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Museveni buying Shs70bn gadget to monitor telecoms

With State House sponsorship, Josephine had secured a Phd in Information Science from Loughborough University in the UK. She holds a degree in Electronics and Electrical Engineering, a Masters in Information Technology and some of her papers have published in reputable scientific journals. She previously worked with carmaker Rolls Royce.

Details of her terms remain scanty but The Independent can report that she is also being considered as the feature boss of Uganda’s National Oil Company. She was shortlisted among the top four for the job.
With Josephine on board, the procurement of the technology, seems to be just a stroke of a pen away. By press time she was outside the country,but The Independent has learnt those involved had zeroed on about four companies and are close to picking a winner.

The Independent could not establish the extent of involvement of the Public Procurement and Disposal of Public Assets Authority (PPDA) in vetting this deal. State House often bypasses PPDA legal mandate when engaging in so-called “classified expenditure”.

Should the procurement succeed this time, insiders say, the technology might bring the country closer to
dealing with a telecom fraud known as voice traffic termination fraud or SIM – box fraud, which costs telecom companies revenue and the government taxes.

International studies have indicated that network operators lose about 3% of the annual revenue due to fraudulent and illegal services. The biggest operator, MTN, last year suffered a huge decline in profits but still managed to rake in Shs177 billion profit.

A 3% loss of that to SIMbox operators amounts to about Shs5.5billion. The Communications Fraud Control Association (CFCA), states that telecoms lose over 15 per cent of their interconnection termination revenue through SIM boxing.

Some researchers put the total global losses from the underground mobile network industry to be $58 billion in 2011.

Kayihura and Mutabazi


How it works
If you have ever received a call from a person who says they are abroad yet the number they are using to call you is local, then you have interacted with a SIMbox operation.

At the centre of the operation is a SIMbox or SIM bank, which holds several Simcards and is part of a Voice of Internet Protocol (VoIP). When used fraudulently, it enables costly international calls to be
routed as cheaper local calls.

The technology terminates international calls through local phone numbers such as MTN, Warid, UTL, or whatever and make the calls appear as local. Apparently, fraudulent SIMboxes hijack international voice calls and transfer them over the Internet to a cellular device, which injects them back into the cellular network.

As a result, the calls become local at the destination local network and the cellular operators of the intermediate and destination networks do not receive payments for the call routing and termination.

Experts say that a fraudster can operate thousands of SIM cards from different SIM boxes through one
server. The calls, they explain, are sent through the Internet to a SIM box— that houses ten to 30 illegal SIM cards— which redirects the illegal Voiceover Internet Protocol (VoIP) traffic to mobile networks.

The major players in this under – ground telecom business are mainly two—those based in the terminating country and the illegal international carriers from across the border.

Besides causing the financial loss, an international study shows that SIM – boxes degrade the local service where they operate. Often, cells are overloaded, and voice calls routed over a SIMbox have poor quality, which results in customer dissatisfaction, the study adds.

In Uganda, The Independent has learnt that the kingpins of the fraudulent trade also happen to be major players in the telecom sector, senior officials in cabinet and some Chinese dealers. The Independent, for now, cannot name these individuals for legal reasons.

One might wonder why an individual with a stake in a telecom company would want to operate a SIMbox which effectively harms the big company. The answer is simple; SIMbox operators make a lot of money.

The SIMboxes , apart from the initial capital injection, there are literally no expenses, no taxes at all since it is an underground business. An owner of a SIMbox can earn up to $10,000 dollars a day (Approx.Shs33 million) from just one simbox, those with knowledge on the dark industry say. That is about US$ 3.6 million a year per SIMbox. Operators usually run several and rake in several million dollars. But as simbox operators make these millions, registered operators and government are the major losers.

Simboxing hurts telecoms business of international call termination, which is big business with agreements between telecom companies in millions of dollars.

For instance, for a person using a Vodafone line to call an MTN subscriber in Uganda, Vodafone pays part of what it charges the caller to MTN. What simbox operators do is hijack the call before it lands on the MTN servers, bypass MTN servers, and route the call through a local line.

Therefore, MTN charges the owner of the line the local rate but the owner of the SIMbox skims off a higher rate for helping convert an international call into a local one. Simbox operators receive their cash on offshore accounts to avoid being traced.


  1. But how can all people be so stupid? that this stupid man turns the country into own property? I cannot bring myself to understand this..

  2. Because you Oto, our only and last hope are stupid!!!

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