The incentives offered to SIM distributors are one of the causes of the perceived failure in the card registration system under the Regulation of Interception of Communications and Provision of Communication-Related Information Act (Rica) which is intended to enable law enforcement to trace phones used in crimes back to individual users.
“The commercials drive a lot of the behaviours,” one whistle-blower claims. “The SIM distributors get a fee for every SIM card activated, and ongoing revenue for airtime loaded for the life cycle of those cards. It cascades down to the individual shop; everyone gets a piece of the pie and that’s where a multibillion-rand ecosystem has been forged for the last 20-30 years.”
This is one of several claims being made about perceived failures in the SIM card registration system. DA shadow communications & digital technologies minister Natasha Mazzone wrote an opinion piece for the Daily Maverick on the topic, and other publications have covered how easy it is to buy a SIM without complying with Rica.
The issue was raised in August when a witness in the high court in Pretoria testified that an illegal “SIM swap” had been done on murdered footballer Senzo Meyiwa’s cellphone number a day after he was killed. After that, civil society organisation Public Interest SA told ITWeb that the Independent Communication Authority of SA (Icasa) should impose steep penalties on mobile operators for noncompliance.
The industry whistle-blower alleges that the connection incentive offered by mobile network operators drives Rica circumvention. Partners are incentivised for activated SIMs, how many stay active on the system and how long, and how many recharges (and at what value) are done on the SIM, as well as correct Rica processes.
The source gave a hypothetical commercial example of the incentives. The cost to a store or distributor of a wholesale SIM is R5 and the cost of that SIM “qualifying” for the connection incentive (active with minimum threshold of airtime loaded) is R30 for a total of R35. The distributor sells the SIM to a consumer for R22 and receives a connection incentive of R20, so the profit per SIM is R7.
If even a small portion of the 165-million SIMs entering the market annually are illegally activated in this way, that is a potential pot of millions annually. In an ad hoc survey conducted by Business Day, 70% of the SIMs bought for the purposes of writing this article were sold without requiring ID for Rica.
Constitutional Court
Rica governs the interception of broader communication, including paper-based, landlines and internet service provision, but is primarily associated with mobile phone communication. In theory, the act enables law enforcement to trace phones used in crimes back to individual users. However, in practice it has been a controversial law from the outset, criticised by both industry and consumers.
In 2021 the Constitutional Court struck down parts of Rica and instructed parliament to amend it, including the banning of mass surveillance and oversight for surveillance of privileged communications such as those between journalists and sources, and lawyers and clients. The state’s defence was that privacy infringements were justified by the necessity of state surveillance and the fight against crime.
In August the department of justice & constitutional development published a summary of proposed amendments to the Rica amendment bill, which it says will better designate the roles of certain parties and provide necessary safeguards.
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