South African telcos plot anti-fraud plan as Rica reforms stall

Telecommunications industry body, the Association for Comms & Technology (ACT), has developed a set of industry principles and practices regarding Sim registration for its members – Vodacom, Telkom, Rain, MTN, Liquid Intelligent Technologies and Cell C – to adopt on a voluntary basis.

Speaking to TechCentral in an interview on Monday, ACT CEO Nomvuyiso Batyi said the move is aimed at finding more immediate ways of combating Sim fraud, a crime that makes it difficult for law enforcement to trace the perpetrators of other crimes – without having to wait for the amendments to the Rica legislation to be passed. Rica governs Sim card registration rules in South Africa and sets out when electronic communications can be snooped on.

“There are things that need to be done in terms of customer registration that are not legislated. The telecoms sector was also identified [by the Financial Action Task Force] as one of the things South Africa needs to look at regarding its grey-listing, from a customer registration point of view,” said Batyi.  “But the legislation has not been updated for a while. Every time it is updated and sent up the chain, it is turned back.”

Batyi said details around the provisions contained in the new document cannot be divulged until the Competition Commission has seen it and given the go-ahead for its release. To avoid falling foul of anticompetitive regulations, ACT and its members had to approach the commission prior to initiating discussions around how to curb fraudulent Sim registrations.

Once given the go-ahead, all discussions between the mobile operators had to take place in the presence of a competition lawyer and minutes taken. ACT’s lawyers are in the process of initiating discussions with the commission regarding the finalised document.

Among the solutions discussed was more extensive use of biometric authentication at Sim registration points. Pan-African operators such as Vodacom and MTN have experience with the legislated use of biometrics in markets such as Kenya and Nigeria. Regulators in those markets cite combating crimes such as kidnapping and financial fraud as drivers for legislating the use of the technology.

Biometrics

The law does not force the use of biometrics on the local industry; however, mobile operators who have seen the security benefits have already implemented them, especially when it comes to the post-paid market. This is because almost all post-paid Sims are sold directly via the operator’s own-branded stores, where security protocols are most likely to be enforced.

The prepaid market is more complex, with mobile operators partnering with formal retail chains like Pick n Pay as well as informal vendors such as spaza shops and individual resellers. Here, the operators have far less control over how diligent their downstream partners are at implementing Sim registration, including checking for valid South African ID numbers or proof-of-residence documents.

Read: Sim-swap fraud costing South Africa R5.3-billion a year

Alex Evan, group legal adviser for SecuriTech, a Sim packaging company, told TechCentral this week that more than half of the approximately 200 million Sim cards distributed in South Africa every year are sold via informal channels to prepaid users.

Evan explained that implementing biometric authentication adds a layer of inconvenience for informal retailers that can only be overcome through regulation.

“The commission structure incentivises the resellers to offload as many Sims as they can. They are disincentivised from any additional admin because they could lose business to their non-compliant competitor down the road,” said Evan.

Another factor affecting the voluntary implementation of biometric authentication across the mobile industry is cost. In June, the department of home affairs hiked the fee for real-time hits to the national population registry database from 15c to R10/query. An option for after-hours batch processing was made available for R1/query. Home affairs minister Leon Schreiber faced backlash from role players across industries, including telecoms (via ACT).

“If government is serious about fighting fraud and other related issues, it must speak with one voice. You cannot tell the industry to deal with fraud on one hand and then on the other hand have home affairs make it more difficult and expensive to deal with,” Batyi told TechCentral.

Evan suggested the industry also go back to using secure Sim packaging across all distribution channels to combat fraudulent registrations.

Some distributors and resellers can do bulk registrations, going on to sell pre-Rica’d Sim cards, because some of the packaging makes important information like the Sim’s International Mobile Subscriber Identity (IMSI) and Integrated Circuit Card Identifier (ICCID) easy to view.

Batyi neither denied nor confirmed if packaging standards form part of the provisions of the document ACT has put together for the industry.

She said that following the conclusion of the process with the Competition Commission, ACT will approach the justice department, which has the power to draft Rica-related regulations, communications regulator Icasa and the South African Police Service to discuss further interventions.

Read: Biometrics take centre stage in fight against Sim-swap fraud

“To curb fraudulent activity, all parties must work together instead of taking fragmented approaches. Law enforcement agencies, the office of interception, banks, home affairs and others – we are not talking to each other and something is so broken. We have to work together,” said Batyi. – © 2025 NewsCentral Media

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