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Telcos urge even stricter rules for prepaid SIM purchases

Magyar Telekom has confirmed to the Budapest Business Journal that negotiations have started between telco providers and Hungarian authorities in order to make the regulations covering the purchase of prepaid SIM cards even stricter and prevent potential criminal abuses.

All three of the major tele-communications service providers in Hungary – Magyar Telekom, Telenor and Vodafone – were caught up in an international SIM card scandal in early October after unnamed national security service sources said that a huge number of SIM cards could have been purchased in Hungary for underground activities. Some reports even suggested that SIM cards purchased in Hungary may have been used by terrorist cells involved in the recent Paris and Brussels attacks. 

Initial reports suggested that 128,000 SIM cards may have been purchased from Magyar Telekom, the rest having been bought from Vodafone and Telenor; in total some 180,000 SIM cards could have been purchased using the name of a dead homeless person.

As the news gathered international media attention, the Hungarian government was said to be pondering stricter regulations for purchasing SIM cards. Interior ministry sources were reported to have said that negotiations had already started between the government, the National Media and Infocommunications Authority, and representatives of telcos in Hungary.

Strict regulations to be further tightened

Magyar Telekom (MTel) confirmed to the BBJ that the Hungarian government is, indeed, in talks with local providers. “Authorities and providers are in ongoing reconciliation about the modification of the rules of prepaid SIM card sales, in which process Magyar Telekom takes an active role with the aim of establishing a set of conditions encompassing all relevant aspects that is acceptable for all parties involved,” the telco’s Communications Directorate said via email.

But it also pointed out that this is far from being a uniquely Hungarian problem; in fact, Magyar Telekom says the system in some EU states is noticeably more lax. “The regulation of prepaid SIM card sales is an issue not specific to Hungary, but relevant across the EU, as in many European countries (including some neighboring ones, like Austria, Croatia and Romania), SIM cards can be purchased under less strict conditions than those applicable in Hungary. In those countries, customers purchasing prepaid SIM cards are not identified at all, thus no records are kept.”

Telenor Hungary broadly agrees with MTel corporate communications expert Nelli Kadlok told the BBJ the company “welcomes reported proposals to introduce stricter regulation in prepaid card registration, and is working actively with the authorities and the industry to ensure the proper identification of existing prepaid customers and to introduce restrictions for future activations.”

She also referred to the stricter restrictions already in place in Hungary, but acknowledged there were shortcomings too. “The current regulation and identification process for buying a prepaid SIM card in department stores as an off-the-shelf product is one of the strictest of its kind within the European Union; however, the lack of limits for SIM cards registered under one person’s name created an opportunity for potential abuse,” Kadlok said. Telenor had been “self-regulating” in limiting the number of prepaid SIM cards that could be bought online to five per person, she said, but added that more must also be done internationally. “The introduction of such a limit and a stricter identification process would be desirable in all European countries in order to prevent the abuse of mobile services,” Kadlok said.

For now, while negotiations continue on what the stricter regime may look like, and how it will be enforced, there is little else the telcos can say. “Magyar Telekom shall be in a position to provide more detailed information on the specifics and effects of the new rules of purchasing prepaid SIM cards when the relevant statutes become public,” the Communications Directorate stressed.

The third big service provider, Vodafone Hungary, would only tell the BBJ that its internal controls help deal with potential abuses. “Please be informed that Vodafone does not wish to comment on the matter; however, we have an effective monitoring system in place to filter out similar cases,” Gabriella Berta, PR manager at Vodafone Hungary, said.