Implications of Mandatory Registration of Mobile Phone Users in Africa

Abstract

Sub-Saharan Africa ranks among the top regions in terms of growth in the number of mobile phone users. The success of mobile telephony is attributed to the opening of markets for private players and lenient regulatory policy. However, markets may be increasingly saturated and new regulations introduced across Africa could also have a negative impact on future growth. Since 2006, the majority of countries in the region have introduced mandatory registration of users of prepaid SIM cards with their personal identity details. This potentially increases the costs of using mobile telephony. Herein a fixed effects model for the estimation of the impact of mandatory registration on mobile subscription penetration growth is presented, which is based upon a panel dataset of 32 countries in Sub-Saharan Africa for the years 2000 to 2010. The results show that the introduction of mandatory registration depresses growth in mobile penetration. Further, the potential impact of mandatory registration on competition and consumer privacy is critically discussed.