“To say that the telecoms regulator should not verify the number of minutes of incoming international calls declared on paper by the telecom operators is just like saying Customs should not do a physical and or electronic check to verify if goods imported into this country tally with what importers declare on paper.”
That was what the Director of Regulatory Administration at the National Communication Authority (NCA), Joshua Peprah recently said about a court ruling that prevents the NCA from installing international gateway monitoring equipment on the switches of telecom operators to measure, in real time, the exact number of minutes of international calls coming into this country.
The NCA, and for that matter government, has always argued that monitoring the international gateway is important for two reasons; to check SIM box fraud and also to secure revenue for the state.
SIM Box fraud is the practice where some rascals abroad and in Ghana work together to channel calls through the internet and pass them through some electronic boxes in Ghana. The electronic boxes are called SIM Boxes because the fraudsters have inserted several local SIM cards in them, and they route the international calls through those SIMs before terminating the call on the phone of the one the call was meant for. That way the international call appears as a local call, and the fraudsters get the international rate, but the telcos get the local rate, and thus government tax on that money becomes tax on local rate instead of on foreign call rate.
The government insists that the monitoring equipment will check this fraud (even though it is still not clear how) and secure revenue for both the state and the telcos. Even though government has said that the revenue aspect was not the main focus, it seems, from some of the steps the NCA has been taking lately, that government’s main focus is the revenue and not necessarily to fight SIM Box fraud.
Meanwhile, the telcos have argued that they have systems in place to fight SIM box fraud and do not need government’s monitoring system to do that. Indeed, the records show that SIM box fraud has gone down a great deal even without NCA’s monitoring equipment in place. The NCA itself admitted that in 2010 when this whole monitoring argument started, there were over 78,000 suspected SIM box operations in the country, but now the number has reduced to a bit over 600.
Because the courts stopped NCA from installing the monitoring equipment, government set incoming international call rate at 19 cents per minute and legislated that 6 cents from that amount should go to the NCA on behalf of government (Electronic Communications Amendment Act, Act 786, 2010). That law has proven to be good for the state because the NCA raised more than US$64million from the 6 cents off the 19 cent last year alone. Prior to that, Minister of Communication had reported that the country lost about US$5.8 million a month in taxes to SIM box fraud.
But the question is, if indeed the NCA means to monitor international gateways of the telcos purposely for revenue for the state, what is so bad about that? Like Mr. Peprah said, it is just like importers declaring their goods on bill of laden, and yet Customs and probably even other agencies at the ports doing electronic and physical checks to verify the records for themselves. In principle, no telco is against Customs doing a physical check on anything they import in to the country, so why are they so apprehensive of the international gateway monitoring – what do they have to hide – what is the fear – what is their main concern.
The telcos have advanced two main arguments – one, that they have invested millions of dollars to build their network to provide a certain level of quality of services, and to also check fraud on their systems, so additional equipment from the NCA would mean international traffic would go through more equipment than what the networks have installed, and that could affect the call quality, for which the telco could be fined by the self same NCA. On that same score they argue that if the calls go through the NCA’s equipment it could lead to an interference of customers’ privacy and customers could sue the telco (not the NCA) if their privacy is interfered with.
Indeed, the court ruling against international gateway monitoring was because some Ghanaians actually took the NCA, Attorney-General and five telcos to court to stop the installation of the equipment because they feared it would interfere with their privacy. The court upheld their case and they won. Now the telcos have been conveniently referring to the ruling anytime this argument comes up. So the only way the NCA could go ahead with that is to go to Appeals and get the court’s decision overturned.
The second argument is that the telcos believe they have better ways of checking fraud on their systems so they do not need extra equipment from the NCA to do that. Most of the telcos have employed no less a vendor than Ericsson for that and other services. Moreover, on the revenue side, the telcos do give the NCA monthly call data records (CDR), which show the number of minutes of incoming international calls, to enable the NCA to determine how much money is due the state thereof. The NCA does a verification of the records before issuing invoices for payment.
FIXED INTERNATIONAL CALL TARIFF
The telcos and some pundits also argue that fixing of incoming international call rate at 19 cents is encouraging SIM box fraud, and also not consistent with the practice in a country like Nigeria and in Europe for instance. The telcos picked and chose examples that suit their argument. In Nigeria local and international call rate are almost the same, and there is no monitoring.
But the NCA has practically laughed off that argument saying in nearby countries like Togo and Cote d’Ivoire, incoming international call rates ranged between 54 cents and 63 cents. Secondly, in Nigeria, there is a regulatory fee of five per cent of telcos’ profits, but in Ghana the regulatory fee is only one per cent, so Nigeria can afford to let go of revenue it can get from international calls, but Ghana cannot and will not.
The NCA also said the argument that European regulators do not monitor international gateways so Ghana should not, is also ridiculous because the economic situations of Ghana and Europe are different, so the policies cannot be the same; whereas Ghana needs money for schools in villages, Europe may not necessarily need that, and Europe may even have several other and better sources of national income.
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