Lack of intent on SIMs verifications posing national security threat

For the last one decade, government and PTA initiated various measures to control the issue of fake SIMs. However, due to conflict of interest and lack of intent on part of cellular industry these steps could not bring the desired results. The effective implementation of SIM issuance procedures is conflicting to the vested interest of cellular industry as each operator is striving to achieve maximum number without considering the hind side of this uncontrolled competition.

The fake SIMs are not only the catalyst of grey traffic but are also a major source of security threats to the country. Therefore, the prime responsibility rests on cellular industry, alongside PTA to ensure foolproof system, so that no SIM is issued without proper verification. The implementation of foolproof system is not that difficult as portrayed, rather it is a matter of commercial interests of these operators.

Cellar operators have been disclosing loopholes to their franchisees and retailers selling illegal SIMs in the market. Complete sales channels of CMOs including people working for these influential mobile operators are responsible for this grave situation. There is a sort of abatement for such heinous crime. Cellular operators themselves accept that more than 95 percent illegal traffic is terminated via SIMs offered by mobile operators yet not accepting responsibility.

Cellular operators have sheepishly tried to hide the failure to comply with the laid in procedures by PTA for issuance of SIM cards. Grey traffic is a menace which is damaging the national economy and telecom industry alike. One of major source of termination of grey traffic is use of non-verified SIMs issued by cellular mobile operators.

In this context, they are now trying to shift the blame on the LDI industry which is ridiculous at the very outset. The LDI operators are the major affectees of grey traffic and invested around PKR 3.0 billion to curb grey traffic. However, without the active participation of CMO industry in curbing grey traffic, desired objectives have not been achieved.

Currently, around 50 to 60 per cent of Pakistan incoming traffic is being terminated by mobile operator’s own LDI operators, even than they are shifting the responsibility to LDI operators. To curb this situation, various solutions exist.

The cellular operators have superficially blamed the LDI industry for increase in grey traffic and have shown the inability of cellular operators to control the grey traffic. However, if we analyze a bit deeper into grey traffic issue, it is very simple to understand that the cellular operators essentially generate reports and accordingly optimize their network and sales channels after knowing the usage pattern of SIMs. In this way, they can easily identify which SIMs are used for grey traffic based on location, frequency & nature of outgoing calls, magnitude of balance top-ups and lack of any ancillary services such as use of SMSs or data. So, a valid question could be asked as to why the operators do not have their call centre to make a courtesy call to owners of such SIMs and if they are not answered and there is no customer contact, simply block such SIMs promptly. This is solely on the discretion of operators, but they choose not to do so, because these tend to be high-ARPU SIMs. So, while they cry foul on use of such SIMs for grey traffic, they also welcome the revenue.

Much like in Europe and North America, unused SIMs get automatically cancelled after a reasonable time of inactivity and the number is recycled. In Pakistan, and for the sake of showing ever-growing (manipulated) subscriber numbers, the SIMs and associated numbers are never retired and are never put back in the pool. This is where the PTA needs to step in (as the operators would almost never do it) and implement a policy directive where any unused (inactive) SIM over a reasonable timeframe is cancelled (say 6 months) and the number is recycled. Short of such measures, the issue of unverified SIMs will continue to persist.

Sale of SIMs is one part and activation of SIM is another part. The other way to avoid cellular operators conflict of interest is to focus on the activation part. GOP with the assistance of NADRA may consider deploying an IT system with suitable application to grant activation code to activate a SIM on a request by user. Examples, Car Manufactures sell the cars but GOP registers it. An arm dealer sells a pistol but GOP grant a license. There are many similar examples which can help us to resolve this issue permanently.

In June 2014, MoIT issued the withdrawal notification of ICH effective August 1, 2014 besides setting the APC level to zero, which impelled no changes of recovery of the pending USF liability against LDI”s and no future process. Besides certain operators started their own traffic even before this withdrawal notice, which is resulting in price war and non-declaration of traffic. In2014 alone, the volume of traffic reported has halved during the year and grey traffic is on the rise due to this flux. The situation has become very uncertain after June notification. International operators sensing the opportunities have started to manipulate the situation against the LDI industry and national economy. The inflow of receipts is also affected and operators are holding back due payments. The LDI industry, after continuous liaison with international operators, had managed to stabilize the termination rate of 8.8 cents for Pakistan bound international calls. Any change in the termination rate will result in trust deficit and it would be difficult to ensure PTA determined termination rate in future.

PTA should be mandated to take more steps to ensure zero tolerance for grey traffic by taking measures especially related to non-issuance of illegal mobile SIMS and their effective blocking. With these measures in place, the international traffic may be increased to 10 billion minutes/year that translate into US$ 880 Million of foreign exchange in the Country and over US$ 350 Million in terms of USF and taxes for the Country.