The New Patriotic Party (NPP) has promised to remove the US$0.19 per minute floor price of calls coming into Ghana from abroad if voted into power for a second term this year.
Vice President Dr. Mahamudu Bawumia, who made the promise in his speech at the NPP Manifesto launch on Saturday, said the decision is meant to weed out SIM Box fraud for good.
The 19 cents per minute floor price is backed by law – Electronic Communication Amendment Act, Act 786 – which enjoins telcos to charge a minimum of 19 cents per minute of every call coming into the country from abroad, and the National Communications Authority (NCA) gets to keep 32% of that, which is 6 cents.
In 2015, sections of the media, quoting a supposed NCA audit report, alleged that at least four telcos – MTN, Tigo, Vodafone and Airtel had been found guilty of violating that law by charging less than 19 cents per minute of calls coming from some countries.
All four telco were fined hundreds of millions of dollars for the offence, even though they reportedly paid the required 6 cents per each of those calls to the NCA.
The arbitrage debate
Meanwhile, industry players have till date maintained that the 19 cents floor price is so high, compared to domestic call rates, so it creates an arbitrage, which incentivizes fraudsters to invest into call bypass equipment called SIM boxes, and route international calls through local SIM cards, making them appear as local calls.
By so doing, the fraudsters, working with partners abroad, are able to keep the difference between the 19 cents and the local call rate, while the telcos and government lost hugely.
The fraudsters are even able to charge less than 19 cents and still make a lot of money after taking out the very low domestic call rates.
The telcos had always proposed that the floor price should be removed for the players to compete for the call termination at their own rates, promising that they will still pay the NCA the 6 cents per minute of every call, no matter how low or high they charge.
Indeed, some countries make both domestic and incoming international call rates almost the same, so there is no incentive for fraudsters to invest into SIM boxing.
NCA’s main arguments-in-chief against the removal of the 19 cents floor price are two. Firstly, that the floor price is higher in some countries (up to 25 cents) but SIM box fraud is not a problem in those countries, and secondly, that the bad SIM registration practices of telcos is more of a facilitator of SIM box fraud than the 19 cents floor price.
The counter argument of the telcos regarding bad SIM registration is that, the exercise requires a proper national ID verification system, but no such system exists apart from scattered ID systems, most of which could hardly help to verify any ID in the country.
Bringing closure to the over 10 years debate, the Vice President said the current regime, under which the law insists on 19 cents per minute floor price, out of which 6 cents goes to the NCA, will be replaced with a new regime, where market forces will determine the call rates, but NCA still get to keep the regulatory 32%.
A reliable industry source explained to Techgh24 that it means each telco would be allowed to negotiate their own rates, whether higher or lower than 19 cents, but they will still pay the 32% to NCA.
“So whether a telco charges 10 cents or 30 cents, they will pay the regulatory 32% of that amount to the NCA,” the source said, adding “this is what we have been saying all these years, that let the market forces fix the prices and government still gets the 32%.”
Simboxing is VoIP?
SIM Box fraud has over the years robbed telcos and government of millions of dollars. There have been several arrests of SIM Box fraud operations in parts of the country, some of which involved foreigners and some well-respected Ghanaian businessmen.
In spite of the arrests, the crime continues as some argue that it should be legitimized and regulated because it is just the efficient use a of technology called VoIP (Voice over Internet Protocol) to terminate international calls in Ghana for far less than the floor price government stipulated.
Meanwhile, some also think it cannot be legitimized as VoIP because the people involved have not invested money to build networks like the telcos have and they do not invest in SIM card, market them to customers and build a subscriber base like the telcos have, so they cannot be allowed to parasite on the telcos’ investment.
It is expected that the removal of the floor price, coupled with the proper ID verification for the ongoing SIM re-registration exercise will complete disincentivize SIM box fraudsters and discourage them from investing into call bypass equipment.
Meanwhile, at the same Manifesto launch, the Director-General of the NCA, Joe Anokye has promised that in the next NPP government, they will connect some 2,016 unserved and under-served communities with broadband and voice connectivity, under the government’s universal access program.
He said in three and half years, government, through the Ghana Investment Fund for Electronic Communication (GIFEC) provided voice and broadband connectivity in 500 communities, as against the 78 that the previous government did in eight years.
Joe Anokye said, as part of the NPP’s telephony and digital inclusion program, they have inclusive innovations that would ensure that even the visually impaired are not left out of the benefits of the ongoing digital revolution, adding “no one will be left behind.”