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Policy Recommendations Details

About SDPI

The Sustainable Development Policy Institute (SDPI) is an independent, public interest think tank that provides advice to public, private and voluntary organizations and undertakes policy-oriented research and advocacy. SDPI was founded in August 1992 on the recommendation of the Pakistan National Conservation Strategy (NCS), also called Pakistan’s Agenda 21.

Mission Statement

To catalyze the transition towards sustainable development defined as the enhancement of peace, social justice and well-being, within and across generations.

About Study Group on Information Technology and Telecommunication

This group comprises of consultants, scientists, educationists and economists who meet periodically to discuss and evaluate current developments in the rapidly evolving fields of telecommunications, computers, data processing, networking, mass media and other issues related to the generation, processing, management and use of information. The purpose of these meetings is to create awareness amongst both public and private sectors of the importance of exploiting useful information resources, address existing difficulties in this respect, foresee future developments which might have an impact on the national economy and society at large. The group also undertakes the preparation of policy and planning recommendations that could subsequently be pursued by the relevant agencies.

Date: February 19, 2015

Chair: Dr. Ijaz Shafi Gilani

Coordinator: Brig. (Retd) Mohammad Yasin

Participants: List attached at Annexure A

Main Points of the Meeting
 1. 
Agenda

To Discuss Re-verification of SIMs through Biometric Verification System: Gains and Losses

2.  Recommendations made by the Study Group: 

  • Historically, telecom intelligence has been the primary information gathering tool most popular with the security agencies. In modern-day forensic environment and in Pakistan the terrorists bank heavily on modern telecommunication channels to communicate. However, our Law Enforcement  Agencies are way behind in catching with the technologies. Therefore, there is an immediate requirement for our security and intelligence agencies to be in step with the technology to be able to use it effectively. 
  • The perception that SIM is the cause of all ills is misleading and without any evidence. There is a need to create an ecosystem where all the stake holders, the Law Enforcement Agencies, Telecom Industry, and the Regulator should sit together, build a trust level and take advantage of the latest trends in ICT to be ahead of the criminals.
  • Cybercrime is one of the biggest threats facing Pakistan, because the terrorists are shifting their global communication to cyber space. Pakistan is one of the few countries where the cybercrime law is yet to be implemented. Its full implementation must be ensured. 
  • Equally important is an effective cybercrime unit to ensure that the investigation and subsequent prosecutions are handled by ICT professionals. Presently, National Response Center for Cyber Crime (NR3C), a setup under FIA, is responsible for the cybercrimes. This organization is short of professionals and lack modern techniques. It is, therefore imperative that a dedicated and an effective unit must be created with the capacity to enforce the laws. 
  • Taxes on IT and telecom services and infrastructure are relatively highest in Pakistan. This is not only a deterrence to investment, especially the foreign direct investment, it’s also an incentive for illegal gateway exchanges. The government should reduce such taxes which would result in reducing grey traffic because of reduced call rates. This core issue must be addressed sooner than later. 
  • Repeated re-verification of SIMs must be avoided by effective planning. 
  • Deadline for re-verification of SIMs should be extended to properly conclude the process. We need to strike a balance between the vital need of re-verification/registration of SIMs and the convenience of the people, especially of rural areas. 
  • To minimize loss in revenue to the mobile operators and tax loss to the government, efforts should be made to block a minimum number of SIMs.

 3.   Background

The government has directed mobile telephone operators to re-verify all SIMs through biometric verification system.  The exercise would involve about 103 million SIMs that have to be verified in 90 days. The work has already started. Reportedly, there are about 60,000 biometric machines in the country. However, how many of these systems are operational is not known.

The telecom industry and mobile operators continue to significantly contribute to Pakistan’s economy in taxes. This becomes possible because of a large number of users of IT and cell phones. The law enforcement and security agencies are able to gather a large volume of intelligence through interceptions. Besides, the time allowed for re-verification is very unrealistic. The entire population of mobile users, particularly from far-flung areas will find it very difficult to get their SIMs verified before the deadline. The questions that need to be answered are:

What would the exercise cost? How many SIMs will be blocked?  What would be the loss in revenue and taxes? Will the volume of intelligence gathered through interceptions reduce? Will it reduce grey traffic? What difficulties and hardships the mobile telephone users will undergo?

The SDPI’s Study Group on IT and Telecom comprising regulators, policy makers, academics, IT and Telecom professionals, and mobile telephone operators met on February 19, 2015 to discuss the issue.

4. Proceedings

Brig. (Retd) Mohammad Yasin, Senior Advisor at Sustainable Development Policy Institute (SDPI), opened the proceedings by welcoming the participants. He gave a brief introduction of SDPI, its purpose, and shed light on the working of the Study Group on Information Technology and Telecom. He informed the participants that most of the recommendations made by SDPI have been implemented by the government in one form or another, which indicates the success of the organization. Thereafter, Ambassador Shafqat Kakakhel, Chairperson of SDPI’s Board of Governors, and Dr. Ijaz S. Gilani shared their experiences regarding SDPI’s contribution to the society over the years. Shafqat Kakakhel told the participants about the research work at SDPI  and how the institute is ranked amongst the prominent think tanks both globally and regionally. 

Speakers:

  • Dr Syed Ismail Shah, Chairman, Pakistan Telecom Authority

  • MrAmmarJaffri, National Coordinator, ICT4D Task Force, and Chairman, Cyber Security Task Force

  • MrAslam Hayat, Vice-President (Corporate Affairs), Telenor Pakistan 
Main Points of Dr Syed Ismail Shah Presentation

The topic of the presentation made by Dr Syed Ismail Shah was “Re-Verification of Existing SIMs through BVS – Regulatory Prospective”. Before discussing the actual topic in detail, he elaborated upon the successes achieved with the auction of 3G/4G spectrum. He said that very little chunk of spectrum has been auctioned whereas PTA and FAB have made available a considerable additional spectrum for future auctions. Thereafter, regulatory aspects of the subject matter were covered. Main issues highlighted during the presentation are as under:-

a.  Actual focus of the spectrum auction was the availability of Broadband Services in Pakistan and not the high upfront spectrum fee. International experiences show that countries like India where spectrum auction brought very high upfront investments are not performing very well in terms of broadband services. On the contrary, results in Pakistan are quite encouraging with approximately 8.5 million broadband users by end January 2015.

b.  Registration of mobile SIM cards and their verification in Pakistan has evolved over the years. Before 2008, active SIMs were sold, documentation was not proper while verification was carried out in offline monthly batches from NADRA. Now inactive SIMs are sold, which are activated after online biometric verification of subscribers from NADRA. Moreover, documentation is electronic and each sale channel is uniquely identifiable.

c.   Pakistan has passed through several verification drives in the past like 667 and 668.During these campaigns, a considerable number of SIMs were regularized whereas some were blocked (those which could not be regularized).  However, due to identity theft issue mainly caused by public availability of voters’ lists, concerns were raised by Law Enforcement Agencies (LEAs) over un-authorized SIMs.

d.  As per GSMA White Paper on “Mandatory Registration of Pre-Paid SIM Cards” dated November 2013, no evidence exists that suggests reduction in crime due to mandatory registration of Pre-Paid SIM cards.

e.  UAE also carried out the registration of SIM cards during 2012-2014 under a campaign titled “My Number My Identity”. However, it took them 27 months to register /verify 16 Million SIMs.

f.  Pakistan launched a system, the first of its kind in the world, for the issuance of SIMs after Biometric Verification from 1st August 2014.  Re-verification of existing SIMs was under consideration among stakeholders, however the process was accelerated due to Peshawar incident and PTA was asked to complete the task in 91 days.

g. 
During the current re-verification campaign, a total of 103 Million SIMs are being verified in  91 days in two distinct phases with the help of around 97,000 biometric devices.  Fifty million SIMs (registered on 38 million CNICs) have been verified so far while 5.8 million SIMs have been blocked.

h.  The re-verification shall not only impact consumers but also the telecom industry, which shall be taking the toil in terms of falling revenues thereby reducing tax collection by the government.  Impact on LEAs in terms of loss of interception capability is a question which can only be answered by LEAs. 


Main points of Mr. Ammar Jaffri’s Presentation

Law enforcement perspective was covered by Mr. Ammar Jaffri, who highlighted the following issues during his presentation.

a. There are historical linkages between advancements of technology and its use by criminals.

b.  In Pakistan, we are always late in implementing the best practices. We often adopt reactive approach rather than a proactive approach to avoid accidents.

c. SIM verification in Pakistan had to undergo a lot of processes in the past.

d. Tight verification timelines, mismatch of thumb impressions due to different issues, CNICs issued before 2004, reduction in number of SIMs after re-verification and its impact on mobile operators are a few challenges that should be taken up in the current exercise.

e. Instead of insisting on re-verification after every few years, LEAs should concentrate on link (usage pattern) analysis to conclude their investigations.

f. There is a need to setup an ecosystem to bring all stakeholders on one page. There should be a balance between registration of SIM cards and comfort level of population especially in rural areas of Pakistan.

g. Enactment of laws regarding cybercrimes is the government’s job but cyber security should be entrusted to public-private partnership ventures as per International Best Practices.

Main Points of Mr. Aslam Hayat’s Presentation

M.r Muhammad Aslam Hayat, during his presentation covered the subject from the industry’s viewpoint. Main issues highlighted are as under:-

a. Telecom industry is one of the best performing sectors of the country, which has contributed extensively not only in terms of Foreign Direct Investment (FDI) but also in the form of taxes to the government. Cellular industry alone brought over US$ 13 billion since 2003 while taxes remitted to the government amount to PKR 1.2 trillion over the same period.

b. Telecom sector has provided over 20,000 direct and 160,000 indirect jobs in Pakistan. Moreover, the role of cellular mobile operators in Corporate Social Responsibility (CSR) is also prominent.

c. Mobile financial services, with over 160,000 branches across the country are helping millions of Pakistanis to fulfil their banking needs and facilitate the money to circulate in tax net.

d. Pakistan Telecom Industry is one of the highest taxed sectors in the world providing one of the lowest rates, and is technologically up to par.

e. Cellular operators cooperate and facilitate to the fullest extent in terms of National Security yet they are asked to do more.

f. Costs incurred by CMOs during previous verification initiatives are around PKR 22 billion while PKR 2.5 billion has been spent on BVS so far.

g. The Re-verification exercise is expected to slow down the industry’s growth this year. Apart from impacting rollout of 3G and 4G, this will also adversely affect the government revenues. Anticipated revenue loss to operators during 2015 is PKR 50 billion and incremental revenue loss in coming years may amount to PKR 10 billion per year.
 
h. The government is expected to bear a loss of around 18 billion in 2015 in terms of taxes while potential loss due to un-auctioned spectrum is much bigger. Consumers are also being impacted in terms of logistical barriers to find / reach to a BVS device for re-verification while women (as estimated 30-35%) may face difficulties due to less mobility.

i. There is no relation in a SIM and terrorism. Instead, SIMs facilitate to resolve 90-95% cases.

j. Instead of over burdening telecom operators, the government should eradicate incentives for illegal SIMs (e.g. grey traffic) and enhance capabilities of LEAs as per international standards.

5. Discussion

Subsequent to the presentation, fruitful discussion took place. Ms Ameena Sohail, Member (Legal) MoIT, said that the government is doing its best to create a conducive environment for all stakeholders. She emphasized that relevant legislation is currently in enactment process while cases are being pursued in the court of law wherever required. Dr. Ijaz S. Gilani was of the view that ideally a regulator should be an autonomous body to facilitate investors and consumers while watching the interests of the government. On the basis of presentations and discussion, following conclusions were drawn:

a. The pros and cons of SIMs verification issue need further discussion / deliberation.

b. There is no direct relationship between mandatory registration of SIMs and reduction in crimes. Rather, use of SIMs help as a tool to investigate and eradicate crime.

c. There is a need to create an ecosystem where all the stakeholders should sit together and discuss the impact of such endeavors before jumping to conclusion.

d. ICT can contribute a lot in terms of facilitating law enforcement agencies in their investigation, which may lessen the burden on cellular mobile operators.

The meeting ended with a note of thanks by the chair.