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NCA Is Responsible For Spread of Illegal SIM boxes in Ghana

….ICH Is A Fraud

(ACCRA) Ghana – Pains taking and in-depth investigations by ‘The Revealer’ has revealed the National Communications Authority (NCA) as the main promoter of the worrying phenomenon of SIM BOX operators illegally terminating international voice calls into Ghana.

This is because, the national communications regulator, wrongly advised government and spearheaded the introduction of an obnoxious pricing policy which imposed a new additional communications specific tax in the form of a surtax on international inbound call termination (SIIT).

This surtax, imposed since 2009, has increased the cost of calling Ghana from abroad from $0.10 to $0.19 per minute. This mandatory imposition has contributed massively to the growth of the illegal SIM BOX business which is striving on the huge price differential between terminating international and local call rates which is approximately $0.03.

With a difference of $0.16, the illegal SIM BOX operators get to offer alternative lower price to individuals and businesses outside of Ghana who cannot afford to pay $0.19 per minute, or who prefer to pay less for international inbound traffic.

According to Deloitte, the cost of calling Ghana from the UK is 200% higher than calling Nigeria. This is because, Nigeria, unlike Ghana, charges the same rates for both international inbound and local traffic thereby providing no incentive for any illegal SIM BOXES on their market.

Deloitte also states in its September 2014 report, titled, ‘Surtaxes on International Incoming Traffic in Africa’, that, over the last ?ve years, 15 African countries have imposed a new additional telecommunication speci?c tax, in the form of a Surtax on International Inbound Call Termination (“SIIT”).

These countries include but not limited to Benin, Democratic Republic of Congo (“DRC”), Gabon, Ghana, Tanzania, and Uganda (referred to as the SIIT countries).

Delloite adds that, Between June 2010 – march 2014, Ghana lost 1,195m due to the SIIT, 7.5% revenues due to reduced mobile operator revenue,7.1% revenues lost from businesses trading with other SIIT countries, 48.1% revenue lost due to cost from African businesses trading with the country, 15.2% economic losses due to reduced remittances.

Overall, 1.2 billion minutes of airtime has been lost to governments of the few African countries including Ghana with a mandatory SIIT since 2009.

Meanwhile, mobile Operators in Ghana has reported that international inbound calls being terminated by illegal SIM boxes has risen over 279% between 2010 and 2013, which has resulted in large losses for operators and corporate tax revenue. In 2011 the Ghanaian government reported that they had lost US$5.8 million due to SIM box fraud.

In an attempt to reverse the tide of illegal SIM BOX operations in the telecommunications market in Ghana, a wrong remedy is been applied in the form of an International Clearing House (ICH).

But a critical analysis reveals that the only solution to the illegal SIM BOX business is the scraping off the SIIT just like has been done in Pakistan where the additional surtax has been found to be no solution either to increasing government revenue or combating illegal SIM BOX operations.

To be established at a cost of an estimated $40m, the ICH will only be terminating just 30% of traffic generated by the Ghanaian local telecos since 70% of their business does not interconnect. This raises questions of value for tax payer’s money since tax revenues will be shared between government and the ICH.

Questions are now being asked as to why the local telecos cannot be allowed to monitor and record their own international inbound traffic at a lesser cost to government, consumers and operators.

Questions of national security have also been raised against the establishment of the international clearing house since a breakdown of the ICH system at any point in time can lead to a total shut down of mobile telecommunications in the country.

With all the questions and queries been raised against the SIIT and the ICH, it is hard to understand why government through the NCA and the ministry of communications are hell bent on maintaining a ridiculous surtax on international inbound traffic at the expense of dwindling call volumes and lost revenues whiles insisting on establishing an ICH.

The NCA refused to comment on this report for reasons best known to them whiles the ministry of finance is unaware of the financial arrangements for the establishment of the international clearing house in Ghana.

More to come soon…

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