1. SA’s cellular industry was launched in 1994 with 2 networks and a projected subscriber ceiling of only 2-million.

2. In 96, Vodacom launched a pre-paid service, adopting a system first used by Portugal’s TMN in Sep 95. MTN followed fast.

3. At launch the industry expected to reach the 1-million mark in 6-10 years. It reached the million mark in 3 years.

4. In March 2000, the industry reached 5-million active accounts. A small gap (7%) emerged between users and accounts.

5. Active accounts doubled again in just 2 years to 2002, but with the gap between users and accounts now growing to 13%.

6. Subs more than doubled next 3 years, to 23m. World Wide Worx’s Mobility 2005 study exposed users/accounts gap: then 20%+

7. December 2008 sees mobile market maturity landmark: at 50.02m, more connections than people. Networks admit to the gap.

8. Analysis of ITU stats: 63 countries had more mobile accounts than people in 2008. It has business and policy implications.

9. SA is second country in Africa, after Seychelles, to have more connections than users. Tunisia, Algeria, Mauritius next.

10. SA 50m connections, but only 34m users. No room for smugness about 100% penetration. See report at http://tr.im/qJfm.

Thank you for coming! The #tweenote presentation, “SA’s Mobile Subscribers: Mind the Gap”, is available at The Big Change. http://tr.im/s7Za

* Arthur’s first tweenote presentation, on the role of Web 2.0 in the evolution of Internet maturity, was made in 2008, and repeated in June 2009. It will be reproduced in The Big Change shortly.

As of yesterday, I am a criminal.

I brazenly walked into a large CNA outlet, stepped up to the cellphone service kiosk, and without any form of identification demanded two starter packs, one with a Vodacom phone number and one with MTN. In full sight of anyone who bothered to look, I took the packs to the cashier and handed over R1,98 to cover the 99c cost of each pack.

It gets worse.

Once I got home, in total secrecy, I slipped the SIM cards from each provider into two old phones, and switched them on. The MTN card worked immediately, and I was able to begin receiving calls without any further ado. The Vodacom card required me to dial 100 to activate it, and I could then start receiving calls on that phone too.

In the above process, I violated the Regulation of Interception of Communications and Provision of Communication-Related Information Act (Rica) about half a dozen times – that I know about. The law came into effect on 1 July this year, even though it had been passed back in 2003. Various impracticalities, mainly relating to the process of identifying cellphone users and SIM card owners, delayed its implementation. Following various amendments, it now criminalises a range of acts of commission and omission that previously were normal everyday practice.




Anyone buying a cellphone or a SIM card is required to provide full names and surname, ID number or passport number, and proof of physical address. This could be by means of any document that includes your name and residential address, including bank statements, municipal rates, as long as they are not older than three months, or insurance policies, lease or rental agreements and TV or vehicle licences.

But there’s a loophole as wide as a cellular base station: to quote The Times quoting the Minister of Justice, “those in an informal residence should provide the address of a school or church closest to the area in which they live” The latter loophole also includes retail stores.

If I were a bona fide, fake card carrying criminal, instead of the accidental variety, I would thank the Minister on bended knees. Now I can just take my fake ID into a retail store, and give that very store I am in as my address!

Of course, the loophole is essential to keep those without formal housing linked in to the communications network, but it means that anyone who plans to commit a crime using a cellphone can and will simply pretend to be living “informally”.

It means that, as with gun laws, the innocent are closely monitored and tightly policed, while those of criminal intent remain outside the reach of the law.

Penalties

The purpose of the law is noble, as often is the case with well-intentioned legislation that falls apart under the burden of reality: It enables authorities to intercept cellular communication in order to track criminals more effectively.

But the absurd penalties it suggests for those who fall foul of the law suggest that it is a big stick with which the authorities want to beat everyone into line. Here is the stick:

Anyone who “sells or in any other manner provides, any cellular phone or SIM-card to any other person” and fails to get that person’s full names, identity number and address and a photocopy of their ID; is guilty of a crime.

Anyone whose “cellular phone or SIM-card is lost stolen or destroyed”, or “any other person who was in possession or had control thereof when it was so lost stolen or destroyed” and who does not “within a reasonable time after having reasonably become aware of the loss, theft or destruction of the cellular phone or SIM-card, report such loss theft or destruction in person or through a person authorised thereto by him or her to a police official at any police station”; is guilty of a crime.

In both cases, the criminal is liable to a fine not exceeding R2 000 000 or to imprisonment for a period not exceeding 10 years. Thank goodness there is a cap on the sentences.

But wait, there’s more. You face the same penalty if you are one of those scoundrels who “intentionally and unlawfully, in any manner modifies, tampers with. alters, reconfigures or interferes with, any telecommunication equipment, including a cellular phone and a SIM-card, or any part thereof”; or if you are one of those low-lifes who “reverse engineers, decompiles, disassembles or interferes with, the software installed on any telecommunication equipment, including cellular phone and a SIM-card, by the manufacturer thereof; or allows any other person to perform any of the acts referred to”.

The wireless application service provider (WASP) industry, which exists to tamper with equipment and come up with intelligent new solutions as a result, is no doubt consulting its attorneys as we speak. Ordinary individuals, though, who indulge in thuggish behaviour like giving an old phone to a friend or in the vandalism of mutilating a SIM card will probably have to appeal to the Constitutional Court. Should the letter of the law be applied, that is no doubt exactly where these provisions will arrive for deliberation.

Registration

Aside from such provisions undermining the credibility of the law, there are also practical concerns with the registration of all existing SIM cards.

First, there is the obvious initial registration barrier: There are a total of about 42-44 million pre-paid SIM cards in use in South Africa, and all of these have to be registered. It’s unlikely the cellular networks have the physical resources to achieve that in the next 18 months, if ever. The nature of pre-paid also means that it is highly unfeasible that users will be able to comply with Rica requirements. After all, these are not the equivalent of access to a bank account; they are the equivalent of access to a call box.

Former Vodacom CEO Alan Knott-Craig told Brainstorm magazine in 2006 that millions of South Africans who use prepaid cellphones work in the informal sector and many live in far-flung rural areas.

“They are completely dependent on their prepaid cellphones to find work and to remain in contact with their families. Depriving them of the ability to communicate via cellular telephony is to once more condemn them to the world of the ‘absolutely have-nots`,” he said.

“It is highly unlikely that the registration of prepaid cellphone customers will bring down the crime rate as it is easy for criminals to get a SIM card from a neighbouring country, commit the crime and throw away the phone, without ever registering it. Although crime needs to be fought with all our might, this proposal needs more careful thought in terms of its unintended consequences before becoming law.”

Such comments did result in the Act being amended, but more in order to reduce the burden on networks than on consumers. As it is, Vodacom was an accomplice in the process of activating my new, illegal phone number. Eighteen months from now, if I haven’t confessed to my crime and handed over all the evidence of my existence, the number will be deactivated.

Stretching the Law

But in the meantime, there is the law enforcement issue. The major problem with RICA requirements is that they do not take into account the sheer immensity of the registration task, and do not allow for a broad scale of penalties that are commensurate with the “crime”, as is the case, for example, with traffic offences. This means that failure to report the loss of a 99c SIM card is regarded by the law as almost as severe a crime as failure to report the loss of a firearm. It requires almost the same level of paperwork, and therefore manpower, as the loss of a firearm.

If by some chance we do have all users registering their SIM cards and giving full details every time they get a new SIM card, it will be an absurd waste of the already-stretched resources of the SA Police Services to require admin staff to handle every lost SIM card. The truth is, many pre-paid users simply buy a new starter pack for 99c when their existing airtime runs out, as they often get a better deal on a new starter pack than on recharging an existing one. They can hardly be expected to keep track of every SIM card they ever own and, should they lose or destroy one, they can simply claim they did not know they had lost it.

A privacy affair

Then there are the privacy concerns.

Consumers have every right to be concerned, as not enough effort has been made so far to educate the public, resulting in confusion and uncertainty. The Act allows a wide range of law enforcement agents, under a wide range of circumstances, to access archived information about calls as well as to listen in on calls. Mostly, this requires an application to a judge. But the fine print suggests that, where law enforcement officers believe they need that access urgently to prevent bodily harm, they can bypass the usual process.

To quote, where “it is not reasonably practicable to make an application in terms of section 16(1) or 13jl) for the issuing of an interception direction or an oral interception direction; and the sole purpose of the interception is to prevent such bodily harm, any communication or may orally request a telecommunication service provider to route duplicate signals of indirect communications specified in that request to the interception centre designated therein.”

The interception is only justified where it is intended to prevent bodily harm, and the Government has assured the public it won’t abuse the provisions, but not enough has been done to communicate the purpose, the process and the circumstances to the public.

The law in itself protects privacy, and does indicate penalties for unwarranted violation of privacy – R5-million good enough for you? – but no process for grievances regarding violation of privacy.

All in all, the focus of a positive law designed to stop criminals has focused so heavily on regulating formerly law-abiding citizens, that it has already created huge misconceptions about the intentions of the law.

Clearly, the test case that criminalises an individual merely for losing or passing on a SIM card will also be the test case that makes an ass of this law.

(Acknowledgement: This column could not have been written without the inspiration of Toby Shapshak, the original Skype Criminal)

Any fan of South African dream football team Kaizer Chiefs will know the feeling: they start off every season with immense hope and promise, and their fans have every expectation they will end the season as champions, or at least with enough silverware in the trophy cabinet to have pleased most of the fans most of the time. By the end of a season littered with disappointment – the one just ended this weekend being a case in point – the fans realise that promise and hope means nothing without results and delivery. Even more ignominiously, it comes a few weeks after the team had been bundled out of a knock-out tournament by a lower-league side.

Siphiwe Nyanda. Pic: Mail & Guardian

So it is with the Department of Communications. Every time we begin a new season, i.e. have a new team in charge appointed by the President, we live in hope that, this time, we will all end up winners. By the end of the season, in which a startling lack of results and very little delivery has left us jaded, cynical and sad, we realise that we have fallen for false promises once again. It is left to the minnows of private enterprise to take on the Department – and beat it, as happened in the courtrooms with regard to licensing – in order for us to see progress.




Ironically, Kaizer Chiefs ended their league season in 3rd place on the very weekend that a new Minister and Deputy Minister of Communications were appointed. Equally ironically, the new Minister of Communications started his working life as a sports reporter. At a risk of stretching the metaphor, the question must be asked whether the new communications regime has a winning instinct, or whether it is just making place for passengers who are being rewarded for long service. Football fans will be painfully aware of the devastating impact such complacency can have on performance.

Starting on a positive note, the new deputy minister, Dina Pule, has a reputation for her no-nonsense approach and her intolerance of mismanagement. She was formerly an MEC in the Mpumalanga provincial government, both for Agriculture and Land Administration and for Safety and Security. By all accounts, she took a practical approach to her roles, and was an effective executive. She was strong on both poverty alleviation and environmental awareness.

She was appointed to the National Working Committee of the ANCE after Jacob Zuma’s triumph in elections for the ANC presidency at Polokwane in December 2007. The Mail & Guardian described her as “a grass-roots activist and former government spin-doctor,” but added that, as “a left-leaning activist, she has been fearless in her criticism of mismanagement and corruption”.

This can only bode well for a more active approach towards the decision-making processes in both the Department and in the regulator, Icasa. The latter, in particular, has dragged is heels on the politically sensitive issue of interconnect charges, which add about R1.25 to the cost of up to half of the cellular phone calls made in South Africa. If the Government wants to underline its pro-poor credentials, there is no better place to start than in slashing the interconnect by a Rand. No other decision can make as much of an impact, as quickly, on the cost-burden of the poor. Because the previous Minister was committed to the concept of managed liberalisation, which in practise required very slow change, this issue was never given priority. A Dina Pule could be just what the country needs in that context.

However, the fact that neither the new minister nor deputy minister has any track record of engagement with the ICT sector in any form indicates that the Department of Communications is once more the beneficiary of a President’s need to find positions for his supporters, rather than finding the right person for the positions. This means a long learning curve, and little action in the short term. It does not necessarily reflect on management, decision-making or policy-making ability, since good advisors could always provide the support structure needed in that regard.

General Siphiwe Nyanda, the new Minister of Communications, brings with him a long track record of military command and coordination in both underground, pre-democracy, and formal, post-apartheid leadership. However, he retired as head of the SA National Defence Force in 2005, and has since been better known as a lobbyist for Jacob Zuma – hence the reward. But would one of the military or security portfolios not have been more appropriate?

That said, He would be the ideal person to lead a national infrastructure roll-out – along with the action required to make that infrastructure meaningful to then population. However, given the glaring absence of any connection with the ICT sector, observers can be forgiven for expecting another passenger appointment, rewarded for past good deeds rather than in the expectation of future delivery.

Promise would lie in the vision he expressed for his role as Chief of the SANDF when he was appointed in 1998. His mission statement, as announced by the ANC on his retirement, had included this line: “The SANDF will become a learning organisation practising continuous improvement in partnership with the nation… the time has come for the SANDF to benchmark against the best.” Replace SANDF with DoC, and you would have a recipe for success.

The danger does exist, however, that we may have a Department that takes its lead from cabinet, rather than showing cabinet the lead, as was the case with the previous communications regime. The activist and ‘Zuma-camp’ credentials of the new incumbents indicates a left-oriented approach that probably means that there will not be an aggressive drive towards the further liberalisation of telecommunications.

There are bright spots in the Cabinet: the new Minister of Trade and Industry, Rob Davies, formerly deputy minister in the dti, is a fierce proponent of a stronger role by the Competition Commission (see his most recent speech on the topic). Deputy Minister of Science and Technology Derek Hanekom is both wise and pragmatic in that role. As Minister of Land Affairs in the Mandela cabinet and Deputy Minister of Science and Technology since 2004, he has been an effective policymaker and bridge-builder. cooperation with these related ministries would be no bad thing for the DoC.

World Wide Worx has expressed the requirement for the Zuma presidency to treat telecommunications as a national priority by appointing a Minister who will champion the cause of ICT, rather than be a reflection of vested interests. The appointment of General Nyanda does not meet this criterion. The campaign for a National Broadband Strategy, to take one issue, may not fall on deaf ears, but is unlikely to be met with great enthusiasm by this Ministry. In many Government circles, broadband is viewed as the province of the privileged rather than the force for economic advancement that it has been in many countries. And, while lip service has been paid to the importance of ICT, this importance was never given effect by the Mbeki casbinet. Given the credentials of the new leadership, there is little to indicate, so far, that this perspective will change dramatically.

Instead, as we saw with the previous Ministry, it is likely that state involvement in telecommunications will continue to be championed as a means of holding off liberalisation rather than of promoting it. Nevertheless, the momentum of growing competition is such that the sector will thrive despite the Department of Communications, rather than because of the Department.

This is the key finding of the Internet Access in South Africa 2008 study, released today by World Wide Worx. The study was backed by Cisco Systems, and the findings released during the Networkers at Cisco Live! conference in Johannesburg.

“The increase comes on the eve of the biggest shakeup in South African Internet access we’ve seen since the dawn of the commercial Internet in 1994,” says Arthur Goldstuck, MD of World Wide Worx. “It is only the beginning of a dramatic turnaround, and is occurring despite numerous obstacles in the way of growth.”

Among these obstacles has been a highly restrictive regulatory environment, with the Minister of Communications only deciding late in the year not to oppose a court ruling that would allow all network operators to supply their own infrastructure.

The evolution and changes in the telecommunications industry could not have come at a better time in South Africa. “We believe these changes will lead to sufficient levels of competition, increase access to Internet usage and in turn, increase global competitiveness and economic diversity,” says Reshaad Ahmed, Senior Manager of Cisco’s Internet Business Solutions Group.

“South Africa could, potentially, go from five major service providers to more than 300 overnight,” says Ahmed. “The combination of new licencees, policy directions, and municipality networks has set the stage for a highly competitive telecommunications marketplace, with consumers and businesses leading the charge toward choice, competition, and fair market value.”

Goldstuck describes the Minister’s decision as a pivotal moment, but one that should have occurred four years ago.

“In that time we saw growth slow to a near standstill, and the possibility of bringing access to underserviced area becoming ever more remote,” adds Goldstuck. “But the market has been anticipating this change, and numerous small, semi-legal networks have sprung up around the country in the past year. Many of these should emerge above the radar with their new licenses, along with new entrants into the market.”

The Internet Access in SA 2008 report shows that growth has come largely on the back of dramatic take-up of broadband offerings by small businesses, which alone accounted for half of the growth in the market, mainly through connecting office staff to their ADSL links. At the same time, the market as a whole has seen a continued dramatic shift from dial-up connections to broadband, with growth in both ADSL and 3G at more than 50%.

“We are seeing a broadband culture emerging in South Africa, held back only by the restrictions still placed on data capacity,” says Goldstuck. “These should start becoming a non-issue from the middle of 2009, as the first of the major new undersea cables enters operation. At that point, dial-up will effectively be dead as a connectivity option – it is more expensive, and utterly inappropriate to the changing nature of the Internet.

“Once everyone who is connected is on broadband or high-speed networks, the Internet will come into its own as an environment for business collaboration and personal interaction.”

The Seacom undersea cable, commissioned mainly by new market entrant Neotel, will increase South Africa’s international bandwidth 40-fold, and will mark the beginning of what World Wide Worx describes as a seismic shift in the Internet landscape in Africa. But it is only one of a series of new cables in the works, which will make the connectivity landscape completely unrecognisable for both South Africa and the rest of the continent by 2013.

“It spells the birth of an entirely new industry, and we are already seeing the market champing at the bit to become part of that industry,” says Goldstuck.

However, Cisco warns change won’t happen overnight.

“Only some of the 300-plus contenders will be in a position to manage their own net¬works due to their ability to raise the necessary capital,” cautions Ahmed. “Those that do step up to the challenge must spend a significant amount of time building a business model that will be sustainable, innovative, and takes advantage of the strategic position with which a contender is faced, while employing the capabilities of existing service providers.

“We are therefore pleased with these findings as they indicate a positive trend for economic growth. We believe that pervasive broadband at the right price is a key enabler for economic prosperity.”

“It is imperative for all relevant stakeholders to drive broadband to encourage new services: skills, education, business interaction and lowering the cost of doing business,” Ahmed concludes

For more information, please contact:

Arthur Goldstuck
MD, World Wide Worx
Tel: +27 83 3264345
Office: +27 11 7827003
E-mail: arthur@worldwideworx.com

Zweli Mnisi
PR Manager: Cisco South Africa
Cell: +27 83 616 6175
Email: zmnisi@cisco.com

The concept of NOHO – Small Office Home Office is introduced in a new book released today, “The Mobile Office”, by Arthur Goldstuck, technology writer and editor of The Big Change. The book is sub-titled “The essential small business guide to office technology”, and goes beyond the technology to explain how the modern office for both the small business and the travelling executive has changed more radically in the past ten years than in the previous hundred years.

“It’s not just the Internet, not merely the plunging prices of laptop computers, not only the arrival of cellphone banking and mobile e-mail,” says Goldstuck, who heads up the World Wide Worx technology market research organisation.




“It’s about an entire ecosystem that is beginning to support the business person out of the office. Only five years ago, anyone wanting to be untethered from the physical office but remain productive and in touch, faced almost insurmountable obstacles. Now a happy conspiracy of telecommunications providers, device manufacturers, hospitality establishments, and travel services have made it an everyday reality.”

Despite this, however, the practical aspects of abandoning the office while maintaining an office – the key to NOHO – remain complex and confusing for the average person who wants or needs this approach but has no idea where to start or how to choose from the bewildering array of options.

“For example,” says Goldstuck, “one of my favourite and most useful gadgets is a small, portable charger that fits in the palm of the hand and holds just enough power to recharge my cellphone once. It doesn’t seem like much, yet has rescued me countless times while out of the office. And whenever someone sees me using it, they want to know where they can get one – they just didn’t realise it was an option.”

The book guides users through choosing the right computer, deciding what accessories go with it, choosing the most appropriate software, how cellphone banking works with each of the major banks, and a detailed unravelling of Internet connectivity options for business users ranging from solo players to executives. It also delves into the price structure of all the major connectivity options.

World Wide Worx’s annual Mobility research project, which inspired the book, was sponsored by FNB, but the book takes a neutral approach to cellphone banking, apart from one FNB initiative that no other bank yet offers: Cellphone Banking for Businesses with Dual Authorisation.
Goldstuck says that FNB has shown its commitment to research on Cellphone Banking through its sponsorship of the Mobility Research.

FNB Mobile and Transaction Solutions CEO, Len Pienaar, says FNB has been sponsoring the Mobility research project for the past three years and are proud to be the only financial institution to support this initiative.

“The growth of mobile commerce in SA will change the face of business. Business as we know it will continue to evolve with the developments in mobile technology; Cellphone Banking for Businesses will help revolutionise the way business interact with the bank, saving the customer money and adding convenience to their business. Businesses will operate in a seamless fashion where deals and processes can be made in an instant,” concludes Pienaar.

“Ultimately The Mobile Office is a decision-making tool,” says Goldstuck. “It is aimed at helping mobile business people decide what they need, when they need it, how much they will pay for it, and generally taking control of their mobile lives.”

• The book, subtitled “The Essential Small Business Guide to Office Technology”, is published by Double Storey and is an easy read at 88 pages. It will be available at the end of November at a cost of around R80 in the following bookstore chains and outlets: Exclusive Books, PNA, Estoril, Wordsworth, Adams, and Fogarty’s. For other stores, please ask them to order it from the publisher.