A push by African
countries to require mobile phone users to register their numbers is
curbing the continent’s spectacular market growth of recent years and
jeopardising the goal of telephone access for all.
Analysts said that
mobile operators were set for a short-term hit in revenues, as many of
Africa’s poorer or more remote users struggle to produce the necessary
documents and so risk being cut off.
A number of African
governments are calling on companies to register all their pre-paid
mobile phone users, who make up 97-99 percent of the market on the
continent, in order to boost national security and help fight
phone-related crime.
“The introduction
of mandatory registration of SIM cards in at least 10 countries has
resulted in a dramatic slowdown in subscriber growth, and will see the
disconnection of millions of unregistered subscribers,” economic
forecast group, IHS Global Insight, said in a report.
South Africa has
led implementation of the policy, giving customers until the end of
this year to register numbers. Both MTN Group Ltd. and Vodacom Group
Ltd. last year reported falls in users by 6.4 and 4.9 percent,
respectively.
Drops are expected
elsewhere as another nine nations, which include Kenya, Cameroon, Ivory
Coast, and Ghana, and account for about 80 percent of subscribers in
Sub-Saharan Africa, follow suit. Deadlines range from later this month
to 2011.
“As the
registration deadline passes in each country, a significant one-off
drop-off is expected as those unregistered SIM cards are deactivated,”
IHS said in the March study.
Culling sim cards
The ease with which
Africans can get a mobile phone number — picking up SIM cards and
credit cheaply on the street with no need for documentation — has
helped swell official user numbers from just one million in 1996, to
around 350 million by the end of 2009, according to the United Nations.
But many on the
continent have more than one SIM card, mainly to avoid the costs of
calling one network from another. Analysts say many of these are likely
to culled.
“(Registration)
will have an impact initially. People with two cards may end up
choosing one,” said Christopher Hartland-Peel, an African equity
analyst at Exotix.
“But it will be a short-term issue — it’s going to be like stopping at a red light (and going on),” he added.
Informa Telecoms
and Media said a similar move by Algeria in 2008 had hit subscriber
numbers. No. 2 operator, Mobilis, had nearly two million SIM cards
de-activated and revenues fell to $140 million in Q4 2008 from $173
million in Q4 2007, it said.
A spokesman for
France Telecom, whose Orange unit operates in a number of nations
calling for SIM registration, said the policy was “complicated in the
timeframe” but teams were working to minimise the impact on revenues
and subscribers.
MTN has said the losses of its pre-paid users had not led to a meaningful drop in revenues in South Africa.
“SIM registration
is a cost and a hassle, but it is not going to affect the companies
over time,” said Andre Wilff, a telecoms analyst at Africa Analysis.
“It will dent
operators’ subscriber growth as it is being implemented, but they will
show growth again. Once it has come and gone, things will go back to
normal again,” he said.
Other issues such
as negotiations in many countries over higher interconnection rates,
increased competition, and fees to the government were more of a worry
to those firms, he said.
Extending deadlines
Similar schemes
have been implemented elsewhere in Japan, Australia, Thailand, and
Germany. U.S. lawmakers, last month, unveiled a bill to identify
pre-paid users as a way to stop terrorists, drug dealers, and gangs
from using anonymous numbers.
The high percentage
of pre-paid SIM card use in Africa means comparisons are difficult to
make, but Wilff said research into similar policy moves in Malaysia had
showed growth quickly returning after the initial disruption during the
process.
While African
governments say the move will boost security and curb phone-related
crime, some fear it will instead be used to monitor and crack down on
opposition figures.
But analysts warn
that producing documents, ranging from basic identity cards, to also
needing utility bills in some cases, could prove to be the biggest
headache for millions, on a continent where so many live in the
informal economy.
The lack of ability
or readiness of people to register their phones on time will curb their
ability to communicate and limit newfound user access to money transfer
and information services.
Tanzania has had to
extend its deadline, as just 10 million of the estimated 18 million had
registered on time. It is not yet clear how strict governments will be
in cutting users off.
“The problem is
that if the process is rushed through as a political imperative, it
could run against the goal of universal service,” IHS said.
