Mobile SIMs, Telecom Industry Bears the Brunt Once Again

By Sohaib Sheikh

In our country it is much easier to blame someone without going deep to find out the actual root cause of the menace and address it. The case with multi-billion telecom industry is not different which has been bearing the brunt for years. Be it the issue of taxation, right of ways, shutting down of signals due to possible terrorist activity or the re-verification of mobile phone SIMs, industry has been on the receiving end in all these years.

The present government of PML(N), when came to power, was considered a business friendly regime but even after more than one and a half year in power, telecom industry still feel like an orphan child.

When ever there was a need to swell the national exchequer, telecom players were eyed to extend help in tough times. In 2013-14, this industry contributed Rs. 125 billion in terms of various taxes. It was the same industry that helped reduce the budget deficit over a billion dollars when government of Pakistan auctioned 3G and 4G licenses. Due to cellular industry, nearly 78% of population in Pakistan owns a mobile phone.

When ever state comes under attack of any sort in Pakistan, instead of tightening the noose around terrorists and addressing the root cause, it start tightening the space around cellular operators. Every time, the lifeless mobile SIM turns out to be the main culprit and foreign investors are summoned for another plan from the government.

Ridiculous aspect in all these years is that cellular operators bow their head down and accept whatever is imposed upon them.

Instead of tightening the noose around terrorists and addressing the root cause, government has always been tightening the space around cellular operators

According to industry figures, telecom industry have spent Rs. 24 billion on various security measures and just recently, almost Rs. 2.6 billions have been spent on installing biometric SIM verification system across the country.

With the recent Peshawar Attack, and the Interior Minister statement holding telecoms responsible for their lack of security check to help prevent terrorism from the country, the simple question arises, what are our security agencies in place for?

The telecoms can only do so much as to implement a biometric system, which enables all buyers of SIMs to register to the network, to ensure their identity is known to the telecoms and in case of any threats or criminal activity, their trace to be fool proof.

However, the system is as flawed as any other, terrorist organizations may be able to register to the network with stolen SIM cards, or use SIMs that are from other countries with a roaming facility enabled on to it. The fault cannot lie with an organization that is in place for nothing other than to facilitate communication, and is already fighting battles to provide an appropriate amount of privacy to its consumers while the SIM used during the incident was issued after following PTA SOPs.

Ridiculous aspect in all these years is that cellular operators bow their head down and accept whatever is imposed upon them

The industry was just trying to struggle paving its way out and recover from the hefty spent made during 3G roll outs, the pain was still fresh while the wounds were healing slowly and yes talking about making money seems like a fancy dream turning horrific after the latest orders by the kings, the rulers, the God father Carlioni’s the Tony Montana’s Al pacino’s…….. are to reverify 103m SIMs blue and green I mean grey and white in 90 days….the SIMs that were sold in a span of years and realistically speaking not even 90 but 75 working days (why would a retailer sacrifice his day off) with 99% of biometric channel being retailers; would mean at least 50% of total SIMs getting blocked resulting in 50 million approx SIMs may vanish taking more than half of the industry’s revenue away which can be approx 10 billion per month.

Haven’t they (kings) thought about the pros and cons, little that they know how will this effect employment direct and indirect attached to the industry.

At least 50 million SIMs getting blocked after reverification exercise will cause telcos a loss of around Rs. 10 billion per month

A poor farmer, a carpenter, a handyman, fisherman, news-hawker, stock brokers, doctors, people who run there business dependent on cell phones only if not able to reach the biometric in time will face the crisis…… but another big question is……WILL THIS SOLVE THE CRISIS? or next will be Handset manufacturers to be blamed….the famous IMEI that all handsets should be replaced by new ones sold by the Government of Pakistan.

Another Next will be …(after a wild dream) OMG 3G is not safe, terrorists are transferring sensitive data on the move, my dear operators are struggling to sell data but the kings who know nothing about the industry dynamics are making decisions of its fate.

Also Read: Everything you Need to Know about SIM Re-Verification

Another thought provoking angle is talking about the last elections that occurred with normal votes and all logistical push by candidates while billions spent during campaigns could just get 30 million turn out; yes 30 million which is 3 crore, now if we use it as an analogy, biometric verification through maximum 20k devices per operator with more then 50% of those deployed in top 15 cities and rest to cover 10k geographical locations where mobile subscribers dwell would be practically impossible and lets not forget the media spent they will have to do to create awareness.

On the other hand I humbly suggest the Election Commission to jump in and play a role by conducting mid term elections by letting 103 million subscribers vote at the same time while they re-verify their SIM by sticking there thumb in the biometric :)

A case study by GSMA negates the concept of registering SIMs as a part of measures to control the crime. It says; while there is no doubt that criminals and terrorists use prepaid SIM cards to help stay anonymous and avoid easy detection, to date there has been no empirical evidence to indicate that mandating the registration of prepaid SIM users leads to a reduction in criminal activities; and the lack of any registration of prepaid SIM users is linked to a greater risk of criminal or terrorist activities.

In Mexico, mandatory SIM registration was introduced in 2009 but repealed three years later after a policy assessment showed that it had not helped the prevention, investigation and prosecution of associated crimes.

This is not the case of single country only, dozens of countries have implemented a forced SIM registration regime but no where it has been witnessed that the act was helpful in reducing the crime rate.

Having said that, cellular operators are willing to undergo a re-verification of prepaid SIMs and they are only asking for a reasonable time frame.

If God forbid, something happens again, what would be the next terrorism controlling policy of the government, banning 3G in Pakistan or stopping the import of handsets that also play a part in establishing communication. Sanity must be prevailed or it would be too late.

The author is a telecom expert and can be reached at [email protected] & can be followed on twitter @sohaib72

  • I still remember when the Telcos would boost their sales by issuing SIMs without any check. The franchises would grab CNIC photocopies from someone at NADRA randomly and stamp the hell out of registrations against a few person’s CNIC. They didn’t even have that tiny bit of conscience; I’m sure they still don’t have it.

    You talk about taxes and stuff; you can’t claim the credit for it as you loot the customers with so many taxes (legal and illegal).

    Mr. Author, I don’t sympathize with your 10 Billion and 50 Million bla bla, What’s wrong is wrong and should be stopped.

    • Yup… i have been a part of this dirty game by franchises and telcos ( i was just a little employee) but there were un realistic targets set by telcos to sale maximum SIMs using any method. Competitions were arranged. Third party venders were hired for filling and registering sim in bulk quantity. There was so much that can’t be described here. Also new sim were offered with such packages that people opted to get new sim every week instead of scratch cards ( specially Mobilink). Now people dont even remember about those seldome used sims and most of them are lost or not in the custody of users..

    • You do realize taxes are imposed by the government and not telcos. They even charge with holding tax which most people don’t know how to claim when filling their income tax (talking about those who file tax returns while majority believe in not paying taxes but want good infrastructure, roads etc)

    • I also completely disagree with the writer. We all exactly know the complete mess that was created due to race between these Telecos. What you sow you will reap. This verification can only be done on war footing otherwise we have witnessed how such efforts was worked around. Dont be surprised if next is mandatory registration of International Roaming SIMs by local authorities before its use and ban on the use of Mobile Sets will common IMEI.

  • I personally remeber when Ufone started their sale, people stood in queues for hours to get a single SIM, but later the trend of competition started. The Telcos joined the race of selling more SIMs in less time. They did not bother even to verify the subscriber. The bulk of SIMs with pre-loaded balance were easily accessible at all shops and stores.

    I never used Mobilink in my life but there were two SIMs issued against my CNIC. How is it possible? I am sure the copy of my CNIC would have been used by them.

    Let us see how the re-verification of SIMs will be handled by the Telcos. Will they claim anything from customers in the name of re-verification?

  • I do like the activity of SIM verification as it will not only weed out bogus subscriber data but also help eliminate the nuisance of grey traffic. Contrary to writer’s claim, I for one do not believe that the country has 130 + million subscribers — I personally think that the number is much closer to 80-85 million and the inflated data is used by the operators to ask for concessions from the Govt on account of low ARPU as well as to justify company valuations, which are computed on number of subscribers

    If this activity is successful in rooting out grey traffic, this alone will help grow operator’ revenues on account of LDI settlemen. The increase in LDI revenue will offset any loss in revenue from any legitimate SIMs being blocked for a variety of operational inefficiencies or subscriber’s lethargy. Other positives for the operators would be optimal use of HLR & switching capacity as well as spectrum.

    I think the biggest losers out of this exercise would be Mobilink and UFone, both of whom have plenty of bogus SIMs floating around

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