Equity gets nod to launch services on thin sim for one-year trial stint

The Communications Authority of Kenya has given Equity Bank the green light to roll out telecommunication services using a new SIM card technology that has been the subject of a vicious fight between the bank and market leader, Safaricom.

The authority’s director-general, Mr Francis Wangusi, said the authority would allow Equity Bank to deploy its service on the thin SIM technology for one-year trial period, after which a concrete decision would be made.

“During the testing period, if we discover any vulnerability, they will stop,” Mr Wangusi said on Tuesday.

He was appearing before the House committee on Energy, Information and Communication.

ASSUAGE FEARS

The one-year trial period will involve an audit of how secure the technology is, which would assuage fears expressed by Safaricom Limited that the technology could compromise the security of its 19 million M-Pesa customers.

Mr Wangusi, however, said Safaricom’s fears were needless as the technology is already in use in other parts of the world.

“We have to rely on international standards because, you know, none of these phones and technology we use is made in Kenya. If international standard testing agencies have found that they comply, who are we to deny them?” Mr Wangusi told journalists after the meeting.

Equity plans to launch its telecom services through subsidiary Finserve, which was in May given a Mobile Virtue Network Operator licence.

Mr Wangusi was emphatic that the final decision lay with the authority’s board, which would hear from the technical staff on how the technology works and how safe it is before deciding whether to approve it or not.

The meeting with the committee chaired by Mr Jamleck Kamau ended prematurely after the authority’s chairman, Mr Ben Gituku, told the MPs that the board was yet to authorise the roll-out of the service.

“Our understanding was that this matter was still in the technical stages,” Mr Gituku said.

Surprised that Mr Wangusi had not asked the board to approve the roll-out, MPs suggested there was mischief and asked him to seek the board’s approval first before getting back to them.

A GRAVE MATTER

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

MPs James Rege (Karachuonyo, ODM) and Onesmus Njuki (Chuka Igambang’ombe, TNA) said the gains made by Safaricom and Airtel in the mobile money transfer development would be undercut by Equity.

“We’re dealing with a grave matter here of corporate governance. This committee is not subordinate to the board or the CAK and you cannot treat us as a technical research arm of the CAK,” Moses Kuria (Gatundu South, TNA) said.

Mr Kamau said the committee would organise a joint meeting with the governor of the Central Bank, Mr Wangusi, Mr Gituku and the chairman of the CBK board.

Mr Wangusi said the CAK board was going to be informed about the technical views on use of the thin SIM later this month. He was critical of the committee’s “rush to meet CAK”.

“We’re also harassed by the MPs. You ask them. We are an independent authority. How can they ask us to come and explain something we haven’t finished doing?” he told journalists.

Equity’s decision to deploy services using the thin SIM has become the subject of a protracted debate across the telecommunication industry. CAK’s preliminary announcement that they can use it for a one-year trial period is bound to give them some relief.

The card is paper-thin and carries an embedded chip. Users overlay it on their primary SIM, regardless of their network, and can then use services from two providers almost simultaneously.
Mr Wangusi said that just like dual-SIM phones in the market, it would not be possible to use both lines at once.