Mobile operators are appealing to the department of justice to extend the deadline of the Regulation of Interception and Communication Act (Rica), says Vodacom Group CEO Pieter Uys.

The act requires that all telecommunications providers and Internet providers register customer details, including their ID numbers and physical addresses. The process has to be completed by January next year, after which unregistered customers have to be cut off from the networks.

Mobile operators have been battling to get all their subscribers to register, and have spent a fortune on advertising and deploying registration equipment to all retail stores that sell Sim cards.

In spite of their efforts, all operators have seen a large drop in new prepaid subscriptions since the process started in July last year.

In April, MTN reported a 2,2% growth in subscribers, a marginal increase from the previous quarter when it lost 4,7% of its customers to the Rica process.

In its trading statement for the three months ended 30 June 2010, released on Thursday, Vodacom said that prepaid subscribers had dwindled again thanks to the cumbersome law. “Prepaid subscribers have declined by 11,9% year on year due to Rica,” it says.

According to Uys, the company has managed to register 15m of its 23,2m. That’s good going but it still leaves 8m at risk of being cut off the network.

“As an industry, we are appealing to the relevant departments to have the deadline extended, because it is hard to get the last few million subscribers registered,” Uys says.

Vodacom also cut off 3,2m inactive Sim cards from its networks during the quarter, thanks to a process implemented last year where it disconnects inactive Sims after seven months, instead of 13 months.

The culling of active Sim cards has increased average revenue per user.

Along with other mobile operators, Vodacom is trying to push more prepaid users to sign up for contracts. This is because it will help it prevent large-scale customer losses when the Rica deadline arrives.

Uys says this quarter has been good for prepaid conversions to contract, and the company has increased its contract base by 15%, to 4,7m.

According to Uys, contract customers now represent 20% of the company’s total customers.

Absa Investments analyst Chris Gilmour says Vodacom may have an advantage in converting prepaid customers to contract, thanks to its investments in data. He says with better data offerings in the contract space, compared to prepaid, customers may be encouraged to migrate.

“Though people have been contemplating MTN’s international investments, Vodacom has been working on its own backyard. It is way ahead of the pack in terms of data,” says Gilmour.

Vodacom reported on Thursday that it had increased local data revenues by 43%.

Gilmour says all operators have to look at ways to migrate customers to contract accounts, not only because of Rica, but also because of stagnating growth.

Meanwhile, Internet service providers will probably join forces with the mobile operators to try to have the Rica deadline extended. The Internet Service Providers’ Association has already started appealing to department of justice, saying it is impossible for providers to have customers registered by the deadline. — Candice Jones, TechCentral