Telecom operators lose $25m annually to fraud — ministry

AMMAN — As telecom operators in Jordan lose some $25 million annually due to SIM box fraud and the illegal commercial use of Voice over IP (VoIP) service, the government will consider imposing more deterrent penalties against violators, according to the ICT Ministry.

“We will introduce amendments to the Penal Code to combat illegal smuggling of international calls whether via SIM boxes or illegal commercial use of VoIP as the current penalties are not deterrent,” ICT Minister Azzam Sleit said last week.

Currently, the fine for such violations is JD500, which “is not a big enough amount to prevent the occurrence of such a violation," the minister said. 

"We have to reconsider this fine to make it more deterrent.”

SIM box fraud occurs when individuals or groups purchase SIM cards that offer free or low cost calls with the intent of using them for international calls.  

The SIM cards are then used — via special devices — to channel long-distance or international calls away from mobile network operators and register them as local calls on their networks, costing operators significant losses in international phone call revenues, according to Revector, a UK-based anti-fraud company.

However, Sleit stressed that the government has no plans whatsoever to block VoIP applications such as Viber, Tango or Skype, as some regional countries have done amidst increasing losses by telecom companies due to a significant drop in the usage of voice services.

Zain Jordan CEO Ahmad Hanandeh said last week that telecos do not have any problem with individual usage of VoIP applications, but they are against the illegal commercial usage of these applications, which causes some $25 million in losses annually to both telcos and the government.

“Around 250 million minutes of international calls in Jordan are smuggled, whether through SIM box fraud or the illegal commercial use of VoIP. The government needs to do more to prevent this,” Hanandeh told The Jordan Times last week following a press conference to announce the MENA ICT Forum 2014.

“This is a means to steal the country’s resources, and penalties should be more deterrent. About 20 per cent of international calls are smuggled using these methods,” he noted.

In 2011, one local mobile operator lost JD5 million as a result of "SIM box" fraud alone, while several Jordanians were arrested for involvement in the fraudulent usage of mobile SIM cards, according to the Public Security Department.