Second mobile operator MTN has to date spent in excess of R140 million to get its subscribers compliant with the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA) and anticipates spending even more before the extended June deadline.
Concerns have been raised as to how the mobile operators will go about recouping the costs and what it will ultimately cost the consumer.
While rival operators Vodacom and Cell C have remained mum regarding the financial knock of the registration law, it has been projected that the likely cost of registering a SIM will amount to about R3 per SIM card, should agents be paid to do registrations.
This means that the approximate cost for the registration of Vodacom's 25.5 million subscribers is in the region of R75.5 million, while Cell C's approximate seven million customers would cost it about R21 million.
However, this does not factor other costs, including 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.
In addition, all three subscribers have undertaken extensive advertising and educational campaigns which have racked up the millions.
Furthermore, the operators stand to lose even more when unregistered subscribers get cut off from their respective networks post the June deadline.
Despite initial resistance from the operators, the legislation and costly registration was imposed on them by government.
Who will pay?
Gilmour explains that at R3 per a subscriber, the cost is far too pervasive for operators to recoup without alerting subscribers to it.
However, he maintains that operators may explore innovative ways to recoup the costs less aggressively. Gilmour suggests that operators may bump up administration fees for package upgrades or increase service fees for services such as itemised billing.
But Gilmour warns that there are a number of challenges to consider, no matter how operators go about recouping the costs.
He points out that the prepaid market has too high a churn rate for operators to risk bumping up the cost of elementary services.
Gilmour adds that the entry of Telkom's 8ta has also boosted competition in the market, most especially from a price perspective, and as such, it would be risky for MTN and Vodacom to consider an aggressive course of action.
While Gilmour is confident that consumers will not necessarily foot the bill for the cost of RICA, the entire legislative process and aim of the law has been questioned as loopholes may leave subscribers vulnerable.
At risk
RICA-registered South Africans have reported falling prey to unscrupulous marketers, as the entire SIM registration process is potentially open to abuse.
However, mobile operators downplay this and are adamant their databases are secure, while also admitting the SIM registration Act does not clarify how personal details should be secured.
This means that, for any action to be taken if information is leaked, affected mobile subscribers would have to prove the origin of a breach - a near impossible task. This leaves mobile subscribers open to abuse, with little recourse.
The Wireless Application Service Providers' Association of SA highlights the fact that RICA is intended to help authorities track down subscribers with SIM cards linked to criminal activity.
“RICA, however, provides little or no protection from scammers, who may work around the constraints of RICA, or even use international numbers to launch their schemes,” says chairman Leon Perlman.
The organisation notes that many users of mobile content and services incorrectly believe the new Act safeguards them in some way against mobile spam and mobile 419-type scams.
The information gathered through RICA should only be used for law-enforcement reasons. Yet this is not the case, as the mounting pile of evidence shows people's details are somehow escaping the database, or collection process.
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