Legislation meant to help the police crack down on organised crime is having a detrimental impact on mobile operators.
The Regulation of Interception of Communications and Provision of Communication-Related Information Act (Rica) requires service providers to register details about their customers, including ID and proof of residence. This has led to a sharp slowdown in growth in new subscribers.
Vodacom Group CEO Pieter Uys says there is been a dramatic slowdown in subscriber growth. “Rica has definitely had an impact on the system. I can’t give you the detailed numbers because we are in a closed period, but when we release our numbers next month, you’ll see that Rica has had a big impact.”
Uys says mobile operators need to meet urgently with policy makers and regulators to “figure out how to achieve what they want without harming the industry”.
He says that if the requirements of Rica were softened, strong subscriber growth would resume.
The biggest problem has been that many prepaid customers can’t easily provide a proof of residence, a requirement of the act.
MTN SA has also felt a marked slowdown in subscriber growth and has put in measures to try to counter the problem, says regulatory affairs head Graham de Vries. “Rica has not been kind to us.”
De Vries says a backlog in the issuing of new ID books by the department of home affairs and difficulty in consumers obtaining proof of residence is to blame for the slowdown.
Sue Kennedy, Cell C’s executive head for sales and distribution, says Rica has had a “major impact on both customers and network operators”.
“Despite best efforts to implement measures to simplify and ease the registration process, Rica has been a major deterrent. Cell C has experienced a significant impact on sales, especially in the informal market,” Kennedy says. “Since the implementation of the act, Cell C’s gross activations have dropped by almost 80%.” — Duncan McLeod, TechCentral
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