DAMMAM, 2 June 2003 — Illegal telephone operations are causing losses of millions of riyals every month and the Saudi Telecom Company has not been able to curb these practices.
International telephone calls are a major source of revenue since the country has a presence of more that five million expatriates from all over the world who frequently call home. But revenue never reached the targeted level and illegal international calls continue to be a thorn in the side of the STC.
When the STC slashed tariffs for international calls to various countries, it was expected that the frequency of international calls would increase and many illegal operations would come to end. But this never happened and illegal phone operations instead became more sophisticated and foolproof.
Illegal phone operations have been in practice in the Kingdom before the privatization of the STC, when it was run by the Ministry of Posts, Telegraphs and Telephones (PTT).
The most popular illegal phone system among expatriates then was run from India. In this system a caller was able to call anywhere in the world for just SR30 for 15 minutes and SR60 for 30 minutes. This illegal operation had an elaborate network spread all over the Kingdom and several Indian cities. Indian operators called their agents in the Kingdom’s cities and then callers were patched through to their desired numbers.
After repeated stories in Arab News, the authorities cracked down on these operations and they were more or less wiped out. Many arrests were made and hundreds of illegal operators deported.
The international call cabins which have grown in number across the country heaved a collective sigh of relief thinking their business would flourish. More than SR800 million has been invested in international call cabins.
But the optimism of these cabins proved short-lived as the Internet arrived in the Kingdom and callers found it cheaper to make calls via Net services like Net2Phone. There was no illegality involved in such calls.
But the quality of sound and connectivity never made these systems popular. In the meantime, STC introduced prepaid card telephoning. This opened the floodgates for hundreds of prepaid card services, many of them illegal.
At present, in addition to STC-regulated prepaid cards, of which there are more than two dozen in the market, there are hundreds of other prepaid cards through which calls can be made to international numbers.
Some cards can be used for only one particular country. For instance there is a prepaid card called “Taj Mahal” for calls to India, with a charge of SR3.50 per minute against STC’s regular rate of SR5 per minute.
Other cards can only be used with cell phones. One card, which costs SR2 per minute to India allows callers to communicate as on a walkie-talkie, where only one party can speak at a time. Those in the business have hundreds of agents spread all over the Kingdom who visit businesses to sell cards to expat workers.
In addition to these cards, international calls through cell phones are also flourishing. These mobiles are registered, not in the Kingdom but in the UAE or elsewhere, where services are considerably cheaper.
Call cabin owners say that it is impossible to curb such illegal operations; the only way to counter them, they say, is to slash the current STC tariff to make it more competitive and bring it on a par with other countries.
