Valuable Bits

After a meeting with Richard Kayombo, Deputy Director, at Tanzanian Communication Regulatory Authority yesterday we can conclude that there is much happening in the regulatory part of the theory we posted earlier. The 1st of July this year a new KYC legislation will be implemented, forcing all mobile network operators (MNOs) to register to whom they sell their pre-paid SIM-cards to. The buyer must show a valid ID (with a photo), one thing that’s far from easy in a country without any national ID system.

Here is an opportunity for mobile banking, because before an ID was  needed only when you wanted to use the MNOs mobile banking service. As it is now, it’s a lot easier just to buy a SIM card at the local shop than to find a place to register for m-banking services and provide them with an ID. After the 1st of July, the same type of ID will be required for getting a SIM-card as for becoming an M-Pesa, Zap or Z-Pesa costumer. This will make it very easy to bundle the mobile banking service together with the SIM-card. You can automatically become an m-banking user when you start to use a mobile phone.

Within only 6 months, up until 1st of January 2010, all current costumers will have to undergo the same procedure with registering and providing a valid form of ID. After this, all SIM-card that haven’t been registered and connected to an individual will be terminated. This means all existing pre-paid costumers within the next 8 months will be presented with the choice of becoming mobile banking costumers without going through additional registrations other than the one needed to keep the subscription.

Additionally, as it is now many people use multiple MNOs in order to get the most out of special offers, also, the coverage of the MNOs vary so when traveling to another location you may have to switch. It will be interesting to see if people will register “fully” with all MNOs or choose to use only one with the implementation of this new law.

On the downside, this will probably dampen the spread of mobile phones in Tanzania. The country saw the fastest growth of mobile phones in Africa last year, via Informa Telecoms & Media via Nairobikoll. Millions of users will have to provide ID and face termination of their subscriptions if they fail to do so. It will definitely cause some problems among the users. The reasons for implementing this law was to prevent theft of mobile devices and other criminal activities, ranging from abuses and harasses to organized crime.