Background
In several countries, customers of prepaid or pay-as-you-go (PAYG) services can anonymously activate their subscriber identity module (SIM) card simply by purchasing credit, as formal user registration is not required. At the end of 2020, 72% of mobile subscriptions were prepaid20and some 150 governments around the world21 have mandated prepaid SIM registration, citing a perceived but unproven link between the introduction of such policies and the reduction of criminal and anti-social behaviour. Mandated prepaid SIM registration is most prevalent in African countries, where SIM registration is required to identify the user.
Some governments, including the Czech Republic, UK and USA, have decided against mandating registration for prepaid SIM users, concluding that the potential loopholes and implementation challenges outweigh the merits.
SIM registration can, however, allow many consumers to access value-added mobile and digital services that would not otherwise be available to them as unregistered users, including identity-linked services such as mobile money, e-health and e-government services.
For a SIM registration policy to create positive outcomes for consumers, it must be implemented in a pragmatic way that takes local market conditions into account, such as the ability of mobile operators to verify customer IDs. If registration requirements are too onerous for a customer to meet, mandating a SIM registration policy may lead to implementation challenges and unforeseen consequences. For example, it could unintentionally exclude vulnerable and socially disadvantaged consumers or refugees who lack the required IDs. It might also lead to the emergence of an underground market for fraudulently registered or stolen SIM cards, driven by the desire of some mobile users, including criminals, to remain anonymous.
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 registration of prepaid SIM card users can have valuable benefits for citizens, governments should not mandate it.
To date, there has been no empirical evidence that mandatory SIM registration directly leads to a reduction in crime. Where a decision to mandate the registration of prepaid SIM users has been made, we recommend that governments consider global best practices and allow registration mechanisms that are flexible, proportionate and relevant to the market, including the level of official ID penetration and the timing of any national identity roll-out plans.
If these conditions are met, the SIM registration exercise is more likely to be effective and lead to more accurate customer databases. Furthermore, a robust customer verification and authentication system can enable mobile operators to facilitate the creation of digital identity solutions, empowering customers to access a variety of mobile and non-mobile services.
We urge governments that are considering the introduction or revision of mandatory SIM registration to take the following steps before finalising their plans:
- Consult, collaborate and communicate with mobile operators before, during and after the implementation exercise.
- Balance national security demands against the protection of citizens’ rights, particularly where governments mandate SIM registration for security reasons.
- Set realistic timescales for designing, testing and implementing registration processes.
- Provide certainty and clarity on registration requirements before any implementation.
- Allow and/or encourage the storage of electronic records and design registration processes that are administratively ‘light’.
- Allow and/or encourage the SIM-registered customer to access other value-added mobile and digital services.
- Support mobile operators in the implementation of SIM registration programmes by contributing to joint communication activities and their operational costs.
Resources
Access to Mobile Services and Proof of Identity, GSMA, April 2021
Enabling Access to Mobile Services for the Forcibly Displaced, GSMA, September 2017
Regulatory and Policy Trends Impacting Digital Identity and the Role of Mobile, GSMA, October 2016
Mandatory Registration of Prepaid SIM Cards: Addressing Challenges through Best Practice, GSMA, April 2016
20 GSMA Intelligence, prepaid penetration (prepaid connections, Q3, 2020)
21 GSMA (2021), Access to Mobile Services and Proof of Identity 2021