Mandatory Registration of Prepaid SIM Card Users
In many countries, pay-monthly or post-paid mobile phone contracts are common. These require customers to provide proof of identification and evidence of sufficient funds before they enter into a billing arrangement with their mobile network operator.
In the case of prepaid or pay-as-yougo services, customers must purchase credit to activate their subscriber identity module (SIM) card. This can be done anonymously, as registration is not typically required.
An increasing number of governments,however, have recently introduced mandatory registration of prepaid SIM card users, primarily as a tool to counter terrorism and improve law enforcement.
The take-up of mobile-commerce and e-government services can be boosted by the registration of all SIM card users, as it enables them to verify their identity and log in to such services using their mobile device. Nevertheless,mandatory registration often leads to implementation challenges and unforeseen consequences, particularly
in developing countries, where the majority of mobile users have prepaid SIM cards.
These challenges include:
■ Failure by some mobile users to understand that their SIM cards could be deactivated, sometimes without warning, if they do not register by a certain deadline;
■ Barriers that prevent some mobile users from physically registering, e.g., the distance to a registration centre;
■ Limitations to prepaid SIM card distribution channels due to the registration requirement;
■ The cost of implementation, which can be significant and may lead to higher prices for mobile users;
■ The emergence of a black market for fraudulently-registered or stolen SIM cards, based on the desire by some mobile users, including criminals, to remain anonymous;
■ Mobile user concerns related to the access, security, use and retention of their personal data, particularly in the absence of national laws on privacy and freedom of expression
Some governments, including those of the UK and Romania, have decided
against mandating registration of prepaid SIM users, concluding that the potential loopholes and implementation challenges outweigh the merits.
Debate
To what extent do the benefits of mandatory prepaid SIM registration outweigh the costs and risks?
What factors should governments consider before mandating such a policy?
Industry Position
While prepaid registration of prepaid SIM card users could offer valuable benefits to citizens and consumers, governments should not mandate it.
To date, there is no evidence that mandatory registration of prepaid SIM card users leads to a reduction in crime.
The effectiveness of prepaid SIM user registration depends on local market conditions, such as the extent to which the central government maintains robust citizen identity records.
Where prepaid SIM user registration can create value and positive outcomes for consumers, mobile operators and governments will have an incentive to offer services that encourage consumers to register voluntarily.
We urge governments that are considering such a policy to examine the local market conditions, engage with industry and conduct impact assessments before introducing
regulation.
Where a decision to mandate the registration of prepaid SIM users has been made, we recommend that governments take into account global best practices and allow registration mechanisms that are flexible and proportionate.