For 11 nights, a live network map showed 1.8 million mobile devices gathering around 14 remote sites in Saudi Arabia’s northern desert, then vanishing before dawn. The impossible-looking surges have revealed a software scandal at Riyadh-based Daqara Labs, an AI startup whose network simulations appeared in customer records as real traffic.
Amazara Cloud, a global technology group, had been negotiating to buy Daqara for 25.5 billion Saudi riyals (about €6.2 billion). Two people briefed on the talks said the proposed price depended partly on the startup’s claimed reach across mobile networks. The deal is now paused while customers and regulators check those figures.
The signals with no source
The mystery came to light in September when a network operator’s overnight monitoring team noticed identical surges at sites hundreds of kilometres apart. The dots moved in precise, repeating patterns, but radio logs showed no corresponding phones connecting. A visit to one site found a working communications mast and no evidence of the thousands of devices shown on screen.
The map was powered by Daqara’s software, which uses virtual phones to test how networks handle busy periods. Yusuf Wright-Mnisi, a network reliability consultant who reviewed the operator’s logs, said the simulated traffic had been marked as customer activity in a reporting feed. “It looked like a crowd of phones crossing an empty map, but the network had heard none of them,” he said.
It looked like a crowd of phones crossing an empty map, but the network had heard none of them.
Yusuf Wright-Mnisi, network reliability consultant
The operator then checked its previous reports and found that 1.8 million simulated device identities had appeared in monthly usage summaries since January. Its software counted those identities as active endpoints, according to a technical review shared with the Saudi Digital Networks Authority, the regulator overseeing telecom services. Three other operators have begun similar checks.
Daqara’s chief operating officer, María Paula Quiroz, said the company had found a configuration fault in a data export used by some customers. “Test traffic should never have been presented as live activity,” she said. She said the simulated devices did not belong to consumers, and denied that Daqara had billed customers for them or knowingly inflated its figures.
A deal on hold
The regulator has ordered Daqara to preserve its service records and provide a technical account by 26 October. One operator has suspended a renewal worth 740 million riyals (about €180 million) until it can reconcile its reports. The authority has not announced a fine or said whether it believes anyone acted deliberately.
The distinction matters to the proposed takeover: network software is often valued by the number of customers and devices it serves. Maimunah Sitompul, a telecoms analyst at Riyadh-based Signal Ridge, said buyers would now need to establish whether Daqara’s reported reach reflected real deployments. “A simulation can be useful engineering,” she said. “It cannot be sold as proof of a live customer base.”
Daqara says it has disabled the affected reporting path and is rebuilding its customer summaries. Amazara Cloud has not commented publicly; the people briefed on the talks said it had requested a fresh accounting before deciding whether to resume negotiations. The regulator’s review is due next month, but the phantom surges have already changed the question facing investors: how much of Daqara’s apparent scale existed outside its own software?
