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Safaricom has lost the battle for the control of mobile money transfer after regulators allowed Equity Bank to roll out similar services using thin SIM card technology.

The approval, officially announced yesterday, was granted by both Communication Authority of Kenya and Central Bank of Kenya.

The two dismissed Safaricom’s objections on the new card – which will ride on existing SIM cards – saying that initial investigations showed “that no major complaints and particularly on interception of traffic of the primary SIM card
have been reported so far.”

However, to address the concern raised in totality, the roll out is to be done on a one-year pilot basis to give the two regulators a chance to carry out a detailed study on the
technology.

Encourage prudent behaviour CA board chairman Ngene Gituku and CBK Governor
Njuguna Ndung’u told the Press yesterday that the first phase would run for a year.

“We had a board meeting Friday and agreed that Equity Bank will roll out on a pilot basis. If vulnerabilities are found within the period, its services will be cut,” Mr Gituku said.

Equity Bank will roll out the service under Finserve Kenya, one of its subsidiaries.
Prof Ndung’u said Central Bank wanted to understand the system before giving the full go-ahead.

“We do this to encourage prudent behaviour within the market and not to shut it from innovations,” he said.

SAFETY CONCERNS

In its objection to the roll out, Safaricom raised safety concern of the card, saying it could compromise the security of its 19 million money transfer service customers.

“Based on the opinion of GSMA, save for the inherent vulnerabilities of all SIM cards, there are no specific and confirmed vulnerabilities arising from the use of the thin SIM,” Mr Gituku said.

Over the pilot period only Taisys’ thin SIM card, proposed by Equity Bank, will be in operation.

“Regulators decided to allow only Taisys to roll out in Kenya under a pilot basis. This will help give us in-depth analysis into the technology without exposing the market to many risks,” CA director general Francis Wangusi said.

According to Mr Gituku, the CA board made the decision after elaborate consultations that ascertained the technology complied with all minimum mandatory international thin SIM
card standards, noting that no major complaints on the technology on interception of traffic of the primary card had
been reported.

In a statement released later on Monday Safaricom welcomed the decision, saying they were happy with the commitment to review security on the thin SIM card and publish guidelines to protect consumers and industry players.

“We are further encouraged by the CA’s commitment that in the event of any vulnerability during the testing period, it will
take steps to suspend the use of the SIM overlay in the Kenyan market,” Safaricom’s director of corporate affairs Nzioka Waita said.

CA said China National Computer Quality Supervising Test Centre and Bank Card Test Centre of China showed that Taisys SIM complies with International Organisation for
Standardisation (ISO) and European Telecommunications Standards Institute (ETSI) standards.

The new thin SIM card technology has been the subject of a vicious battle between Equity and market leader Safaricom.

The parliamentary Energy and Communications Committee, chaired by Mr Jamleck Kamau, early this month ordered CA
to seek the board’s approval after announcing that Equity could roll out the technology.

“This project should not continue until the board has made its decision,” Mr Kamau said before the committee.

Reacting to this new development which challenges its popular MPESA Mobile money transfer business,Safaricom said it will leave the decision on whether to use the new thin SIM card to be launched by Equity Bank to consumers.

Speaking on Tuesday during a partnership signing ceremony with Seven Seas Technology, Safaricom Chief Executive Bob Collymore said the mobile phone services company would respect the regulator’s decision but warned
users of inherent danger of using the new technology.

“Customers are exposed to major risks when using the technology; We will review our legal commitments with them to absolve us of eventualities of fraud,” explained Mr
Collymore.

Safaricom is also questioning why the Competition Authority of Kenya allowed the roll out before conducting an independent assessment of the technology.

OUR MAIN CONCERN

“Our main concern is that the thin SIM takes information from the parent SIM and decides who uses it,” he said.

Equity was on Monday allowed to roll out mobile and money transfer service using the thin SIM card technology, but on a one-year pilot basis.

Safaricom partnership with Seven Seas Technology will enable the telecom giant to target major county and national government tenders on health, agriculture and education
sector.

Seven Seas Technology Chief Executive Mike Macharia said Safaricom would provide infrastructure and capital commitment while his firm would provide skills to operate
county projects.

“Our first major project will be rolled out before December;It will provide an array of solutions targeting different counties,” said Mr Collymore

“The African Story as told by Africans”.©African News Digest®

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