It appears SIM dumping is costing the channel millions of pounds every year. Could this new term soon become one of the new buzzwords of the industry?
It’s a term we hadn’t heard of, until last week. But in some circles among mobile virtual network operators (MVNOs) the term appears to be becoming more widespread.
We have learned SIM dumping involves agents employed by MVNOs to buy quantities of SIM-cards from rival MVNOs.
Surely that’s ludicrous? No.
The mobile industry, as we know, has its own laws of economics, which make no sense in the ‘normal’ business world.
So why does buying your rivals’ SIM cards by the thousands make sense?
We hear anecdotal stories of some MVNO’s purchasing thousands of rivals cards and then destroying them in an eager effort to prevent their target rival from selling the SIMs to consumers
who will connect them.
As we know, a SIM-card is worthless unless it comes with a connection.
Our enquiries now lead us to believe that SIM dumping is costing the channel millions of pounds each year.
In some cases, we have been told more than half of MVNOs SIM stocks have been disabled by phantom sales.
We have been told students have been employed at the rate of £2 for every SIM they buy. The practice has drawn parallels to box breaking, according to a senior executive at an established MVNA.
One MVNO chief executive reckoned he had been targeted through its distributor within weeks of starting up. But the distributor refused to fulfil the large order.
Some MVNOs have now been forced to introduce new controls over the distribution of their SIM-cards, such as limiting to five the number of SIMs sold through new retailers, and not increasing deliveries until proof of activation and use.
It is disappointing that we must now add another scam to the systematic abuse of the mobile channel.
We expect that the phrase ‘SIM dumping’ will soon become another ubiquitous buzzword and practice. Mobile News will find out more and delve into the heart of the practice.