Thin SIM by Equity is likely to end up as mobile number portability – dead!

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  • 5 years ago
  • Posted: October 6, 2014 at 8:04 pm

You are bound to notice an expression of joy whenever you mention thin sim technology to an average Kenyan who is expecting Equity Bank, via it’s virtual mobile operator company Finserve, to launch Equitel, a mobile service provision that many hope will finally unsettle Safaricom from the market’s domineering position.

The feeling of joy is an indication that people are tired of Safaricom’s dominance – and Safaricom is not doing anything worthwhile to water down the discomfort customers continue to express in regards to their over priced services. The other market players like Orange and Airtel also seem to lack strategies to shake Safaricom a little bit so that Safaricom can rethink of its pricing in voice, data, and mobile money.

The only guy who has managed to send shivers through Safaricom’s shoulders is Equity Bank’s interest in telecommunication and mobile money spaces.  The 1% mobile money transfer rate and the upper limit of shs 25 has already forced Safaricom to lie to customers that it decreased the M-PESA rates when what it actually did is to increase the rates by 27% so that it can reap the maximum possible before Equity rolls out the thin sim technology.

Read: M-Pesa Rates: an increase or decrease?

But lowering the cost of sending money does not guarantee Equity Bank a remarkable share of the mobile money market. Airtel, Orange and Yu have tried this approach and failed, even though they lowered the transference charges to zero shillings. Other approaches to gain share of the telecos and mobile market share might not succeed as well. Check the article Don’t be excited yet, Equity Bank might not pull the mobile money business for details.

To leverage these hurdles, Equity Bank thought it is wise to consider a new technology that would help it make  a grand entrance in the mobile money market; the adoption of thin sim technology. The news that Equity Bank is planning to use a new sim technology to penetrate both the teleco and mobile money markets got everyone excited, scaring Safaricom in the process.

The reason why everyone couldn’t hide their happiness is because the thin sim by Equity will not require current mobile service subscribers to abandon their existing sim cards and numbers, but rather overlay the Equity’s thin SIM on top of the existing sim, insert the two SIMs into the phone as if it were one sim card, and be able to use one sim card at a time in the same phone; and this way transform the mobile phone into a dual sim card phone. Existing subscribers won’t be required to port, discard existing sim cards and numbers or even buy new handsets. Cool, right? Not just yet.

Phones operating thin sim by Equity won’t equal duo phones in functionality

The ability to use two sim cards in one phone makes the phone be called duo phone e.g. Samsung Galaxy S Duo etc. When therefore Equity Bank talks of introducing a thin sim card that will be able to work together with the current users’ sim cards in the same handset, it is easy to think that the mobile phone user shall have a duo like phone.

But there is one main characteristic of duo phones that distinguish them from single sim phones. Duo phones are able to receive two network signals simultaneously without switching the other network off. If you have a duo phone in which you have one sim slot with Safaricom’s sim card and the other sim slot with Orange’s sim card, then both lines are able to receive text messages, phone calls or even data simultaneously. If anyone calls either of the numbers at any given moment that both sims are active in the phones, you’ll be reachable.

If you operate two sims with a single sim card slot, then you will be required to keep one sim card in your wallet to insert it in the phone when its use is needed; and in the process of switching you’ll have to put the other sim card off – ideally there will be no way of the two sim cards being online simultaneously.

The inability for a single sim phone to provide simultaneous online service for two sim cards together with the tedious procedure of having to remove the phone’s back cover, then the battery, then the sim card in use, then insert the second sim card, return the battery then the phone’s back cover in that order are the reasons for most Kenyans with a single sim phone possessing only one sim card.

It is in the inability for two sim cards to be online simultaneously that would classify a phone operating both the standard sim card and thin sim by Equity as a single sim phone and not a duo phone. This has been made clear by Equity Bank’s CEO in interviews when he is asked about Safaricom’s concerns of original sim card security challenges if overlaid with the thin sim. According to Equity Bank, the thin sim can only be online when  the main sim is in offline mode, and vice versa.

This fact will thus not entice anyone into buying the thin sim card. For example if your original sim card is Safaricom and you buy or receive the thin sim by Equity, put the Equitel’s sim card in the online mode, and Jane wants to talk to you on Safaricom, it will mean Jane won’t be able to reach you on Safaricom as your Safaricom line shall have been offline at that particular time. The fear then that you shall have missed an important phone call is still as real as operating a single sim phone that requires you to remove and insert sim cards.

The death of mobile number portability and where Equity’s thin sim is headed

A number of steps have been taken to ensure that the country’s mobile telephony industry has an even playground. These include the recent opening of M-PESA agents to all players, the introduction of duo sim cards in droves ever since Kenyans tried to transform single sim phones into twin sim phones in 2007 and earlier, lowering of call termination rates by CA (formerly CCK), the request that Safaricom should license its M-PESA to the rivals (a request that Safaricom had agreed to – see M-PESA monopoly coming to mobile cash), the price wars that was started by Airtel but later none but Safaricom won; see – Airtel Kenya missed the point with price wars, the number portability projectand now the thin sim battlle.

Price wars and number portability failed to level the playground whereas utilization of the opened M-PESA agents is yet to be taken advantage of. The death of mobile number portability is what is of interest. According to this article by HumanIPO written in October 2012, Mobile number portability in Kenya  was already a failed project by that time. The article states:

The report states that there have been close to 48,000 MNPs carried out since the launch of the service, with about 680 imports recorded for the second quarter of 2012, the lowest ever recorded figure, and a decline of 89.9 percent of an estimated 6,650 imports recorded during the previous quarter.

HumanIPO also reported that Safaricom played a role in ensuring that the number portability does not succeed.

Since its launch, mobile operators have traded counter accusations, accusing each other of hampering the smooth migration of customers from one network to another. Airtel has accused Safaricom of sabotaging MNP.

Some customers also went to court accusing Safaricom of the same, and wanted to be paid for damages for loss of business and an order directing Safaricom to activate their ported numbers without hindrance.

Keep the above quote in mind.

In October to December 2013, only 276 Kenyans ported from one network to the other, and by January to March 2014, the number slightly increased to 362 Kenyans. In an industry that has over 30 million active customers, a service being taken by only 300 customers per quarter is a dead service; as that figure represents only 0.001% of subscribers. In most cases, below 1% of any large number is a negligible number and below 0.1% is a figure that can be assumed not to exist.

Why has number portability died?

Other than the accusation that Safaricom did all it could to deter number portability from succeeding, the portability in itself was bound to fail. Firstly, the process of porting from one network to the other is very tedious. Secondly, the few people who managed to port from Safaricom to the other networks went back to Safaricom after missing out on the excellent customer care services by Safaricom, availability of Safaricom’s network across the country, and M-PESA. Lastly, it might be true that Safaricom did all it could to hamper the portability project as it is the company, and still is, that had a lot to lose if the project was successful.

These factors are also challenges facing thin sim by Equity Bank. Equity Bank will rely on infrastructures set up by Airtel; which apparently is not as widespread as Safaricom’s. It is also important to remember that most of the people who ported from Safaricom landed in Airtel thus whatever drove them away from Airtel is likely to drive them away from Equitel, especially if it was an infrastructural/network issue.

Equity’s customer care is not very bad; but the capacity they currently have can hardly solve the millions of problems their bank customers face daily. Given that most people are likely to uptake the thin sim cards within the first few weeks of launch, the network capacity that Airtel has allocated them is likely to be congested within the first few days. This congestion and other technical problems the first millions of customers are likely to face given that the thin sim technology is a new concept, will mean an overwhelmed customer care that will lead to millions of dissatisfied customers.

The millions of customers who will take up the thin sims will also not receive frequent calls from their friends on Safaricom mostly because their Safaricom lines will be off and secondly because the Safaricom customers will not want to spend the extra shilling in calling an off-net network.

Finally, if it is true that Safaricom sabotaged mobile number portability, what makes you think they won’t sabotage thin sim technology? We all know they have already tried that using “legal means”.

Conclusion

The fact that the thin sim cards will put the original sim cards in off mode, that there will be a likely network congestion in Equitel within the first few days of rolling out the service, that Finserve will likely be caught unprepared to handle the myriads of complains from dissatisfied customers due to network congestion and technical problems of new technology, that most Equitel customers will miss receiving calls from their Safaricom friends, and a distant possibility that Safaricom is likely to sabotage the technology, all point to the possibility that thin sim approach is a dead end for Equity Bank.

What is your opinion on the topic?
Odipo Riaga
Managing Editor at KachTech Analytics Ltd
Film Director, Tech and Business Blogger, Chess Player, and Photographer. God is Science.
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