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Business News of Tuesday, 30 September 2003

Source: Chronicle

32 ISPs Caught in NCA Dragnet

Some 32 Internet Service Providers (ISPs) have been identified to be involved in fraudulent activities resulting in the loss of $30 million to Ghana Telecom (GT) between April and August last year, an official inquiry has confirmed.

A Chronicle publication last March that GT was losing $1million every week due to fraudulent activities engaged in by some Internet Service Providers led to the setting up of a probe by the National Communications Authority (NCA) to investigate the allegations.

According to the report the state lost billions of cedis through illegal termination of calls and the use of Voice Over International Protocol (VOIP). GT sources said the company could have generated about $15 million from the operations of these service providers last year using the current rates.

Major E.K. Tandoh (rtd), acting Director General of NCA and chairman of the three-man technical committee which included representatives from Bureau of National Investigations (BNI) and the Internal Revenue Service (IRS), which probed the activities of the service providers told The Chronicle last Friday that the NCA has written to the ISPs involved to refund the lost monies. He said those who would fail to repay, would have their licenses withdrawn and prosecuted.

It has been established by a Chronicle source that Tower Communications, Ada Communications, Danpong Bus Centre, Danpong Fiber and Basic Refrigeration and Solar Light Company are some of the ISPs, which were involved in the malpractice.

Major Tandoh said after identifying the culprits the NCA had their systems blocked, adding that with the assistance of GT it has been possible to plug the multi-million dollar losses accruing to the nation through leakages in the system by providing operators a simplex system instead of a duplex one.

The NCA boss said measures put in place by the authority assisted GT to make ?30 billion as profit last year. "Only the operators of GT and Westel Communications have the licenses to use VOIP to make international calls which is cheaper," he said stressing that the billions of cedis that GT lost from the fraudulent practices by the ISPs was unacceptable and illegal.

Revenue from international telephone traffic revenue at GT has been dwindling these past few years. In 1998, the international telephone traffic revenue was over $42.0 million but had declined to about $14.0 million by 2002 even though over 100,000 new lines have been installed since 1998.

Telecom experts described the decline from 1998 to 2002 of about 45% as alarming and that steps must be taken to reverse the trend although information gathered indicated that revenue might go down further this year.

It is believed that a lot of fraudulent activities are impacting negatively on the revenue of the company of which termination of international gateway of the company is one.

Telecom service providers who apply for huge quantities of lines ostensibly to operate their businesses use them to terminate international traffic which is offered to the GT network as local calls, thus denying GT foreign exchange revenue.

Another form of fraudulent activity is the callback, where international calls can be made on the GT network but off telephone exchanges outside the country that are located in the USA.

It is believed that some workers of GT connive with some of the Internet operators to cheat the company. "They even connive with some operators to use the duplex system instead of the simplex system," a source at GT said.

The lucrative 'callback' system normally deprives the country revenues, which ordinarily would have gone to the national telecom company, but is rather split between the operators.

Major Tandoh said the NCA would not shirk its responsibility to ensure a level playing field in the telecommunication sector. It would also not allow fraudulent practices to cripple the efforts at improving the sector for the better.

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