Cellphone laws could backfire, MTN warns
Two pieces of legislation affecting the industry had noble aims, but were badly drafted and likely to be badly implemented, MTN SA’s MD, Maanda Manyatshe, said The Regulation of Interception of Communications and Provision of Communication-related Information Act — due to come into effect in July — has been slated widely for requiring all existing cellphone users and anyone buying a new SIM card to show their identity book and have their details captured on a database.
That could stifle cellphone take up in the informal sector and make small businesses quit selling SIM cards because of the onerous conditions, according to Manyatshe.
MTN supported the interception bill as many criminal cases had been solved with the help of cellphone call records, he said.
However, requiring operators to register all existing users within a year, meant physically inspecting and capturing the identity details of 8000 people every hour.
“One of the biggest pressures we face is to bring the cost to consumers down as much as we can, but these regulations increase the costs for consumers,” Manyatshe said.
Instead of helping cellphones reach the informal sector, the law would restrict sales to the formal sector where there were proper systems for recording a person’s identity details, he said. Spazas in Soweto would not want to sell SIM cards because of the new requirements. “It’s also a big challenge for retailers like Pep and Checkers because they don’t welcome the hassle of registering prepaid users,” he said.
Cell C’s head of regulatory affairs, Karabo Motlana, agrees the act will impose technical requirements that rural sellers of cellular services are not geared to handle.
Potential customers unable to buy a prepaid starter pack without showing ID and proof of residence may not bother to subscribe, he says.
The second law, the Electronic Communications Act that President Thabo Mbeki signed last month, was “a lawyer’s paradise” as it could be interpreted in so many different ways, Manyatshe said.
The act was supposed to increase competition and broaden the choice of services, but it needed months of reworking to ensure that government, the industry, consumers and the regulatory authority would not interpret it differently, he said.
The act forces any operator deemed to hold “significant market power” to let other service providers use its network infrastructure at cost price, rather than allowing the operator to charge a commercial fee for the use of its network. That killed any incentive for stronger operators to invest in their infrastructure as they would not be able recoup their input costs, he said.
“It’s not right to say the government should stand back and not interfere, but it must be measured so there is the freedom to operate,” Manyatshe said.
BMI-TechKnowledge analyst Richard Hurst agrees that the new laws could “alter the course” of the cellphone industry in SA.
If the market was allowed to grow unhindered there could be between 41-million and 43-million Sim cards in circulation by 2009, up from 27-million now.
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