SIM Box and eSIM Fraud in Telecom: Detection and Prevention Strategies

What Is Interconnect Bypass Fraud and Why It Hurts Telecom Revenue

Interconnect fees are a vital revenue stream for telecom operators, especially for international voice calls, where termination rates are significantly higher than local ones. But this model is increasingly exploited.

Interconnect bypass fraud reroutes international traffic to avoid paying these fees. Fraudsters use methods such as SIM Box farms, eSIM profile rotation, and gray routing to terminate calls as local traffic, costing operators millions annually.

Why It Matters

• Fraudsters profit from international arbitrage
• Operators lose high-margin termination revenue
• Subscribers face degraded quality or incorrect caller ID
• Compliance risks rise due to illegal routing practices

One of the most prevalent tactics is SIM Box fraud, which creates gray traffic, semi-legitimate call flows that obscure the true origin. With eSIM abuse, fraudsters now scale operations remotely by rotating digital SIM profiles across geographies.

How SIM Box Fraud Works in Interconnect Bypass Schemes

Also known as GSM gateway fraud, SIM Box fraud relies on physical devices loaded with hundreds or thousands of prepaid SIM cards from local mobile operators. These gateways inject international calls into mobile networks as local traffic, bypassing international termination fees.

Tactics Fraudsters Use

• Frequent SIM rotation to avoid usage pattern detection
• Geographically distributed gateways to simulate legitimate traffic
• Calling Line Identification (CLI) spoofing or suppression to hide the origin
• VoIP and Least Cost Routing (LCR) to send calls through the cheapest and often unauthorized paths

What Is Gray Routing in Telecom and Why It Enables Fraud

Gray routing refers to traffic, voice or SMS, terminated via unauthorized or semi-legitimate paths, often through SIM Boxes or unregulated VoIP gateways. It avoids interconnect fees while appearing technically valid.

• Not always illegal but violates carrier agreements
• Obscures traffic visibility and true call volume
• Enables fraud while masking origin and path
• Hard to detect using only billing or CDR data

Detection Tip: Operators must analyze the signaling layer such as SS7, SIP, or Diameter to detect anomalies in routing, CLI, and call setup transparency.

The Impact of SIM Box, eSIM Fraud, and Gray Routing on Telecom Operators

The consequences of interconnect bypass extend far beyond financial losses.

Operator Risks

• Revenue leakage: Termination fees are lost as calls bypass official interconnect routes
• Distorted traffic analytics: Gray traffic conceals true call volumes and routing patterns, impacting network planning and forecasting
• Degraded call quality and QoS: Calls routed via SIM Box or VoIP often experience latency, jitter, and dropped connections, leading to poor quality of service
• Regulatory and compliance risk: Calling Line Identification (CLI) manipulation and untraceable origins can violate national telecom regulations
• Customer dissatisfaction and churn: Subscribers lose trust when calls arrive with incorrect caller ID or poor audio, increasing the likelihood of churn

Bypass fraud not only threatens interconnect revenue but also compromises network integrity, service quality, and brand trust.

How to Detect SIM Box, eSIM, and Gray Routing Fraud

To effectively combat interconnect bypass fraud, telecom operators need to move beyond traditional billing systems. Detection requires real-time monitoring of signaling-layer protocols such as SS7, SIP, and Diameter, which provide deep insights into how calls are routed and terminated.

Key Indicators to Monitor:

• Signaling anomalies (SS7, SIP, Diameter)
  Unusual call setup flows, inconsistent routing paths, or irregular origin node patterns can indicate fraudulent traffic insertion.
• Suspicious SIM behavior
  Look for signs like high call volumes from a single SIM, frequent location changes (location hopping), or SIMs that are active for very short durations.
• eSIM provisioning abuse
  Rapid creation, activation, and rotation of eSIM profiles, especially across multiple geographic regions, may signal a bypass operation using virtual SIM identities.
• Calling Line Identification (CLI) mismatches
  Inconsistencies between the displayed caller ID and the actual network origin suggest CLI spoofing or route manipulation, both common in SIM Box and VoIP-based fraud.

With AI-driven analytics and signaling-layer intelligence, operators can proactively identify and respond to these patterns, reducing revenue leakage and preserving service quality.

Preventing SIM Box and eSIM-Based Gray Routing in Telecom Networks

To effectively prevent interconnect bypass fraud, telecom operators need more than basic monitoring. It is essential to integrate intelligent, layered defenses that combine real-time signaling visibility, AI-driven analytics, and industry collaboration. Here’s how Neural Technologies can help to build a modern fraud prevention strategy:

Deploy Signaling-Based Fraud Detection

Modern SIM Box and gray routing schemes often evade detection at the billing layer. Instead, fraud must be identified where it originates in the signaling layer.

• Monitor call setup in real time using SS7, SIP, and Diameter to detect suspicious flows and session anomalies.
• Identify unusual traffic behaviors such as unregistered origin nodes, malformed messages, or skipped interconnect routes.
• Flag spoofed or suppressed Calling Line Identification (CLI), which can indicate attempts to mask the origin of a bypassed call.

Neural Technologies’ Signaling Solutions
Signaling-based detection offers the earliest and most accurate point of insight, enabling operators to shut down fraud before it reaches the subscriber.

Use AI and Predictive Analytics

Fraud patterns are constantly evolving. AI and machine learning make it possible to stay ahead of new attack vectors without relying on static rules. Neural Technologies’ machine learning models are trained on historical fraud behavior, enabling them to:

• Train algorithms using historical CDRs, fraud cases, and signaling patterns to create a dynamic fraud model.
• Detect new or evolving bypass tactics, including unusual SIM lifecycle behaviors or abnormal call routing paths.
• Continuously refine detection logic to adapt to fraudsters’ changing strategies, including remote eSIM provisioning or VoIP-driven masking.

Neural Technologies’ ActivML (AI and Machine Learning) solution
Predictive analytics allows for faster response times, higher accuracy, and fewer false positives, preserving customer experience while protecting revenue.

Apply Geofencing and Location Validation

• Correlate IMSI and MSISDN data with geographic usage to confirm that SIMs are operating within their expected territories.
• Identify “impossible travel” scenarios, such as a SIM appearing in two distant countries within minutes.
• Block or quarantine high-risk SIMs and eSIM profiles showing abnormal movement, rapid switching, or suspicious provisioning behavior.

 Neural Technologies’ Signaling Solution - Location-Based capability
Location validation not only reveals bypass attempts but also enhances compliance with local and international roaming rules.

Collaborate Across the Ecosystem

Fraud is a cross-network problem, and fighting it requires shared intelligence and coordinated action.

• Share threat intelligence and fraud signatures with other carriers, regional groups, and GSMA’s FASG community.
• Join anti-fraud consortiums and working groups to stay informed on new threats and effective defenses.
• Align detection strategies with regulatory compliance, ensuring that enforcement actions do not impact legitimate traffic or violate user privacy.

Neural Technologies
We help telecom and financial service providers stay ahead of evolving threats and actively engage with the Communications Fraud Control Association (CFCA), GSMA Fraud and Security Group (FASG) and Telecoms UK Fraud Forum (TUFF).

Interconnect bypass fraud is more than just lost revenue. It’s a persistent threat to the integrity, trust, and sustainability of telecom ecosystems. With the rise of digital identity manipulation through eSIMs and the sophistication of SIM Box networks, traditional defenses are no longer enough.

From SIM Box detection to eSIM abuse prevention and gray routing mitigation, Neural Technologies’ solutions are purpose-built to protect your revenue, customers, and compliance posture. 

Reach out to Neural Technologies to learn more or request a demo.

Frequently Asked Questions (FAQs)