RICA a costly challenge

Johannesburg, 05 Aug 2009

Cellular operators' registration of contract and prepaid subscribers to comply with the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA) will prove to be a costly undertaking.

This is according to Frost & Sullivan senior ICT industry analyst Lindsey Mc Donald, who expects the cost to run into millions. She explains it is likely the cost of registering a SIM will cost each cellular company about R3 per SIM card, should agents be paid to do registrations.

In addition, other costs would include servers to host data, training of staff, additional administrative costs and agents, who are likely to be posted inside retailers and in informal areas where the operators do not have a substantial presence, she says.

Vodacom SA MD Shameel Joosub says complying with the Act, which requires all SIM cards to be registered, is a “huge task for Vodacom and its customers”.

RICA, which came into law on 1 July, was fully binding from 1 August, as July was a trial phase.

Joosub explains Vodacom will pay independent agents R3 for each card they register, which excludes new SIMs sold after 1 July this year. Vodacom will also register subscribers through its store sales systems and point-of-sale systems at retailers.

At the end of last month, Vodacom had 24.5 million prepaid customers and four million contract subscribers, all of whom need to go through the registration process. But Joosub says it's too early to say how many of these have been captured on the system since the Act came into full effect.

He says non-complying subscribers face being cut off from the network once the 18-month registration period expires at the end of January 2011.

Penetration concerns

Late last month, Vodacom CEO Pieter Uys said the company had already spent about R20 million on servers to accommodate the details it must store in order to comply with the Act. Uys said more would have to be spent to acquire space to keep records as these grow.

Uys expressed concerns that RICA would trim penetration of cellphones in SA, and that people who were unable to comply with the law would be cut off.

The Act requires that registration be done in person, and every SIM card, including those used for data, must be registered. Adults can register the cards of minor children in their care, explains Joosub.

Registration requires that people present their full names and surname, a green bar code identification document, or a temporary ID or a passport, to a registration official or in store when buying a SIM card. In addition, proof of residence must be provided through any document that includes their name and residential address, such as a bank statement, municipal rates, or retail account.

Joosub explains that customers who live in an informal settlement can provide a letter or an affidavit from a school, church or retail store where they receive their post, which must either be stamped or be on a letterhead.

Registration happening

Cell C spokesman Sean van der Westhuizen says it is difficult to quantify the cost of implementing the Act. “All industry players paid a significant amount to ensure a simple registration process for customers.”

The cellular company has put four different systems in place, ranging from an integrated point-of-sale solution to standalone registration devices. Van der Westhuizen says the systems are working and integration is going well.

However, not all the company's stores are on these systems, as they are still being rolled out, he adds.

“A significant number of prepaid and postpaid customers have visited our stores to register in the past few weeks.”

Cell C did not quantify the amount of subscribers who must be registered, but - at the end of December - it had 6.4 million active subscribers.

There were initial challenges in implementing the new systems, Van der Westhuizen noted, but did not explain what these were.

Big rush

MTN, Africa's largest cellular company, says its systems have been working “seamlessly” since 1 July.

However, the company would not disclose the costs of implementing RICA, nor how many subscribers need to be captured.

According to its annual report, the company had 17.17 million subscribers in SA at the end of December.

Bridget Bhengu, MTN's senior manager of public relations and communications, expects a huge rush of subscribers to register towards the cut-off date, but cannot indicate how many people have registered so far.