Tyrone Reid, Senior Staff Reporter
At least one major telecoms company in Jamaica is calling for stiffer penalties for persons involved in bypass operations that result in loss of revenue for the State on incoming overseas calls.
Elon Parkinson, corporate communications manager at LIME, said bypass operations must be viewed as fraud against Jamaica because they rob the State of much-needed revenue.
"It is important that bypass be treated as fraud on the country and that the legislation governing criminal liability for bypass be bolstered to create increased sanctions against the practice," Parkinson wrote in response to Sunday Gleaner queries.
Under Jamaican law, a bypass operation is any manoeuvre that circumvents the international network of a licensed international voice carrier in the provision of international voice services. According to the experts, this happens when voice traffic in a legitimate system is routed through an international switch in the calling country to an international switch in the destination country.
Industry insiders have revealed that local customers have received international telephone calls at specific dates and times and a trace of the activity on the legitimate operator's network shows the calls originated from local numbers belonging to a particular person, persons or firm.
A response from the Office of Utilities Regulation (OUR), provided by Yvonne Grinam Nicholson, director of consumer and public affairs, quoted Section 9 (1) of the Telecommunications Act, which states that "a person shall not - (a) own or operate a facility in Jamaica unless that person is the holder of a carrier licence granted under Section 13; (b) provide specified services to the public by means of that facility unless the person is also the holder of a service provider licence granted under section 13; (c) sell, trade in or import any prescribed equipment unless that person is the holder of a dealer licence granted under section 13 or (d) engage in bypass operations".
Meanwhile, Parkinson also noted that bypass poses a threat to the good order of the operation of the telecoms sector as it creates an uneven playing field for legitimate operators.
However, he said LIME was unable to provide specifics on how the illegal operations have affected the company's revenue stream.
"We are not in a position to disclose numbers. However, this activity has a significant negative impact, not only on the telecommunications sector, but also on overall revenues into the country for Universal Service Levy and taxes. The illicit practice generally reduces foreign-exchange inflows because bypass operators usually undercut the settlement rates agreed by legitimate operators," he said.
The Sunday Gleaner understands that there are currently five licensed telecommunications carriers with legitimate international switches - Flow, Digicel, LIME and two other companies. However, at one point after the full liberalisation of the telecoms market in Jamaica 10 years ago, there were 17 licensed operators with an international switch.
Experts in the field have proffered that the real problem is not the bypass operations, but the illegal operations which result in the evasion of taxes. One well-placed source described the battle between licensed carriers and illegitimate operators as "guerilla warfare" as the former seeks to ward off the latter from illegally encroaching on its market share.
Asked about the measures LIME has implemented to combat this growing problem, Parkinson said fraud management was an integral and important part of the company's operations and that LIME was making "every effort to combat this criminal activity".
"As the law recognises by its inclusion, bypass is a ubiquitous issue across the telecoms industry. The black market for international calls appears to have increased since liberalisation of the telecommunications industry in Jamaica," he added.
Parkinson also revealed that information on suspected illegitimate operators and their activities is shared with the relevant authorities.
At the same time, opting to not answer specific questions posed on how bypass is affecting its operations in Jamaica, Barry O'Brien, CEO of Digicel Jamaica, provided a brief response.
"Digicel is aware of bypass activity which affects all telecommunications voice providers. We are working with the respective government agencies to stem this unlawful practice," said O'Brien.
However, the utilities regulator pointed out that it was difficult, from traffic trends, to detect bypass operations as alternate calling over the Internet is increasing, and as call prices are reduced in Jamaica more and more traffic will flow out rather than in.
The OUR also revealed that in a bid to combat bypass operations it has, in the past, organised meetings with operators to discuss the problem and possible solutions.