RICA Amendment Bill Submission Portfolio Committee on Justice and Constitutional Development 30 May 2006.

RICA Amendment Bill Submission

Portfolio Committee on Justice and Constitutional Development

30 May 2006

Introduction

• Cell C is grateful for the opportunity to present its views on the RICA Amendment Bill to the Portfolio Committee.

• We are further grateful to the Department of Justice, and the Deputy Minister of Justice for considering the mobile operators’ proposal to shift to an electronic data capture solution

• We support the objectives of the Act and subscriber registration in particular, and recognise the value in obtaining subscriber information in relation to the fight against crime.

• We believe that the existing requirements for a paper-based registration process pose some inherent difficulties on a practical level especially for our distribution channels and Law Enforcement Agencies alike.

• Cell C has worked closely with the other mobile operators, the DoJ and the LEAs in trying to develop an electronic data capture solution which we hope will meet the objectives of the legislation.

• Although development of our solution is far advanced, its finalisation is dependent on the outcomes of this legislative process.

Summary of Discussion

• Introduction• How Ready is Cell C for Subscriber Registration?• Electronic Solution• Comments on the Amendment Bill

– Capturing information regarding MSISDNs as opposed to SIM cards– Capturing of Handset Information (IMEI)– Detail of customer information to be captured

• first and surname• single address

– Address verification– Transfer of SIM cards and/or handsets– Period of registration for historical customers– Uniform Incentives

• Conclusion

How Ready is Cell C for Subscriber Registration?

• Cell C has been well-aware of the 30 June 2006 deadline & has been proactive in preparing to meet its subscriber registration obligations, given the limitations that it faces in developing a technical solution & in designing business processes in the absence of any finality in terms of the legislative requirements.

• Amongst Cell C’s accomplishments to date, we have:– conducted a national road show through which we have managed to communicate the elements of our proposed

solution to our distribution partners, to alert them to the key changes that will occur in our business processes;– commenced the development of the application for the electronic solution and ordered devices to support such

application, which devices and application should be ready for 1 July 2006 provided there is no change to the data capture requirements;

– developed a technical interface for retailers to send subscriber information to Cell C’s database so that they can be activated, in consultation with the other mobile operators;

– in conjunction with the other operators, almost finalised a joint media & communication campaign to educate our subscribers (we have done much of the conceptual and creative work, but are awaiting the finalisation of this legislative process in order to confirm the information that will be contained in the brochures, fliers, posters and point of sale material, as well as the text for the radio advertisements, as would support the RICA process, as it is critical that the information is accurate); and

– Established and staffed a “RICA Office” at Cell C to manage the appointment of officers and the administrative processes associated with the collection and storing of subscriber information.

– Drafted contractual agreements and Confidentiality Agreements in respect of RICA data capture, and circulated them to our distribution partners

• Cell C has proceeded with development on the basis of our consultation with the DoJ and the Deputy Minister, as is reflected in our submission to the Deputy Minister of Justice in November 2005. The understanding of all stakeholders has been that the electronic data capture process’ development would proceed in parallel with the legislative amendments with a view to ensuring that the 30 June 2006 deadline is met.

Electronic Solution for Individual RICA Officers

Cell C’s Database

Device

Standard Handset with

WIG Application

Some Security Features:-Individual RICA Officer must go through Cell C vetting process, & Cell C retains RICA Officers’ details. RICA Officers working for our distribution partners must be vetted by such partners.

-RICA Officer obtains password from Cell C which allows him/her to access the application on the device/handset.

-RICA Officer/Retailer Information is recorded against each registration.

-Confirmation “SMS” sent to RICA Officer /On-screen confirmation of acceptance of registration in the case of Retailers.

-Confirmation “SMS” sent to customer from Cell C, and received as soon as SIM card is activated

Cell C

Cell C Network

Cell C Network

RICA Officer

Confirm

ation &

Activation

Confirmation

Detailed Comments on RICA Amendment Bill

Relationship between MSISDN – SIM - IMEI

• A SIM Card is associated with an MSISDN (cellphone number)

• A Handset cannot be used without a SIM card (associated with a cell phone number)

• Given a MSISDN (cell phone number) an operator’s Fraud Management System can identify the handset (IMEI) in which the SIM card was when the phone call was made.

• Thus, it is sufficient to capture the cell phone number (MSISDN) as that necessarily provides information on the both the SIM Card and the Handset. Handset number = IMEI

SIM Card number = IMSI

084 123 4567 Cell phone number = MSISDN

SIM card may be replaced because it is lost, damaged, stolen…

Handset may be replaced because the battery is dead or if it is lost, damaged, stolen…

Cellphone number belongs to the customer, does not change and can even be move across networks

Cell C

Capturing information regarding MSISDNs vs SIMs

• A customer is identified by the mobile operator and the public by his/her cell phone number (e.g. 084 123 4567).

• A person’s cell phone number is a unique identification number technically known as the MSISDN –

– The cell phone number is the crucial identifier allocated by a mobile telecommunication service provider to a customer

– The cell phone number is unique -- no two people have the same cell phone number!– The cell phone number is what enables a customer to make and receive calls. Without

this number a customer cannot access the network.

• Through the cell phone number (MSISDN), the attached SIM card is capable of being identified at any point in time.

• SIM cards, on the other hand, may be lost, stolen or damaged, and as a result re-issued. Changing the SIM card does not affect the cell phone number (MSISDN). And re-registering each time a new SIM-card is issued, would inconvenience subscribers, and at the same time not further the objectives of the Act as long as the MSISDN is captured.

Capturing information regarding MSISDNs vs SIMs (2)

• MSISDN becomes increasingly important as competition in the telecoms sector increases and number portability is introduced in September 2006. Number portability will allow customer to switch operators and keep their cell phone number (MSISDN).

• Cell C is of the opinion, and the other mobile operators have agreed, that to facilitate registration by all cell phone users, RICA legislation should oblige the operators to advise each other with respect to whether a cell phone number (MSISDN) has already been registered on their network or not when the subscriber moves. This will :

– Cause minimal inconvenience for subscribers (as they will only have to register once)– Ensure that RICA does not negatively impact number portability by being a barrier to churn (i.e. will

not stop subscribers from porting);– Ensure that subscribers who have not registered, but are porting are required to register for RICA

when porting (i.e. use porting to speed up registrations)– Assist in meeting the objectives of RICA

• In its submission Cell C has proposed wording to be included in the RICA Amendment Bill to ensure that operators advise one another whether or not their customers have registered.

Capturing of Handset Information (IMEI)

• Customers may use many different handsets purchased from their mobile operator (e.g. with a contract), from other independent channels (e.g. a cell phone shop), or even overseas.

• It would therefore be impractical, and of little value to capture the handset number (IMEI) up front, as part of the subscriber registration process.

• Cell C recognises the value of handset information for the LEAs and fortunately, regardless of what handset is used, through its Fraud Management System, Cell C can identify the handset number (IMEI) if the MSISDN is known.

• Thus, although there may be no need to capture the handset number up front, Cell C acknowledges that there is, however, a need to ensure that a process exists in our systems to capture the IMEI and present it to the LEAs upon request.

• Cell C is pleased to report that it is satisfied that the DoJ has taken its concerns regarding the IMEI into consideration in drafting the Amendment Bill, and accordingly confirms that in line with the requirements of section 40(2)(b) Cell C is already compliant in that the registration of an MSISDN by association results in the capturing of the IMEI of any cellular phone used with that MSISDN.

• For the sake of consistency, we would therefore propose that section 40(2)(b) be amended to reflect that the IMEI of the cell phone actually used in conjunction with the registered MSISDN is captured.

Capturing of Handset Information (IMEI)

MSISDN IMEI First Date Last Date Used Days Used Model

27846746264 35010210328807 2002/10/13 12:00:00 AM 2002/10/21 12:00:00 AM 9 Nokia 3310

27846746264 35076920170502 2002/10/17 12:00:00 AM 2002/10/17 12:00:00 AM 1 Nokia 6210

27846746264 35078020231985 2002/09/05 12:00:00 AM 2004/09/18 07:39:29 PM 386 Nokia 6310i

27846746264 35099120947492 2003/09/13 12:00:00 AM 2003/09/13 12:00:00 AM 1 Nokia 6100

27846746264 35249400609530 2004/04/16 07:05:19 PM 2004/04/17 09:07:54 AM 2 Motorola MQ3-4411A11

27846746264 35252300080472 2003/12/30 12:00:00 AM 2004/09/16 10:17:26 PM 43 Nokia 6100

27846746264 35376800382917 2004/09/19 12:00:00 AM 2005/11/14 07:39:02 PM 384 Nokia 6230

27846746264 35566700490528 2005/10/12 12:34:53 PM 2006/05/26 08:15:05 PM 186 Nokia 6610i

27846746264 44921891959563 2002/09/08 12:00:00 AM 2002/11/20 12:00:00 AM 33 Nokia 5110

27846746264 44927009548239 2003/06/26 12:00:00 AM 2003/06/26 12:00:00 AM 1 Motorola MC2-41E15

MSISDN IMEI First Date Last Date Used Days Used Model

27844744279 35078020231985 2003/12/15 11:21:58 AM 2003/12/15 11:22:17 AM 1 Nokia 6310i

27846047889 35078020231985 2005/01/11 11:12:51 AM 2005/09/03 08:37:52 PM 44 Nokia 6310i

27846746264 35078020231985 2002/09/05 12:00:00 AM 2004/09/18 07:39:29 PM 386 Nokia 6310i

27847774067 35078020231985 2002/09/05 12:00:00 AM 2002/09/05 12:00:00 AM 1 Nokia 6310i

Same MSISDN different IMEI number

Same IMEI number different MSISDN

Detail of customer information to be captured

RICA ACT (with respect to natural persons)

RICA AMENDMENT BILL

CELL C PROPOSAL

SIM Card MSISDN + SIM Card MSISDN associated with a SIM Card

ID Number + certified copy of ID

ID Number ID Number

Full Names Full names First Name and Surname

2 Addresses – Residential and business or postal (which ever is relevant) – no proof

3 Addresses – residential, business and postal + submit written proof

Relevant physical address –residential or business

IMEI IMEI (in system) IMEI (in system)

Detail of customer information to be captured (2)

• Cell C’s proposal differs from that which has been tabled before Parliament in that the Amendment Bill specifies much more information to be captured including

– full names, and – three addresses – residential address, business address and postal address.

• We believe that LEAs can obtain the full names of a subscriber from the Home Affairs database if the ID number is known. The capture of the first name and surname, as proposed, would provide an added level of validation.

• 3 addresses is onerous, and unrealistic for many customers including those who are either unemployed, have no postal address or are visiting the country. Validation of such addresses is equally difficult and an additional requirement from the original law.

• Cell C’s solution was developed in line with the proposal made to DoJ in February 2006, and technically, at this late stage it is not practical to re-configure our systems. It is important to keep data capture requirements as simple as possible, while still obtaining the necessary information, as the proposed use of WIG enabled handsets in the informal sector with complex data requirements may lead to both system and human errors that will negatively impact on data integrity.

Impact of technology on data capture

• Cell C’s deliberate technology choice for the implementation of subscriber registration is “WIG” which is a stable application that can be rolled out on even the most basic handsets.

• This is a cost-effective solution which ensures that even persons in rural and under-serviced areas who may have older handsets can become Cell C RICA Officers and thus register our subscribers using their own handsets (removing investment by RICA Officers in handsets/devices).

• Given Cell C’s technology choice for the electronic solution which can be widely rolled out, there are also some size limitations that restrict the level of data that can be captured. If the requirement remains to register all the data fields as currently proposed in the Amendment Bill, it would possibly mean that our “WIG” technology choice may not be suitable and we will have to do additional development.

• A further consequence may be that registration will only be possible at the formal distribution channels where advanced handsets and devices are available for registration. This will in turn mean that the subscribers who are located in rural areas, or in areas that are not close to a formal channel will be prejudiced, thus impacting negatively on them and on crucial economic growth in this sector.

Transfer of SIM cards and/or handsets

• As explained earlier, we will always have a customers’ handset number (IMEI) if the customer’s MSISDN is registered. Cell C thus proposes the deletion of the reference to “cellular phone” in s40(5). It should only refer to transfer of a SIM card associated with a registered MSISDN.

• Secondly, Cell C is concerned that section 40(5) introduces a hybrid paper-based/electronic registration process in cases of transfer of ownership.

• While we understand the value of tracing the initial & subsequent owners for investigative purposes, we respectfully suggest that the manner in which it is proposed that this happens in the Bill may create a situation which could lead to fraudulent transfers since any person can claim that s/he transferred his/her SIM card associated with a registered MSISDN to another person by mere reference to details s/he has written down. It opens an opportunity for criminals to abuse the system.

• Persons with criminal intent may use this loophole to report fraudulent transfers.

• Cell C thus proposes that the obligation be placed on the new owner of the SIM card associated with a registered MSISDN to register his/her details with the mobile operator who has put in place security measures, in terms of the standard registration procedure set out in section 40(2).

• This obligation together with the existing obligation on the existing owner in terms of section 41(1) to report the loss/transfer of a SIM card should ensure that updated customer information is retained in case of transfer of ownership.

Uniform Incentive

• In line with the joint proposal made by all mobile operators to the DoJ on 27 March 2006, Cell C proposes that the Portfolio Committee introduces a uniform incentive fee for the registration officers of all three networks subject to compliance with the appropriate legal requirements. The principle being that registration is a statutory obligation and is not a competitive action, but merely serves to ensure compliance with RICA.

• There is precedent for the imposition of a requirement for the mobile operators to agree a uniform tariff in other instances where due to a non-competitive, statutory obligation, the mobile operators must cooperate in the determination of prices, under the watchful eye of the regulator, ICASA. This is the case

– in the determination of tariffs for our Community Service Telephones which are rolled out in under-serviced areas, and

– in the determination of the retail tariff for the free SIM cards that operators must provide in terms of their universal service obligations.

• Cell C’s proposed amendment will ensure that an element of competition is not introduced into what is essentially a legislative requirement, with potentially negative and anti-competitive implications.

Period of registration for historical customers

• Cell C understands and supports the urgency in registering existing subscribers given the importance of such information for the Law Enforcement Agencies.

• We will try to ensure that existing subscribers register well ahead of the deadline for subscriber registration, but alert the Portfolio Committee that a one-year timeframe to register all existing subscribers, the majority of whom are pre-paid and many of whom are not resident in urban areas, is neither practical nor is there any indication that in the circumstances it will be workable.

• Although Cell C’s electronic solution will be ready for use on 30 June 2006, Cell C’s RICA footprint or coverage of Registration Points & RICA officers will not be complete.

– We will continue to roll out more registration points and officers over the course of the year, but the existing registration points will not be operating at full capacity from day one.

– It is therefore critical that sufficient time is provided in which to resolve initial teething problems associated with the registration of new subscribers before Cell C can attend fully to the registration of historical subscribers.

• With 3 million subscribers to register, the proposed one-year timeframe will require that we register 250,000 subscribers a month over twelve months. This does not take into account the new subscribers that will have to be registered. Further should the proposed SIM-based process be retained, not only will new subscribers have to be registered, but porting subscribers will have to be re-registered.

Conclusion

• Cell C is committed to meeting the objectives of the Act, and therefore confirms that its comments as contained in this submission are based largely on a concern that the Amendment Bill in its current form is not consistent with what Cell C has been developing, in good faith, on the basis of prior consultations with all concerned.

• Thus despite the best efforts that Cell C has put into trying to ensure that we are ready to register subscribers by 30 June 2006, we have identified a significant risk in the fact that the electronic registration process that has been tabled constitutes in some respects a revision to understandings reached in respect of processes and this may negatively impact Cell C’s ability to comply with the legislation.

• We hope that our input will help to mitigate that risk, and will help to move this process forward.