SIM registration: operators can expect lower revenues

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Few months ago, the Communications Commission of Kenya started a campaign requiring mobile phone subscribers to register their SIM cards in order to continue using the services. SIM cards enable users to communicate and transact using mobile devices.

In a country dominated by prepaid SIM cards, many people had complained about the police and the inability to crack down on fraud, many remember the criminal ring that was operating out of Kamiti prison and had managed to extort many through fake Mpesa transactions.

So, for that reason, SIM registration is a great idea 🙂 . The registration requires users to  show proof of identity, which is usually the case when registering for mobile money accounts. Many were just encouraged to register for mobile money.

Some people will not register their SIMs because they are the conmen while others may be keeping separate lines for clandestine affairs and registration may expose them, and others just do not want to. Whatever the reason, you have no choice 🙂 register or abandon 🙂

Many countries in Africa are starting with the registration, Ghana and South Africa have been on the fore front. You can read more about Regulation of Interception of Communications Act (RICA) in South Africa.

What will be the effect?

1. Cybercrime will go down and we can demand better action from the authorities- they can no longer say its hard to trace, blame it on pre paid culture etc…

2. Mobile company revenues to go down

After the deadline lapsed on Dec 31st, Safaricom announced that it had switched off 800,000 subscribers on its network, who hadn’t registered their SIM cards as required.

Given that the registration was manual, then the records are compiled and taken to Safaricom house and later entered into the system, four days was a quick turnaround for Safaricom to update their system with all the country wide registrations. Safaricom has 19 million subscribers and it says 85% have registered.

Let us assume that within a week, Safaricom was able to input the data and finalize on who had registered and who hadn’t, the switched off SIMs will result in loss of revenue, until they register or buy new SIMs.

In recent years, the Average Revenue Per User (ARPU) has been falling in all mobile service providers, with the call per second costs going down, competition and availability of internet calling and SMS options.

If the lines disconnected had been spending sh. 10 on credit in a month, that is sh. 8 million loss to the network.

I am sure other networks will reveal the lines switched off, and the 2013 Q1 results will start showing the falling revenues.

I could not trace the last results for Orange, Airtel and Yu but you can get Safaricom last results here