A cat and mouse game as Econet disconnects 1 million subscribers

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Recently, Econet Wireless, the largest mobile network operator sent out messages to a host of its subscribers, urging them to register their SIM cards before the 13th of November 2015.

According to a report in the Herald, 1 million subscribers were eventually disconnected from the network after failing to meet this deadline. In its latest financial results, Econet stated that it has 9 million subscribers and earlier this year, the operator registered its first loss of subscribers, so the 1 million subscribers lost is a big deal.

Along with the two other mobile network operators in Zimbabwe, Econet is obliged by the telecoms regulator, POTRAZ, to ensure that all its subscribers are registered with accurate details, something that meets mobile telecoms Know Your Customer (KYC) requirements and helps monitor criminal activity on the network.

It’s the same SIM registration issue that landed Nigeria’s MTN in a $5,2 billion mess when it emerged that it had failed to register 5 million of its subscribers. POTRAZ hasn’t issued any jaw-dropping fines to local operators for this.

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This disconnection of lines is similar to another round of SIM card disconnections that Econet carried out in mid-June this year. Econet has officially stated that this SIM card disconnection is an ongoing process, implying that this strategy will be used continuously to deal with a persistent problem.

The case for Nigerian SIM registration failure and the shortcomings of local operators raises questions on how these guys are failing to sign up subscribers in the first place.

This is clearly an important aspect in telecoms customer registration and retention, which means that either the mobile operators are failing to deal with this challenge due to some oversight, or are turning a blind eye to the root causes.

By most indications, unregistered SIM cards enter the market through unofficial retail points. These are street vendors and SIM card distributors whose presence is very visible in the busy parts of any city or town.

Even after the disconnection of unregistered subscribers, there is still going to be a quota of SIM cards that will end up in the hands of these street vendors and their continued distribution of SIM cards not only represents a hole in SIM distribution and registration, but also shows that they are servicing a need and are providing convenience.

It seems to suggest that mobile operators are willing to deal with the unregistered SIM cards after they’ve already been activated on their networks, a strategy which would maintain subscriber sign up momentum which helps the operators garner revenue.

It becomes a cat and mouse game of sorts. the operators “blindly” sign up unregistered subscribers because they need them on their networks, then officially disconnect them when the threat of regulatory intervention looms.

Unless the regulator comes up with a better way of monitoring and managing the situations, it’s going to keep on happening.

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One Comment

  1. tinm@n says:

    That’s not what “cat and mouse game” means at all.

    But I digress

    Econet is mitigating the risk of the same thing that happened to MTN, playing out on them.

    I’m convinced that POTRAZ may have dabbled with the idea of enforcing a similar penalty.

    Econet having a large subscriber base in turn means it has proportional measure of unregistered subscribers. If POTRAZ were to come down hard,they would feel the pain the most.

    This latest move and their claim that “it is an ongoing process” absolves them from any future scrutiny on other additional “unregistered” numbers. It basically covers their backsides.

    They would simply point out to POTRAZ that the “process is ongoing” and they have deregistered numbers as is evident.

    In the mean time,money will keep trickling in as de-registration “goes on”. Complete de-registration has a direct impact on revenue…which they will not lose.

    Same reason why all telecoms companies won’t easily block or blacklist a phone. It has a direct revenue implication

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