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LESS PAPERWORK: Attorney Mike Silber says RICA eliminates the need for written consent to monitor phone calls.
The new amendment forces service providers to switch off customers who are not registered and won`t permit new customers on the network without registration.
Cellphone service providers have 12 months from implementation date to gather the full details, including ID numbers and residential addresses, of the roughly 26 million cellphone users in SA.
Currently, the penalty for non-compliance will be the service provider`s problem, with fines of up to R2 million and possible imprisonment of up to ten years.
“The proposed amendment adds additional penalties of fines of up to R100 000 a day,” says Silber.
“The proposed amendment contemplates also making customers guilty of an offence, with fines or imprisonment of up to 12 months.”
Criminal talk
Besides the risk of having their service cut off if they don`t comply with future amendments, consumers already face the risk of being charged if they don`t report lost or stolen cellphones. In addition, there`s the possibility that their cellphone communications may be monitored without their knowledge or consent.
Silber notes: “There is no need to inform if interception happens on receipt of a directive from a law enforcement agency or as otherwise contemplated in RICA. Where service providers do need to take reasonable steps to inform is if they monitor for customer care. They are allowed to monitor for quality assurance purposes without asking for consent.”
Silber and Michalson say RICA does away with the requirement of written consent. “Now there are very few situations where written consent is needed and then it is mainly in the business/employee space and certainly not in the service provider space, such as the mobile operators,” says Silber.
Logistical nightmare
Maanda Manyatshe, MD of MTN SA, says tying down cellphone numbers to ID numbers will clear up doubts about subscriber numbers in SA and boost transparency in the industry. However, registering the users of the roughly eight million prepaid MTN phone numbers within 12 months will be a mammoth task involving registering on average 600 000 users a month, or 20 000 a day.
Vodacom, which recently connected its 20-millionth subscriber, reported around 13.6 million prepaid customers late last year. Cell C reports 2.2 million prepaid users among its 2.9 million active subscribers.
In order to register all of these users, information campaigns would have to be staged to inform people across the country of the need to register. People would have to register in person, producing photo ID and proof of residence.
While it should be relatively simple to notify contract cellphone subscribers of the new regulations, the process of notifying SA`s roughly 24 million prepaid phone users could take months, resulting in the bulk of the registrations taking place during the last few months of the allotted year.
MTN is hoping to have talks with other industry players and government about the possibility of extending this deadline. MTN says it hopes to negotiate an extension from 12 to 36 months.
Alan Knott-Craig, head of the Vodacom Group, says: “It is clear that crime, especially organised crime, must be dealt a crippling blow. It is true that providing the policing authorities with sophisticated tools to aid them in this mission is fundamental and to that end all businesses must co-operate and make their contribution.
“However, such facilities will cost hundreds of millions of rands and although Vodacom is willing to bear this cost if the law requires it, it is impossible to obtain the names, addresses and ID numbers of all prepaid customers and to verify this information.
“Fifteen million South Africans don`t have ID documents. Apparently more than 15 million South Africans don`t live in a street with a name and number. Since many are not formally employed, they also don`t have a ‘business address`, let alone a postal address. All of which makes it difficult to gather and verify all the required information.
“The new regulation will also inhibit subscribers who need to travel from some distant village to register their cellphone, as it is neither practical nor within their means,” he adds.
The cost of compliance
While RICA clearly has the best intentions, industry players say downsides will include a financial knock to retailers and a possible slowdown in cellphone uptake.
Knott-Craig points out that millions of South Africans who use prepaid cellphones work in the informal sector and many live in far-flung rural areas. “They are completely dependent on their prepaid cellphones to find work and to remain in contact with their families. Depriving them of the ability to communicate via cellular telephony is to once more condemn them to the world of the ‘absolutely have-nots`,” says Knott-Craig.
“It is highly unlikely that the registration of prepaid cellphone customers will bring down the crime rate as it is easy for criminals to get a SIM card from a neighbouring country, commit the crime and throw away the phone, without ever registering it,” says Knott-Craig. “Although crime needs to be fought with all our might, this proposal needs more careful thought in terms of its unintended consequences before becoming law,” he concludes.
MTN adds that the complexity of complying with the new laws could mean informal traders who sell SIM cards in townships could be put out of business.
Manyatshe notes: “Government is looking for more penetration, but some of the laws that are coming will have the opposite effect.”
MTN legal and regulatory head Nkateko Nyoka says that while MTN does not question what the law is seeking to achieve, it appears that the government does not always understand the nature of business in SA. He says the cost of notifying all cellphone subscribers, collecting and collating all the necessary data could run to R100 million.
He says service providers like MTN, which is already gearing up for the process, will have to invest in additional staff such as data capturers, call-centre staff and marketing teams in order to comply with the legislation.
Impact on retail
Warren Marsden, spokesman for the cellular division at Pick ‘n Pay, could not comment on the effects of the new legislation on retailers or consumers, saying the networks were still finalising the details of how it would be implemented.
However, John Edwards, head of financial services and cellular at PEP Stores, believes RICA will have a huge effect on retailers. He says the government has been slow to finalise the required details and format, leaving little time for practical implementation.
Edwards says issues for the retailer include staffing, queue times and systems. “It is likely that a dedicated staff member will have to be allocated to registrations and this has cost implications. Also, our queues will be much slower as it can take up to three minutes to register a SIM. This is very annoying for customers. Furthermore, our point of sale systems have to be changed to cater for registration, and this, too, has cost implications,” he says.
“PEP is working closely with all three networks to come to a solution,” he continues. “As yet, the networks have not indicated if and what the commission will be for registering customers so I can`t say yet if it will be worthwhile [for retailers to continue selling SIM cards].
“This law has laudable aims but it has been poorly thought through and almost certainly will not achieve what it hopes,” he says.
In contrast, the Spar Group doesn`t expect the new legislation to have much impact on it. Chairman of the Spar Guild and Retail Operations Executive Brian Beavon says only the biggest Spar stores sell handsets and SIM cards, which would require user registration. The group`s biggest cellular-related line is airtime, so RICA is not expected to cause problems at the till.
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