You will find random ringing phones around arkham. Get to the first phone, then its a race to a second phone. I must emphasize random. Sometimes you'll get 3 calls in 15 minutes, and sometimes it'll be 3 hours between calls. Random is random.
When you get to the 2nd, you must trace the call to zzazz. You do this by following the marker around with the left thumb stick and keep it over the marker. You won't finish this on the first try. It will take about 4-6 times before you trace the call.
Once you trace him, go to his hideout, open the vent inside with your batclaw, go into the lair, circle around it and take zzazz down.
I do reccommend waiting till you get the batline before finishing this side quest, it was the only was I got through the last section of his small lair. You get the item after beating penguin and chasing down a ninja.