Telcos feel pinch of Sim card switch-off

Wednesday February 12 2020

 

By Alex Malanga @ChiefMalanga amalanga@tz.nationmedia.com

Dar es Salaam. The impact of compulsory biometric registration of Sim cards is becoming clearer, with Vodacom Tanzania Plc projecting that its profits could be hit.

The Tanzania Communications Regulatory Authority (TCRA) has directed that all Sim cards be solely registered with national identification numbers issued by the National Identification Authority (Nida).

January 20 was the deadline for Sim cards to be registered biometrically, and telecommunications firms have since lost millions of subscribers.

Vodacom had 15.598 million Sim cards in circulation as of December 31, 2019, according to a statement the listed telecommunication operator has deposited with the Dar es Salaam Stock Exchange (DSE).

However, although TCRA announced that Sim cards that had not been registered would be blocked in phases, Vodacom still had 1.7 million subscribers locked out of its network.

Some five million Vodacom customers had not been biometrically registered as of January 31, 2020.

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“The significant number of barred customers will affect revenue growth. The revenue impact, with the increased compliance cost, will also adversely affect our operating profits,” Vodacom says in the statement.

Latest TCRA figures show that as of Monday, this week, 7.316 million Sim cards that had not been biometricaly registered were switched off.

“However, we have since activated 1.591 million subscribers after they met the requirements for the Sim cards to be reregistered,” TCRA director general James Kilaba told The Citizen yesterday.

Out of the 43.586 million active Sim cards, 74.9 percent had been biometrically registered by Monday, this week.

“We have biometrically registered 32.645 million lines,” Mr Kilaba said.

“Some 10.941 million Sim cards, owned by about 3.5 million people who initially registered them using voter and Zanzibar resident identity cards, have yet to be biometrically registered. We are collaborating with Nida to verify them before switching them off.”

Vodacom says it expects to reconnect a majority of its barred customers over the short to medium term as it engages with TCRA and Nida to ensure that the subscribers are able to access services as soon as possible.

Vodacom registered a total of 1.5 million new subscribers during the entire 2019 calendar year, while the number of its M-Pesa subscribers rose from 6.892 million in December 2018 to 7.477 million in December 2019.

“We now have 47.9 per cent of our customers using our financial services offering. We continued to lead the industry with mobile money market share of 41.2 per cent,” the statement says.

The profit warning could be further compounded by a plan to slash mobile phone interconnection rates.

In 2017, the regulator issued a new set of interconnection rates whereby they were to drop from Sh26.96 per minute in 2017 to Sh15.6 per minute in 2018.

The rates were to drop further to Sh10.4 in 2019 and Sh5.2 in 2020. In 2021, the rates would fall to Sh2.6 before dropping further to Sh2.00 per minute.

Attempts by telecommunication operators to challenge the new rates proved futile after the Fair Competition Tribunal dismissed their appeal last December.