The push for mobile-phone growth in regional markets in Africa is being thwarted by the introduction of SIM card registration laws aimed at reducing handset theft and tracking down criminals, industry insiders say.
Other countries are considering SIM card registration laws, but South Africa has become the first country in Southern, Eastern and West Africa to suffer the consequences of such a regulation. The law that was introduced only four months ago, and requires customers to produce identification documents and personal details when joining a network.
South Africa's regional mobile operators' Mobile Telecommunication Network (MTN) and Vodacom have both recorded a slowdown in customer growth, and blame it on the SIM card registration law. MTN operates in more than 15 countries in Africa while Vodacom has a presence in five African countries including Tanzania, Mozambique, the Democratic Republic of Congo (DRC) and Lesotho.
"The new law will kill off the company's previous ability to add 1 million subscribers in a month," Vodacom CEO Pieter Uys said. Both MTN and Vodacom planned aggressive expansion drive into regional markets in order to extend their geographical footprint.
But prospective customers are shying away from the registration exercise. Existing customers have up to 18 months to register their SIM cards with their service providers, after which they will be deactivated. Generally, people are not willing to give out their personal details for the sake of buying a SIM card.
Tanzania, Nigeria, Botswana and Sierra Leone are among African countries that have introduced SIM card registration laws. Nigeria and South Africa are Africa's largest mobile market in terms of investment and subscriber growth. Last week, MTN issued a statement warning that the company is in the process of cutting 403 workers out of a total of 4, 679 employees in South Africa as a result of a decline in the economic environment.
The Regulation of Interception of Communications and Provision of Communication Related Information Act (RICA) came into force in July this year in South Africa. As in many countries in Africa where SIM card registration laws have been enacted, anyone who buys a SIM card in South Africa without registering risks being arrested and prosecuted by police. The theory is that if a call is linked to a crime, the police can find out who bought the SIM card that was used.
The African region is experiencing phenomenal growth in the use of mobile phones compared to other regions of the world, so many phones are being stolen every day and criminals are also using the phones to commit crimes. In Nigeria and Somalia, for example, criminals are using mobile phones in ship hijackings, the abduction of foreign oil workers and as a way to demand ransom.
However, the SIM card registration exercise is not without controversy. Mobile service providers and subscribers claim that registration is working against the principle of universal access and adds to the cost of SIM cards as vendors will have to invest more in data-capturing technology. Others argue that SIM card registrations will give the authorities the ability to monitor their citizens wherever they may be, examining conversations, text messages and Internet activity.
"Registration makes it easy for security agents to target people, particularly media sources in order to satisfy personal and political interests," said Thapelo Ndlovu, the director of the Media Institute of South Africa (MISA).
Many operators in African claim that attempts by authorities to register in-bound roamers will have a negative impact on foreign currency inflow, owing to muted use of mobile roaming services as tourists shy away from registration.
Registration of SIM Cards will also make it difficult for pan-Africa mobile service provider Zain to roll out and implement the borderless One Network service because some countries in which Zain has a presence have no SIM card registration laws while others do, according to Amos Makanya, assistant communication officer at the Southern Africa Communication Agency.
The One Network service already is operational in more than
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