Win­ners take all in the mo­bile game

High stakes

Finweek English Edition - - Tech Trends -

AS THE MO­BILE MAR­KET con­tin­ues to bloom in South Africa, the stakes for the play­ers at the top of the sec­tor be­come more sub­stan­tial. But it’s a tough game to play: dis­rup­tions are rife, reg­u­la­tory pres­sure is on, and new play­ers – such as Telkom Mo­bile and rein­vented play­ers, like Cell C – are plot­ting to take down the kings of the cas­tle – Vo­da­com and MTN.

In­ter­na­tional re­search and con­sult­ing group Delta Part­ners is look­ing to pro­vide some guid­ing light in SA’s fre­netic tele­coms sec­tor and last week pub­lished a “white paper” called South African Tele­coms in 2010: high stakes for the big win­ners, in which it makes some key ob­ser­va­tions.

An­drew Snead, se­nior part­ner for sub-Sa­ha­ran Africa at Delta Part­ners, says in­dus­try growth last year was ham­pered by a mix of eco­nomic, regu

la­tory and other dy­nam­ics: but those also brought some clar­ity. The Reg­u­la­tion of In­ter­cep­tion of Com­mu­ni­ca­tions and Pro­vi­sion of Com­mu­ni­ca­tion-Re­lated In­for­ma­tion Act (Rica), which re­quires cel­lu­lar providers to reg­is­ter their cus­tomers, has had a neg­a­tive im­pact. For ex­am­ple, de­clin­ing sub­scriber num­bers.

But Snead says Rica has also had the ef­fect of re­duc­ing the num­ber of non-ac­tive SIM cards in the mar­ket. It’s also re­duced the preva­lence of sin­gle cel­lu­lar sub­scribers car­ry­ing mul­ti­ple cards. “That’s led to a more re­al­is­tic view of how many sub­scribers the net­works have.”

That said, Snead says Rica is fail­ing in its goals, how­ever noble those ob­jec­tives are. “Rica is sup­posed to bol­ster se­cu­rity but the sys­tem it­self has paved the way for black-mar­ket sales of reg­is­tered SIM cards. There’s no limit on how many SIM cards any one user can reg­is­ter and it’s also easy to reg­is­ter with just a pass­port, in which case a proof of res­i­dence isn’t re­quired. So what that does is it en­ables peo­ple to buy many SIM cards, reg­is­ter them all fraud­u­lently and then re­sell them.”

The net ef­fect is that cel­lu­lar providers are be­ing ham­pered in get­ting their ser­vices to mar­ket in a le­git­i­mate way, while the im­pact on crime is highly de­bat­able. The white paper also points out while SA’s broad­band mar­ket grew sig­nif­i­cantly

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