Fake Sale of Mobile SIMs: Hear the other side

By Muhammad Aslam Hayat, Chief Corporate Affairs Officer, Telenor Pakistan

The recent incident in Peshawar has shocked and shaken everyone in Pakistan and we all share a common responsibility to take all the necessary steps to ensure that this does not happen again ever. The Peshawar incident exposes many vulnerabilities in our systems but unfortunately the only area being focused and debated in the media is the sale of unverified SIMs.

Let me clarify at the outset, there is no such thing as unverified SIMs. Every mobile operator has record of SIM sales from its warehouse up to the retail level, where subscriptions are acquired. Against every SIM sold, mobile operators have necessary data as per the regulatory requirement.

However this does not mean that the system is foolproof, there is possibility that at the retail-end, some of the sellers may violate standard operating procedures (SOPs) for small gains without the support and knowledge of the mobile operators. The big question is why somebody would do this and why there is demand for SIMs on fake subscriptions.

Without fear of contradiction, I can say with confidence that no franchisee or a retailer will ever knowingly sell a SIM to a terrorist or a person having intent to commit a heinous crime. The dominant buyer of bulk SIMs is the group of people involved in bringing grey international incoming calls.

No franchisee or a retailer will ever knowingly sell a SIM to a terrorist or a person having intent to commit a heinous crime

These grey traffickers are willing to pay very high prices, (reportedly up to Rs. 5000 per SIM), for these SIMs which turns out to be a substantially motivating factor for some in the retail channels to ignore the company’s laid sales process. Many of such grey international gateways have been busted by PTA and law enforcement agencies (LEAs) and it was revealed that those bulk SIMs were bought and top-up was done from selected sources. LEAs have plethora of cases to support this fact.

This grey traffic has increased exponentially since 2012, when International Clearing House (ICH) was formed on the directive of the then Government and Accounting Settlement Rate (ASR) was raised very high. Through an official estimate, it has been observed that grey traffic has increased by 75% since the ICH formation. Rough industry estimates place it at 400 million minutes per month.

Now this is a staggering increase which in turns clearly shows that the demand for illegal exchanges must also have gone up over this period thus increasing the demand for SIMs because over 90% of these grey minutes are terminated over local mobile networks.

The publication of the voter’s lists for 2013 elections made the 789 process vulnerable

As long as demand for SIM with fake subscription will remain in place, people will engineer and exploit loopholes in any SIM verification system. Such reservations were shared with the governments from the onset at various stages when various verifications systems were being put in place, be it the 668 process to 789 process in 2009 and now the Biometric Verification System (BVS).

However the decision to impose these systems was still implemented by the government and followed by the operators. However time has again and again validated these reservations. The publication of the voter’s lists for 2013 elections made the 789 process vulnerable and now the Peshawar incident has shown that even BVS can also be manipulated if there is a vested interest.

So far mobile operators have spent over Rs. 24 billion over the years on these mandatory verification requirements. The Peshawar incident has mounted so much pressure on the government that they are again planning to come up with a directive of re-verifying all existing valid industry subscriber base through BVS in a very limited time frame. The time frame is very challenging and is expected to cause a huge inconvenience to over 100 million subscribers in Pakistan.

A targeted approach would have yielded better and desired results within realistic timelines without causing unnecessary inconvenience to over 100 million subscriptions

As previously the mobile industry will once again comply with these directives at its own expense, spending billions of rupees in capital costs, losing billions of rupees in revenue and possibly a large customer base acquired through sheer hard work and after following all the prevailing processes over time and even giving subsidy on each subscription to our customer.

A targeted approach would have yielded better and desired results within realistic timelines without causing unnecessary inconvenience to over 100 million subscriptions. We as an industry are very cognizant of how we serve our customers and would like to cause as less a hardship to them as possible. Also with these new possible directives the specter of the already heavily taxed industry losing any further investments seems all too real.

The fact that over the years new SIMs verification processes have been introduced by various governments time and again despite the industry’s reservations just gives cause to the belief that six to eight months down the road we will yet once again see another new verification process or exercise emerging.

The mobile industry will yet once again find itself at another so called defining moment regarding the SIMs verification issue. Ideally the solution should come from the mobile operators as they know fully the complexity of their business better than anyone else.

Through this article, I am focusing on only one cause of fake subscriptions. Let me predict with confidence that the re-verification of the entire customer base through BVS will not solve the problem we are trying to address, simply because we are not addressing the root cause: As long as there is a demand for bulk SIMs with fake subscriptions the supply will continue unabated.

The Government is very well aware of this problem. Ministry of Information Technology rightly revoked the notorious ICH Policy in June 2014, which was supposed to end the grey traffic or significantly reduce it from 01 August 2014. Unfortunately a Government owned company and some Long Distance International licensees obtained multiply stay orders from the court to stop the implementation of this wise policy directive of Ministry of Information Technology. PTA, which was supposed to give new Accounting Settlement Rate (ASR) for post 01 August period, has been stopped by those court orders to perform its statutory duty.

These are defining moments and the government needs to think beyond mobile network shutdown, crackdown on mobile subscriptions and restriction on double-sawaree

Grey international incoming traffic is a big headache and is causing losses to all the mobile operators. The mobile operators are aggressively trying to block those SIMs which are generating the grey traffic but new SIMs keeps on cropping up. Once we eliminate the incentive to use SIMs on fake subscriptions, then it makes sense to clean the existing subscription base, otherwise we will be just repeating ourselves over and over again like we have done so far with the 668, 789and BVS processes. It is also unfair to penalize the mobile industry for something that it is not guilty of. The government owned company and some LDI operators are reaping the benefits of this grey traffic and over 100 million subscribers and the mobile industry will pay the price for it.

Bold and immediate action needs to be taken with these culprits in order to effectively end ICH, grey traffic and subsequently the demand for SIMs with fake subscriptions. The government is definitely in a position to tackle this headlong. Absence of SIMs with fake subscriptions in the market means no SIM for terrorist and criminal activities.

Towards the end, we all must acknowledge that these are defining moments and the government needs to think beyond mobile network shutdown, crackdown on mobile subscriptions and restriction on double-sawaree, if it really wants to fight terrorism. Focus should be eliminating the terrorism, not the business environment or causing unnecessary hardship to legitimate users of telecommunication. As mobile operators, we have always known our responsibility in this war against terrorism and will continue supporting the government in winning this war.


  • Shah

    Well spoken , the govt. & telecom companies should jointly chalk out the strategy !

    • Rashid

      Entirely misleading article. We are witnessing unverified SIMs issue since last 6 years and all efforts of GOP and PTA went in vein as these Mobile Operators themselves disclose loopholes to franchisee and retailers selling illegal SIMs in the market. Complete sales channels of Mobile Operators including people working for these influential Mobile operators are responsible for this grave situation. This is all because of the number games between Mobile Operators. They should also be charged for abatement for such heinous crime. The write himself is accepting that more than 90% illegal traffic is terminated via SIMs offered by Mobile operators yet not accepting responsibility.

      Telenor’s Bangladesh arm “Grameenphone” CEO was arrested on charges of grey termination in year 2008 and paid more USD 50 Million in fines and loss to Bangladesh Telecommunications Regulatory Commission.

      More than 60 percent of Pakistan Incoming Traffic is now being terminated by Mobile Operators own LDIs who are not part of ICH and even than they are shifting the responsibility on ICH. This will not help them in anyway. They should act now without and ifs and buts by discontinuing supporting illegal activities for their small gain.

      • Adnan Ahmed

        I am sorry to say Rashid, but you seem to be illiterate in this regard. Before further proceeding,do you know that the sim involved in peshawer attack was bio-metric verified on some lady’s name?

        do you think that if all sims are biometric verified, terrorist wont be able to get any sim ?(just imagine how difficult would it be for someone with terror in mind to snatch a mobile or few dozens of mobiles and get a verified sim)?

        unverified sims issue has nothing to do with terrorism

        SECONDLY, for the grey traffic, it can certainly be tackled as the writer suggest via ICH route!

  • Bonga

    The article is not so much about fake SIMs as much as it’s about curbing grey traffic. But, here are a couple of ideas:

    1. The operators know 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 don’t have their call center make a courtesy call to owners of such SIMs and if they are not answered and there is no customer contact, block them. This is solely on the 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.

    2. 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.

    • Ahmed Habib

      1. Courtesy call, what if user is sleeping or doing any other work and unable to accept call??
      2. Well, recycling is not the great thing to do, though I support time reservations; many operator do it already in Pakistan dear, I think all of them do, Warid blocked 3 of my numbers after 6 month inactivity, telenor too blocked 1.

      • farhan

        Simple. Make an automated system which calls the number right after an outging call from a suspicious sim ends. During the call, the voice prompt should ask user to press “1”. If there is no one to press “1”, or if call is not received at all, report to LEAs and block the number.

      • Labyrinth

        Due to the fact that the user might be sleeping or not holding the mobile phone at that time; it would be better to send an sms instead of a call, to dial a toll-free UAN number and prove your genuineness through some simple steps like pressing 1, or a specific sequence of characters (as we prove our genuineness by writing the ‘captcha’ while signing up for different services on internet)

        • Insider_info

          what about hundreds of thousands of people who are not literate and then hundreds of thousands others who dont bother opening up bulk SMSes?

      • Bonga

        What I am saying is that SIMs used for grey traffic have a very specific pattern —- they seldom have incoming calls, almost 100% calls are outgoing, all outgoing calls are to random numbers, there are no incoming/outgoing SMSs, no VAS bundles are ever subscribed, all are pre-paid, and lastly, all have top-ups in thousands of Rupees a month.

        How hard is it for the operators to single out such SIMs and cancel them? If they are really serious about curbing grey traffic, this is where they need to start.

        And I am suggesting canceling them and not blocking them. Delete them from the HLR and take a hit against subscription.

        And the number should be recycled. A numbering series costs operator’ resources in terms of billing system, HLR capacity, etc. no need to have these numbers active (or active but blocked) in the HLR.

        Of course this will reduce the number of subscribers, but will show seriousness on part of the operators.

    • Eli Ehsan

      prepaid to postpaid will be another Problem solving scenario IMO.

  • Stone

    Completely agree with the thoughts shared here. The government is as usual looking to lay the blame on someone and as usual it’s the so called unverified SIM’s. What these idiots fail to realize is that the SIm’s are only a small part of this whole story. The actual story starts at the lack of education and means to earn a decent living for these people. The whole training process of these terrorist must take a few years in not more, the SIM’s are only used for a few days. The government needs to focus on the years of training rather than the few days when SIMS are used if they are serious about stopping the terrorists.

    Secondly, why is it always Telenor that speaks up on such issues? Why are all the other operators always numb on such issues?

  • JahanZaib Yousaf

    There are hundred ways; but only if Govt wanna do it.

  • khan

    copied post from the news.

  • FarooqMblk

    Why isn’t Telenor convincing Imran Khan of the same notion if that’s the case? For Telenor is somehow the sole operator who has been backing PTI in very possible way! As we all know Mr. Khan came up with a very new definition of criminal act saying “Every sim that belongs to a father IF used by his child, should be considered as an Illegal/criminal act.” But then Khan sb, Do you think the security situation NOWADAYS allows parents to send their kids to school’s without a mobile? Which is the only possible mean of communication WHEN we’re stuck with some disaster! Why are you dragging us to the primitive society for God sake? And what are you trying to communicate? That whatever possession a father has cannot be utilized by his family? What makes you think you were sane enough to give such a statement! And that means even the house we live in shouldn’t be sheltering us for that belongs to our father! I marvel at these political statements and at the message they are conveying! I’d only like to REQUEST here that pleaseeeee! Let us live! Let us excel! Countries take leaps and bounds to grow and we are here stuck with this statement that owning a mobile phone can be a possible threat to national security? GET A LIFE u guys! Try to focus on hitting THEM! The terrorists! Not the economy for heaven’s sake! #LonglivePakistan

    • qamar

      ghusa do siyasat idhar bhee, as usual, qaum ka behtreen mashgala

      • farooqMblk

        im sorry im not like you, ap jeson ki terha dharnay nai diye mainy

    • lol

      Read till third line. Stopped. Bullshit and waste of time.

      • adil

        Me too :D

      • pk

        typical pti idiots

        • Pak

          Typical jaahil patwari

          • FarooqMblk

            Kon ap? Han ap jesay bohat patwari hongay wahan dharnay mai cz unko koi aur kam nai hota na

        • FarooqMblk

          You find it a PTIan’s statement? LOL what an ABSOLUTELY Pathetic idiot you are then…Nazar aa raha hai k yahan PTI ka FARIGH tareen kon hai!

      • FarooqMblk

        As if anyone is caring to know what you think? LOL get a life

  • Think on it

    Well I have gone through the inputs by the valued persons and have my own opinion which I will share with you all.
    Firstly I want to understand what was the violation and contradiction in issuance of 5 sims which were used in Peshawar incident. If these sims were not activated through BVS? if the Sims were issued to a dead body? If agencies were unable to locate the address on CNIC? If the CNIC was fake then how BVS activated sims?
    Well I am not convinced that there is demand in the market so companies are throwing their sims. Every Telecom company knows which sims are under genuine use and under fake but they are reluctant to take any action as the Fake or unregistered sims give handsome revenue and based on it management gets bonus and promotions if they claim they are not aware then
    they have no rights to stay on jobs.
    Management pressurize their teams to get higher and inflated numbers by hook or crook for their benefits. They jump from one company to another with higher pay and start exercising their previous practice.
    In my opinion the restrictions of 5 sims should be lifted as some of the companies getting activation even with 5 sims. But the responsibility must be taken by the owner. If a Sim is lost then it is the duty of owner to block it at once and register a complaint. If a father has given his Sim to the son or wife then father is responsible for any thing goes wrong. If he cares about his son or family member then he is not allowed to cause troubles to the son or family member of others.
    There is large number of unregistered sims used these must be verified and if someone thinks 1 day is very short time then why they wasted months rather years before and if given 1 more year they will again say at the end of year OH NO IT IS NOT POSSIBLE IN 1 DAY. This practice will never stop.
    It’s responsibility of every person every department to protect our child our present and our future.

    • Labyrinth

      the reply to your questions asked in the first three lines is that the five sims used in Peshawar attack were BVS verified and hence were issued vide a legal and authentic process to a lady. But the loophole is that these all were issued to a single lady by a single operator in a single (or couple) day. This means that there needs to be a check n balance by the operators that they should be very cautious if someone requests them to issue multiple sims on a single CNIC in a single day.

  • Brotus

    I think Mr aslam hayat joined telecom industry very late or he dont knw about his/telecom sales target.he might nt aware that the SIM sold during 2005 to 2009 have no concrete records of SIMs.the dealers even sold 1000s SIMs on a single name.have he chcked how.grey traffic issue is easy to handle but SIMs issue is nt.in my veiw telecom operator must support govt in a positive way instead of giving lame excuses and mixing up the things with other issues.

  • TLDR

    TLDR

  • Bilal Iqbal

    I already know it because of few years spent in this industery… well said

  • Muhammad Basharat

    I t is very rightly said that we have to decide whether we want to eliminate the terrorism from the country or business from this country. This is high time to see whether active SIM is playing a positive role to identy the terrorist and is a supportive tool for Law enforcement agencies or otherwise. Government and decision makers should also realise that there may be some anti Pakistan forces who want to eliminate telecom business from this country which is the only business generating an high revenue for government and providing bread and butter to the thousands of families in the country in honourable way????

  • FarooqMblk

    To all those Morons knowing shit about anything, im not from PTI nor from N league cz i have ALOT more imp things to do than taking sides! And if an stupid insane comment comes from ANYONE! regardless…I would condemn it! Ridicule it! and i dont give a SHIT whatever you guys have to say about it

  • kay

    If by eliminating grey traffic there would be a solution and since all grey traffic is based on prepaid sims, the best solution would be is to impose a Rs. 10 for all incoming and outgoing calls on prepaid sims. In all parts of the world where there are mobile phones, the difference between a prepaid and a postpaid is 300% to 800% in charges. In Sri Lanka and South Africa, a call made from a post paid phone is pittance whereas a call made from a prepaid is Rs, 20 to 28 per minute…

  • Drive

    I have read the article as well as the comments and the only simple thing i want to say is the old saying :
    IF there is a WILLL – There is a WAY

    And this i am talking about, both GOV, Telcoz. Howcome only PK has to face issues which no one in the world faces (in general) ?

    The ugly reality is, everyone in PAK wants to point finger at others for responsibility – Be GOV or people or Telcoz.

  • Shahid

    Good article to hide the criminal acts in practice under the umbrella of so-called high-tech telcos. They know everything about fake and illegal SIMs and even the grey traffic. They don’t want to shut it down as it gives them millions of revenue.

    Let me tell you my story, in 2009, a policeman approached my home in Lahore to inquire about me while I now live in Islamabad. My elder brother visited the police station where they told that some other SHO had an inquiry about me. I called up that SHO and asked about the issue. He told me that some SP had asked about it. I gave him my current contact information and asked him to contact me anytime for further any questions or queries. Next day I got a call from a person from Quetta and told me that he and his lady doctor sister had got threats of bombing their hospital from a number that belonged to me. In the result they had had to shut down the hospital and had a great loss. He gave me that number which was of Telenor and issued from Quetta on my CNIC# whereas I have never been to Quetta or even Baluchistan throughout my whole life.

    After a good discussion he realized that it wasn’t me and the SIM was fake. Same day I got a call from an FIA inspector and discussed the same matter. He also figured out that it was actually a Fake SIM issued and offered me his co-operation.

    I immediately went to Telenor franchise in F-10 and inquired about the SIMs issued under my CNIC#. Interestingly there were 4 Telenor SIMs under my name and all issued from Quetta. I gave a written application to close down all these numbers immediately and also sent a letter to their high ups which had never been responded but I was appeased that the matter had been resolved and I never got any such call or anything.

    However, to the height of my fury, I have just checked my CNIC # through 668 and it shows that there are still 3 SIMs under my name in Telenor whereas I only got a Telenor SIM in 2005 on their launch which I closed down in 2006. Since then I have never used Telenor.

    Obviously, I’ll go again to Telenor office to get these Fake SIMs closed immediately but you can just imagine how many other fake SIMs must be active in their system and being misused.

  • Sleepless

    Utter BS. I have worked in the telecom industry and know how SIMs were sold. Unrealistic targets, pressure to perform and threats of dismissal were used to make sure SIMs were ‘sold’ out. One operator even handed out free SIMs at different events, no documentation necessary. This was not only done at franchise level, but at main Customer Service centres and everybody knew about it but looked away.

    If you check out the records of sales/documentation of SIMs sold out during the launch phases of the operators, you would be suprised to find out that only 25% data was correct and entered.

    I still know places where you would find thousands of connections forms with CNICs covered in dust.

  • ICH Needs to Go

    Well said. The title of this article should be Yet Another Important reason why the ICH is illegal and must be shutdown! The grey trafficking caused by the ICH in place is fostering the growth of fake SIMs. With no possible way to distinguish between fake SIMs being used for grey trafficking or terrorist activities, there is no choice than to shut down ICH and then declare huge penalties and fines to those retailers selling SIMs, because now fake SIMS will only demanded by and sold to terrorist related people.

  • Muhammad Basharat

    We must acknowledge that destroy of Pakistani economy is a bigger agenda through which some forces want to keep us slaves for ever, there are number of international studies which concluded that “registration of SIMs will never be helpful in eliminating crimes but this is a powerful tool for LEAs to track the criminal activities” . Better means of communication are the backbone of economy , these invisible forces have already destroyed our Railway, Airlines, and our roads through afghan Truks and the only mean of communication left is telecommunication… And through this theory that SIMs are the only source of terrorism our enemies want to break the only source of communication , an important tool for revival of this economy. Please think on this point too…

  • Muhabtwala

    While ICH was clearly a scam of previous government involving all ‘stakeholders’, this article focuses more on Telenor stance on ICH,known to everyone in telecom industry, than on the issue of fake SIMs. Aslam has found out an opportunity to further his company’s viewpoint on ICH by absolving telcos of their responsibility. The only point in the article I found agreeable is the flawed approach of government to only focus on SIMs and ignore the prime question of terrorists being able to reach a high security zone with huge ammunition and carry out a well coordinated action.

  • Luqman Kamil

    Sale of SIM is one part and activation of SIM is another part. The focus should be on the activation part. Govt (Nadra) may consider to deploy an IT system with suitable application to grant activation code to activate a sim on a request by user. Examples Toyota sell the car but Govt register it. An Arm dealer sells a pistol but govt grant a license. There are many similar examples.

  • patriot

    so if there is no change in terrorism activities after the verification goes into effect, who is going to get fired in the government for making us jump through hoops! Thanks for highlighting perhaps the real reason why the government is pushing such a measure. As a parallel, just because a car is registered, doesnt mean it isnt used in criminal activities…