SIM verification drive may discourage foreign investors

Retailers threaten to stop verification after raids by law-enforcement agencies.

LAHORE: Disconnect between different government departments may result in a lacklustre response to the next telecommunication spectrum auction, on which the country is banking for attracting more foreign investment.

According to experts, the government, on the one hand, is making efforts to lure investment in the telecom industry, while law enforcement agencies (LEAs), working under the Ministry of Interior, are making it almost impossible to achieve this.

The Pakistan Telecommunication Authority (PTA) floated a tender last week to engage market research and marketing consultants for the auction of two spectrum blocks (850Mhz and 1,800 Mhz) for next generation mobile services to assess the market and attract potential investors.

However, under a drive to verify over 103 million Subscriber Identity Modules (SIMs) using the Biometric Verification System (BVS), different LEAs have created impediments in the way of telecom operators and retailers.

“This is not only undoing efforts of the government to attract investment, but is also sabotaging the verification process as retailers are contemplating halting the exercise,” said an official of a telecom company.

Cellular operators rely heavily on retailers for the sale of their SIMs, thus utilising them for re-verification is the best way to get the process completed within the given deadline as service centres and franchises, especially in smaller cities, are not enough to cater to such a large subscriber base.

“We have been receiving complaints from the retailers that LEAs raid their shops and confiscate BVS devices and SIMs, which is illegal because BVS prevents them from selling unauthorised SIMs,” said the official.

More than 60,000 retailers, tasked with the verification of SIMs, have threatened the telecom operators that they will stop the process after the action taken by LEAs.

This has put the verification of over 100 million SIMs in just 90 days in jeopardy, which will not only hurt the government’s plan to tighten security, but will also make a huge customer base suffer as a large number of unverified SIMs will stop working after the deadline.

“The issue has been raised several times in meetings with the government but the harassment of retailers has not been stopped,” the official added.

“How can the government expect an encouraging response to the remaining spectrum sales at a time when Pakistan has a negative image and no organisation is willing to invest here,” said the expert. “The only sector attracting huge investments is being harassed.”

Earlier, the government, he added, introduced the ‘789’ system for SIM registration, which cost the industry billions of rupees and after that it implemented BVS and that cost more money for its installation at sales centres across the country.

“Even after that, there is no guarantee that LEAs will not link any terrorist attack with the telecom operators, which suffer losses of billions of rupees due to such incidents,” he said. “This practice should be stopped until it gets too late and the biggest source of FDI dries up.”

Published in The Express Tribune, January 22^nd,  2015.

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