Spawned by the loss of millions of dollars in uncollected taxes on incoming international phone calls being facilitated by unlicensed carriers, the Government is looking to pump more than US$5 million (approximately J$500 million) into a sophisticated system designed to disrupt the burgeoning black market for foreign calls into the country.
Meanwhile, the long-standing problem, which has mushroomed in recent times, forced Technology Minister Phillip Paulwell to call a high-level meeting with the CEOs of the country's major telecoms operators - Flow, Digicel and LIME - along with heads of the Office of Utilities Regulation (OUR) and the Universal Service Fund (USF) last week to discuss the impact and possible mitigation measures.
Olivia Leigh Campbell, special adviser to the science, technology, energy and mining minister, told The Sunday Gleaner that Paulwell has also written to the USF, mandating that entity to put in place an audit system with appropriate technology to assess the extent of the problem.
Ahead of last Thursday's high-level meeting, Hugh Cross, chief executive officer of USF, confirmed the multibillion dollar fund was seeking to make the major spend to stop the hemorrhaging of millions of dollars in uncollected taxes.
"We are looking at implementing a system that would verify the total volume of inbound calls. It is going to be an extensive venture costing in excess of US$5 million," Cross told The Sunday Gleaner.
The head of the USF said while it was hard to determine how much money the Government was losing from these illegitimate bypass operations that often show up on the network of legitimate carriers as a local call, estimates suggest that these undetected foreign calls represent approximately 15 or 20 per cent of the total volume of calls coming into Jamaica. And, he is also confident that the country is losing, cumulatively, more than the US$5 million it might cost to remedy the malady.
The Telecommunications Act describes bypass operations as maneuvers that circumvent the international network of a licensed international voice carrier in the provisions 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.
No trace of these calls is picked up in the international switch records of licensed carriers, thereby supporting the conclusion that the calls circumvented the international switching network of legitimate operators. It is believed that the illegitimate operators of these bypass systems can earn up to US$100,000 per week depending on the size of their operation.
"Needless to say, there is revenue loss for the Government because the State is not collecting the special tax of US$0.075 per minute, the USO fee of US$0.02 (for mobile) and US$0.03 (for fixed) as well as the GCT of 25 per cent," noted one expert who asked not to be named.
The technology ministry said it was aware that 'bypass' was taking place in the local telecommunications sector and that it presented a major problem to established telecoms operators and to the Government.
"Bypass is illegal because the operators of bypass systems are not licensed to operate telecoms services, and as such do not pay the requisite fees and taxes normally levied on such operations," read another section of the ministry's response issued by Campbell.
"This matter directly affects the revenues of the Government by reducing tax revenues as well as reducing inflows to the Universal Service Fund," the ministry added.
The ministry also pointed out that bypass was not a new problem.
"Recently, however, it has become more of a problem with the expansion in access to high-speed Internet and the development of new technologies that make this practice easier and more widespread," the ministry noted.
Detective Inspector Warren Williams, head of the communications, forensics and the cybercrimes unit in the police's Organised Crime Investigation Division (OCID), confirmed that the Jamaica Constabulary Force (JCF) has dismantled two operations suspected of committing what the police call bypass fraud.
"The raids were conducted in September last year and persons were found conducting that sort of operation. Basically, equipment were seized that can facilitate calls," said Williams.
Among the pieces of equipment seized by the police include various kinds of modems, SIM banks and multiple SIM cards. A well-placed source told The Sunday Gleaner that some of these SIM banks can hold up to 100 SIM cards simultaneously.
"The persons who were held were subsequently charged for the offences, but the investigations continue," the detective inspector added.
"Once it is brought to our attention we will put the necessary resources in place to deal with it, apprehend and shut down the operations."