Rs 100m penalty on Zong for selling illegal SIMs
Pakistan Telecommunication Authority (PTA) has imposed a penalty of Rs100 million on Chinese cellular operator Zong run under the licene of China Mobile Pak Limited for contraventions and non-compliance of regulatory laws including the sale of grey SIMs, unauthorized sale of SIMs through kiosks activities and non-serious conduct of the licensee in terms of implementation of the minimum sale price for a mobile SIM.
The panel comprising Chairman PTA, Maj-Gen (Retd) Amir Azeem Bajwa, Member (Compliance and Enforcement) Dr. Khawar Siddique Khokhar and Member (Finance) Muhammad Naveed passed the enforcement order against China Mobile Pak Limited (CMPak Limited).
PTA observed that keeping in view the seriousness of the issue and national security implications, the Authority many times notified the licensee with regards to the violations on its part and directed to take tangible measures against the sellers involved in selling SIMs fraudulently which were purportedly being used for illegal activities. These communications were issued to the licensee on a monthly basis for blocking of SIMs being used in grey trafficking.
It is remembered that a survey was carried out by the Authority in December 2019 and it was revealed that the licensee is not selling SIMs as per applicable law particularly PTA’s determination
The law enforcement agencies are fighting to combat terrorism, corruption and tax evaders in the country. On the contrary, the terrorists and cheaters adopt new technology to get their goals. The government established Cyber Wings in the major cities to trace the illegal SIMs that are being used in terrorism and heinous crimes. These wings were working well in the past that almost control the terrorism through mobile phone SIMs but unfortunately it is not active in these days.
The exchanges which converted international voice calls from various countries and Pakistan into local GSM calls used Chinese SIM boxes (boxes fit with GSM SIM cards of Chinese cellular provider). The law-enforcement agencies busted illegal VoIP exchanges in Punjab and across the country. These SIM cards were being used to seek information from the high profile personnel.
The raids were conducted by the PTA with collaboration of FIA cyber crime wing. Many persons have been arrested in connection with this racket.
The purpose of these SIM card centres is to make revenue losses to the governments and make international calling cheap but sources in the crime branch suggest that this particular centres were being used to make calls to the sensitive departments in the country.
The SIM box setup is considered as a financial loss to the government of Pakistan. These kinds of exchanges cause a loss of millions of rupees to the telecom department too.
Most cellular operators have stopped selling of illegal SIMs to the suspicious persons but Chinese company did not follow the directive of PTA and continue selling of illegal SIMs to mint the money on the cost of lives of the innocent people because these SIMs use in terrorism and other heinous crimes and even fraudulents also use these SIMs to call the people that you have won new brand Corolla car and Rs 1 million so call us to get your awards. Even swindlers use Whatsapp to befool the innocent people. These are the reasons, Pakistan Telecommunication Authority (PTA) has imposed plenty Rs 100 million to the Chinese cellular firm Zong.
The reliable source said that it is true that the Zong management has given the target to its employees to sell the maximum SIMs in case fail to achieve target, they will sacked from the job. It is surprise to know that the Corporate Wing fully involved in the illegal business.
The sources inside PTA said all new SIMs are being issued through Biometric Verification System (BVS) across the country if we found any company involved in the illegal business, we will take stern action again them.
It is remembered that a survey was carried out by the Authority in December 2019 and it was revealed that the licensee is not selling SIMs as per applicable law particularly PTA’s determination.
It was also observed that the licensee, its franchisee/retailers were involved in door-to-door/kiosks activity without prior approval of the Authority as well as, were selling SIMs below Rs200 as determined by the Authority. As a consequence, the Authority issued a show-cause notice dated 10th February, 2020 for these contraventions.
The licensee submitted an interim reply and later submitted its final response to the notice and stated that CMPak has been abiding by the terms of Subscribers Regulations and SoP which is evident from its efforts wherein a thorough check was run against 176 retailer ID’s and consequently 76 warning letters were issued along with levying of penalties to franchise holders who were found to be operating contrary to the regulations and the SoP which was followed by termination of 2 Franchise Agreements. That in compliance of the SoP and regulations, SIM’s issued in contravention to the regulations and SoP were blocked and action to curb issuance of illegal SIM’s is still operational. That on 25-09-2018, instructions were issued to all Franchise holders viz their activities being monitored so as to ensure that the franchise is not involved in any fraudulent activity, including but not limited to grey trafficking, fake activations, document forging being in contravention to SoP and regulations.
After careful examination of the contents, the licensee’s replies to the notice including verbal submissions made during hearing and written arguments submitted vide letter dated 10th May 2020, findings of the Authority are as under; The licensee submitted that in aggregate action has been taken against 183 franchises/retailers for violating Regulations, SOP and the determination.
As per the licensee’s submissions, a total of 176 retailers had been terminated and 76 franchises had been warned or fined for an amount varying from Rs.5,000/- to Rs.150,000/-. Furthermore, the licensee has also submitted as documentary evidence two letters showing termination of franchises for violation.
In this connection, the central question which needs to be determined is whether the licensee has taken adequate steps commensurate with the seriousness of the issue. Unfortunately, the answer to this question is in the negative. Use of grey SIMs in illegal activities and heinous crimes is a serious national security concern. Moreover, the menace of grey SIMs and trafficking has been causing immense loss to the national exchequer on regular basis. More so, such activities also hamper the legitimate business of other license holders.
The Authority in order to curb this problem has taken and is continuously striving for implementing regulatory provisions to bring the offenders to justice. It is appropriate at this juncture to highlight that the Authority has issued several reminders to the licensee on monthly basis informing the licensee about the sale of SIMs being used for illegal activities and grey trafficking, however, despite the continuous reminders, the licensee took action only against the sale channels pointed out by PTA.