0 Theme: Consumer protection Author: June 23, 2015

Be careful to not wipe out the prepaid !

In the last few weeks, there has been talk of a preliminary draft law/preliminary draft royal decree compelling mobile telecommunications operators to identify prepaid card users with their names, addresses etc. This is an old issue that has already been voiced in the past. If this measure were introduced, it would affect both major operators with their own networks and virtual operators working on a third-party network, such as Mobile Vikings, Carrefour, Aldi, ORTEL, etc.

As one of the largest suppliers of prepaid cards – either directly via the BASE brand or indirectly via partners such as ORTEL – BASE Company is extremely concerned by this change in legislation. It could have a considerable effect on consumers, and also on small independent distributors and MVNOs operating in the prepaid card segment only.

This decision would ultimately challenge the entire prepaid business model, and would also have considerable indirect consequences for operators and their customers.

An enormous impact with limited results

Nowadays, 50 % of BASE’s prepaid card sales are made at BASE Shops. The other half are made via what are known as indirect channels: Internet, independent dealers, supermarkets, petrol stations, etc. More than 10,000 sales outlets in Belgium, with which we operate different kinds of partnerships… and which do not currently have the technical means to guarantee the proper identification of those buying prepaid SIM cards. They would be directly affected and jeopardised by compulsory registration.

In practice, all customers undertaking to purchase a prepaid card are systematically offered the possibility of registering (on a form at BASE shops, or by means of a phone call when they have made the purchase through a distributor or on the Internet). 51 % of BASE Company’s prepaid customers have been identified at the present time.

We understand the concerns of the political and judiciary world following the latest terrorist attacks to be in a position to identify those behind prepaid cards. However, we have many queries as to the relevance and proportionality of such a radical measure.

Compelling operators to register and identify their customers as a means of combating crime or terrorism is not only disproportionate, but among other concerns it would not achieve the objectives sought. To quote Alain Grignard, a Federal Police counter-terrorism expert, who relativised this intention: ” This could help the police in the case of petty criminals. The bigger fish, however, always find a way to get their hands on an anonymous SIM card”. Terrorists have many channels of communication, much more effective than anonymous prepaid cards. Facebook Messenger/Whatsapp/Skype/Open Wi-Fi/etc.: these channels are encrypted, meaning that neither the operators nor the judicial authorities can control them. These are, therefore, potentially criminogenic areas.

And what about the accuracy of the information gathered?

Registering the data of our customers (present and future) is one thing. Guaranteeing veracity when a SIM card is purchased and over time is quite another. Either we have the means to guarantee veracity, for example through access to the national register, with all the risks this entails in terms of respect for privacy, or we do not, in a bid to respect customers’ privacy, but in this case how can we guarantee the accuracy of the data received?

Exclusions from access to mobile telecommunications for the most marginalised sectors 

Consumers taking up a non-registered prepaid SIM card all have their reasons for doing so. One of the main reasons is that they want to retain full control of their telecommunications budget, but also their situation alongside society, like undocumented immigrants. For those who wish to continue to communicate, and they must communicate in order to live, a parallel market will certainly be created as a necessarily criminal activity. Is the aim of this and political wish, through compulsory registration of prepaid SIM cards, to prevent all these people from communicating for their vital day-to-day needs: families, schools, doctors, jobs etc.? Is the aim of this and political wish, through compulsory registration of prepaid SIM cards, to create new, grey, gangrenous zones that these people would have no choice but to enter, to continue to communicate at higher roaming rates when they buy foreign prepaid cards?

Unsuccessful experiences in other countries

In at least two countries, Australia and Switzerland, the authorities attempted to force prepaid card users to identify themselves. This led to total chaos on the market in Switzerland, while in Australia, the obligation comprehensively demonstrated its limitations in terms of genuine lasting identification of users within a very short space of time. Mexico imposed the obligation in 2009, before withdrawing it three years later in the absence of any tangible results. A GSMA survey analysing the situation worldwide pointed out the weaknesses, the heavy technical and administrative burden, ineffectiveness in terms of fighting crime, and the disastrous consequences of compulsory registration. Before imposing such an obligation in Belgium, the authorities would be wise to take a look at foreign experiences.

BASE Company urges the Government to consider all the parameters and problems this would cause to consumers either directly or indirectly and, on the basis of this analysis, to take the most proportional and reasonable decision possible in connection with its desired aims.

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