Ghana Comms Minister Promises Simbox Crackdown

It is funny how governments get really keen to protect their people, when this coincides with threats to the amount of tax they collect. Ghana’s Communications Minister, Dr. Edward Boamah, has promised a crackdown on simbox fraud; you can read the story at GhanaWeb. Boamah said he was keen to screw more tax money out of people making phone calls… ahem, I mean he promised to keep the cost of international calls artificially high because it is a great way to make money… ahem, I mean he was deeply concerned that…

People are losing businesses because when you receive a call it appears [with a] Ghana number… sometimes you think it is somebody calling you to ask for [a] favour so you don’t even pick, so you miss an important call.

Yeah, right. Who would doubt that missed calls caused by inaccurate CLIs is a top priority for Ghana’s government?

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.

7 Comments on "Ghana Comms Minister Promises Simbox Crackdown"

  1. Hi Eric,

    interesting article, especially this bit for me

    “But Communication Minister, Dr. Edward Omane Boamah says steps are underway to make the practice disincentive.

    He noted that quite a considerable amount of time has been spent on the inter-connect clearing house, a system that will provide a common platform for both local and international calls.”

    so how will they “make the practice disincentive.” ? I can only see changes to legislation and convictions making it slightly less attractive

    what will the new ” inter-connect clearing house” actually achieve? is it a gateway or DCH? It will only ensure tax is paid at current traffic levels, this indicates to me he doesn’t trust the operators and I suspect the operators use bypass as an excuse for the reduced revenues (or tax payments) I doubt he cares about “SIMBox”

    The SIMBox players will still be bypassing any gateway, no records will be seen in DCH, if all domestic operators react and reduce the bypass it will be seen in the DCH thus pay more tax so I don’t see much of an incentive for them to do anything about it

    Dan

  2. @ Dan,

    There’s one hero in the assurance universe who has the savoir faire, je ne sais quoi, and debonair style needed to answer your questions. Calling Wampambaman! Wampambaman, please save us!

  3. Eric,

    Its nice to see the lone hero in an Operator or Group taking action rather than just disconnection and “recording” leakage, I like the whistle-blower approach especially

    As in the case above Operators need to take an intelligence led approach and formulate other strategies and tactics to identify the perpetrators, make change to remove the opportunity or reduce the business case and eventually get the prosecution

    Unfortunately I see many other Operators and countries advertised every day, “grey routes” “ncli routes” are openly touted in social networking sites like linkedIn Groups, I even saw one advertised in a Fraud Group!

    This intel is gold dust and should be used to full effect, turn to face inwards also and look at the retail/dealer commissions, its fairly tricky getting hold of 1960 SIM’s in one go and that’s really not a large operation in the wider SIMBox world, I have seen many times that disconnected in a day, every day…

    Dan

  4. Avatar Nixon Wampamba | 18 Dec 2014 at 7:31 pm |

    Hi Eric,

    I think the Minister was not very clear in his statement. The DCH will not prevent SIMBOXing, but as part of the contract whoever is selected will provide support for SIMBOX detection. An DCH is not needed in Ghana and will result in increased costs that will be passed on to the Customers, which is bad. The DCH model is a very old one and no developed country uses them since operators can connect to each other with ease.

    In Ghana operators cannot control the fraudulent use of SIMs, as we do not have a unique ID in the country, so the fraudsters abuse this loophole to acquire thousands of SIMs to SIMBOXing.

    SIMBOX is a product of arbitrage, and if the government does not address this, then it is an open field for SIMBOX. In countries like Nigeria or South Africa, there is no arbitrage, hence no SIMBOX.

    Hope that answers the questions.

  5. Wampambaman heard the call, and came to the rescue! Many thanks for your contribution, Nixon.

    What you say is similar to something said by the CEO of the Ghana Telecommunication Chamber: “we don’t see this as a law and order problem, we don’t see this as a problem created by technology, we see this as a pricing problem.”

    It’s tempting to dive into working out how to enforce rules. But when the rules say that it’s legal to connect a call through route A for price X, it’s illegal to connect the same call through route B for price Y, and we know X > Y, then we should also ask what the purpose of those rules are, and whether they are good rules. It looks like Ghana’s government is compounding bad rules with more bad rules, by seeking to force private businesses to connect via a monopoly that suits the government, but not anyone else.

  6. Unfortunately countries believe that if you have a service that people want, and you increase the price then you will receive more money. A simple example is when you have a dam on a lake that is generating electricity, so flawed logic leads one to extend the dam to get more electricity. But if you extend the dam, this does not increase the water, it is the same water, hence the pressure will drop resulting in the same electricity generated as before. Are you lost yet?

    So the same have happened with SIMBOX fraud. Countries used to have these standard rates for calls and then I clever guys suggested “Look all these foreigners are calling our people from these rich countries, we should charge them more and make more money”. So they increased the prices by 100%, not realizing that most of the calls come from diaspora, who in most cases do not want to spend a lot of money calling home. So these Diaspora use calling cards and other cheaper methods to reach their relatives at home. All these cheap calls cannot be routed through the legal standard route as the price is too high, so they are routed through SIMBOXes.

    This issue is growing all over Africa, as governments across the continent I using the flawed logic to try to prop up their budgets with increased revenues from International calls. But these same governments did not realize that if there is a need for a service, and it is priced too high, then normal people resort to illegal methods.

    Not only is international traffic being bypassed, most diaspora are now starting to use internet based services like Viber. The situation is so bad that Silicon based companies are all jumping on the wagon. Now facebook has voice, and What’s App (the most popular app in Africa) is implementing voice next year.

    What is the result of all this? Well, customers are changing their behavior towards the new technology, which has less margins for the operators and less taxes fro the governments.

    The moral of the story is that African Government are helping the transformation of telecoms to the 21st century, hence within a couple of years most people will be using internet based services to make cheaper (if not free) calls, and governments will have to attend courses in water pressure to build dams that generate more electricity with the same water.

    RA Manager

    • @ RA Manager,

      Thanks for your thoughtful comment. It occurs to me that it is doubly pointless to use international call charges as a way to tax the African diaspora. If these people have moved away from family to get better-paid jobs elsewhere, then it is likely they also send money to help their family. Every penny taken through expensive calls is a penny not sent to the family. On top of that, expensive calls discourage families from staying in contact, and discourages the African diaspora from staying connected to Africa. But the diaspora accumulate wealth, skills, relationships and practical knowledge that could help their homelands – so why penalize them for wanting to stay connected to Africa?

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