Operators hit at MACRA over 'spy machine'

"For fraud management and revenue assurance, operators have already invested in solutions and will continue to do so in order to minimize fraud and maximize revenues. These functions cannot be the responsibility of the regulator," said the telecommunication heads.

"The term 'lawful interception' itself assumes that there is a specific law allowing interception of communication which, we believe, is not case in Malawi," argued the four.

"However, there is need to clarify how the functionality of frequency allocation will be carried out by MACRA in the absence of safeguards against arbitrary and unilateral interference with already allocation frequencies of private operators including broadcasting stations," it was argued.

The operators observe that all other components except lawful interception can be implemented without having real-time access to detailed Call Detail Records (CDR) as MACRA intends. The operators claim that although MACRA has vilified their initial stand, they did not object to the implementation of the CIRMS.

Telecommunication companies in Malawi are saying that all they are doing is informing the public and customers about the implications of the CIRMS.

Operators continue to work with MACRA

"The operators will continue to cooperate with MACRA in accordance with their operating licenses and applicable law," they said. They however have argued against implementation of the CIRMS on grounds of it being an unnecessary duplication of effort, encroachment on operators' responsibilities and a violation of customers' responsibilities and a violation of customers' privacy.

Operators claim that on the other hand, MACRA believes that the Communications Act adequately provides for such legal basis.

"In the event, MACRA's decision to proceed with implementation of CIRMS effectively concludes consultations on the matter between the two parties," the four companies claimed. Operators reiterated that the CDRs from the operators' switches and billing systems contain detailed call information relating to the caller and his/her contacts.

They said through the CIRMS, even in the absence of listening to call conversation, there will no longer be confidentiality with respect to customers' call details; customers social, economical or political links and call history; journalists' sources of information and contact details; and interactions between and among business men, politicians, civil society, other interest groups and their associates etc., as these can easily be established by analyzing the raw CDRs.

The CDRs which operators currently submit to MACRA for its monitoring functions under the Communications Act are summarized CDRs which do not contain such detailed subscriber information and not raw CDRs or CDR format as requested by MACRA for CDRs or CDR format as requested by MACRA for CIRMS' implementation.

The telecommunication companies also argue that Malawians are already aware that their efforts to improve quality of service continue to be disrupted by vandalism, power failures, acute fuel shortages to power generators and shortage of foreign exchange to import equipment needed for expansion and optimization of their networks.

The operators then trash the installation CIRMS which they claim will never solve any quality of service problems being experienced currently for it is merely an adjunct monitoring tool and nothing new will be discovered other than what is currently already been declared and verified by MACRA.

"Improvements in quality of service will occur only through investment efforts by the operators and a stable macroeconomic environment," they argued.

The operators advised MACRA that implementation of the CIRMS could have the effect of reducing overall usage of airtime, resulting in reduced revenue for the operators and tax authorities, but MACRA has held views to the contrary.

MTL, Airtel, ACL and TNM noted in the statement that MACRA had been selective of the manner it has disclosed information relating to the CIRMS and its capabilities.

"Although the operators are not party to the agreement between MACRA and Agilis International they are interested parties in the implementation of the same and it is with the operators and the general public," said the four companies.

Adding: "Whenever customers feel that their airtime has been depleted unfairly or they face any quality problems they are free to call any customer care centre where such allegation is checked and if confirmed necessary remedies including reversals are done."

Not a surveillance machine, says Nsaliwa

At the meeting MACRA called to explain to the media about the CIRMS, according to them, Charles Nsaliwa said that CIRMS has no capacity to tap somebody's phone as it is not a surveillance machine which can be used to listen to calls being made or received by phone subscribers.

Nsaliwa explained that MACRA would like to protect the interests of consumers, purchasers and other users of communication services in respect of the prices charged for the quality and variety of services provided and terminal equipment supplied. In so doing MACRA says both subscribers and government revenue collection will benefit from the installation of a CIRMS.

Nsaliwa insists that the system will ensure quality services from operators and will only monitor CDR which operators already submit to MACRA on request and not necessarily voice channels which will not be connected to the device.

In total contradiction to what the operators say, Nsaliwa explains that CDR does not have the actual contents of the SMS sent or voice content, rather billing data of a particular call.

Nsaliwa then tried to explain CIRMS component of 'lawful intercept', which pointed out is an exception to the general monitoring mandates and can only happen at the request of the operator or consumer who has a genuine grievance within the scope of the CIRMS.

Intercept will only generate CDR

The national regulator said the truth is that even in such situations the intercept will only generate CDR data and not voice or SMS content.

"The lawful intercept becomes useful when handsets are stolen or others are buying a SIM card and abuses it before throwing it away," he said.

Allegations against operators

There have been several allegations made against operators in justifying the implementation of CIRMS and the four companies have also attempted to address each allegation. The operators say they reserve comment on MACRA's allegations of wilful defrauding of the tax.

"All financial dealings are verifiable by established public and private institutions. MACRA and such institutions are always at liberty to verify, and do in fact verify, such financial transactions," add the four managers.

Operators also challenged that to date, no allegations of financial malpractice has been raised by such institutions against any of the operators and therefore MACRA claims that they are refusing because they want to be defrauding government has no sense. They say although they do not deny existence of fraud in the industry - as is the case in all other industries - and as such anti-fraud and revenue assurance will continue to be a major pre-occupation of the operators for their own self-interest.

Fraud occurs when systems fail

The operators further explained that the nature of fraud in the industry occurs when operators' systems fail to capture all calls in terms of their origination and termination.

"In that event, the operation fails to a bill the caller accordingly. Thus, unbilled calls represent lost revenue to both the operators and tax authorities," said the operators.

The telecommunication players said it is not the role of MACRA to capture fraudulent calls and bring them into operators billing system and that as such, MACRA will not be able to collect levies on calls not billed by the operators, and that attempts to do so otherwise will constitute an undue interference and financial penalty on operators. The operators also shot down MACRA's claims that CIRMS will automatically lead to increased revenue for the government and MACRA.

They said this is impossible because there is no value adding since CIRMS shall merely monitor what is already happening.

The companies disclosed that the only way MACRA proposes to bring in more money is through the increase of international incoming terminal rate so that a new tax of about US$ 0.05/minute (which is between 40-70% of the current rate can be imposed. They warn the people need to know that this new tax will be passed on to customers.

Operators have also taken advantage of the ongoing argument with MACRA to argue against excessive financial obligations imposed by regulator through license fees, frequency fees and levies which generates about MK2.0 billion a year for the running of an organisation of 72 employees.

The operators also said it is not true that they have taken MACRA to court or have obtained an injunction against CIRMS as reported in the media. Rather, they said the cases currently in court are citizens Hophmally Makande and Eric Sabwera, against the state and Malawi Communications Regulatory Authority (MACRA) and another one where a citizen Alick Kimu is contending that Access Malawi Ltd, Airtel Malawi Ltd, Malawi Telecommunications Ltd and Telekom Networks Malawi Ltd should not hand over CDRs to MACRA.