Fiji Times
Elenoa Baselala

Thursday, February 03, 2011

CERTAIN telecom operators are under scrutiny for denying the State coffers of international call revenue.

At least one is suspected of having a foreign subsidiary, where the profits from international calls are being siphoned to.

Commerce Commission chairman Doctor Mahendra Reddy said some operators lied about the number of minutes of calls they put through and connected them at cheaper than 30 cents (the commission determined price) to gain more international traffic. Not all telecom operators in the country connect (terminate) international calls.

Fiji's international gateway keeper, FINTEL confirmed the Commission's findings and said it would assist the latter when required. "FINTEL from its recent meeetings with international bilateral partners has discovered a serious issue in regard to a breach of regulations with respect to incoming international traffic landing into Fiji below the regulated rate of 30 cents Fijian," FINTEL manager Commercial and Business Development, George Samisoni said.

"It appears that the traffic is flowing to one or more operators in Fiji who apparently are quoting a lower rate in US currency equating to less than 30 cents Fijian per minute.

"The volumes are large and as a consequence FINTEL and other domestic carriers who have invested heavily on infrastructure, are being robbed of significant funds because they have abided by the (commission) determination.

"We suspect that at least one of these companies operates out of Fiji with a foreign subsidiary, which accumulates most of the profit. This process is akin to a recent similar episode with foreign exchange, transfer pricing and taxation implications for Fiji.

The international call traffic to Fiji is estimated at about eight to 10 million minutes a month. At three cents a minute as levy, the Government should earn $240,000 a month or $28.8m a year if at least eight million minutes are connected.

Following the "serious breach", Dr Reddy has placed a number of rules for the operators.

They must submit details of the companies they connect calls for, the minutes connected and submit this in a monthly meeting with the commission. They should also have bank accounts for the international call revenue and the bank statements to be available to the commission.

The commission also wants all international calls to have caller IDs to prevent SIM boxing (use of technology to portray international calls as local calls).

Meanwhile, both Digicel and Telecom Fiji Limited said they were not in breach of the commission's determination.

Vodafone Fiji said it complied with the law and it welcomed the commission's decision to identify telecom operators who may have exploited the Government's objective of greater foreign earning from international calls to their own advantages.

"Vodafone Fiji does not bring call traffic directly from overseas network to terminate on its network," the company statement said.