Ufone indulges in financial fraud, grey traffic

Aftab Ahmed

Islamabad: Pakistan Telecommunication Authority—PTA has termed actions taken by Ufone regarding Grey Sims are non-serious, insubstantial, reactive, and a mere eyewash by not penalizing its franchise involved in grey trafficking.

Ufone has paid inadequate action to the fact. The sale of grey SIMs can have profound ramifications for the subscribers and other stakeholders. It manifests in the form of terrorism, concern for national security, financial fraud, grey traffic, defamation, cyber fraud, and other illegal activities.

As a result, the PTA imposed a fine of Rs 50 million on Ufone—one of the country’s CMOs. The fine was imposed for its involvement in Grey Sims and non-compliance with regulation laws.

The authority further directing Pakistan Telecom Mobile Limited (PTML)—Ufone–to deposit the fine within ten working days. It also directed the Licensee to submit a sale of SIMs every month.

However, the PTA also noted that the licensee has failed to satisfy the Authority about the contraventions. Ufone has also failed to pay heed to the seriousness of the situation. The company’s rectifying actions are “Insubstantial, reactive and a mere eyewash.”

In Feb 2020, a show-cause notice was served to Ufone—a subsidiary of PTCL but operated by Etisalat of UAE after the privatization of PTCL in 2006—and hearing of this show cause notice was done on June 2020, and Ufone team headed by its CEO, Rashid Khan appeared before the authority through video conference.

Meanwhile, the Ufone team submitted a written reply as well as argued before the Authority over the three charges. The charges include not taking appropriate actions against its franchise/retailers, issuance of grey SIMs by selling SIMs through the door to door/kiosk, and selling SIMs before the price of Rs 200 and also prayed the Authority to withdraw the show-cause notice.

Rejecting Ufone’s prayer before the Authority, the PTA issued an order that reads in detail by justifying its charge sheet against the licensee—Ufone—and details; Ufone action against its Franchisees/Retailers.

The CMO reply submitted before the PTA said that it took action against its 243 franchises and 566 retailers for violating regulations and SOPs. Moreover, Ufone also terminates 9 franchises and 566 retailers as well.

However, PTA noted that Ufone took action only against the “Sale Channels.” It did not take any action, particularly 15 franchises mentioned by the Authority in the notice. They are involved in selling SIMs used in grey trafficking.

The sale of grey SIMs has profound ramifications for the subscribers and other stakeholders. It manifests in terrorism, concern for national security, financial fraud, grey traffic, defamation, cyber fraud, and several other illegal activities.

The Authority also disagreed with Ufone’s stand that all the SIMs issued with subscribers’ consent. However, the Grey SIMs often issued without the subscribers’ knowledge/consent fraudulently.

The PTA further observed, “It is the primary responsibility of Ufone to ensure its franchisee/retailers comply with the applicable regulatory regime, regulations, SOPs, and determinations of the authority.”

Kiosk Activity

Ufone management denied carrying out door-to-door kiosk activity. The Authority’s order further noted that the Licensee was carrying out door-to-door kiosk activities without the authority’s approval. The data of the survey also showed to the Licensee.

The PTA also noted that Ufone’s argument was incorrect and required a quantum leap of justification. Hence, Ufone is continuously violating the Authority’s directions.