Companies are simply not willing to believe that they have an issue on their network. This assumption is a consequential oversight, revealing the need for a better understanding and appreciation of the mobile fraud situation.

Illegal termination is usually found where there is a variance between local and international call rates. However, in a number of countries the difference between the local and international calling rates is not significant enough for fraudsters to benefit. An example of this would be Singapore and the United States.