Lunga Siyo, CEO of Telkom’s consumer business unit that houses the group’s mobile operations, said a legislative overhaul is needed to fix problems with the Rica process and help curb fraudulent Sim registrations and the crimes they enable.
At the same time, he has warned that the decision by the department of home affairs to hike the fees levied on telecommunications operators could drive up the cost to communicate in South Africa.
Siyo said legislating the use of digital IDs alongside biometric authentication in the telecoms sector will prevent fragmentation in approaches by operators.
“What is important is biometric authentication as well as geolocation, because you have people in the informal sector who do not have street addresses,” Siyo said in an interview with TechCentral following the release of Telkom’s interim results on Tuesday.
“But you need another piece of plumbing, digital IDs, for everyone in South Africa. Having biometrics and digital IDs working together would give us a stronger system. We can help build it as an industry but then it needs to be legislated.”
This is not the only problem, though. In March, home affairs minister Leon Schreiber gazetted changes to the national identification regulations which governing access to the database that houses the national population register. This led to the database fees for access for real-time verifications rising from as little as 15c/query to as much as R10 – a 6 500% increase.
‘High cost’
Telecommunications operators – and other businesses in the banking, insurance and lending industries – use the home affairs system to verify the identity of applicants and prevent fraudulent transactions. The price increase was met with a backlash, with some companies – including TymeBank – arguing that the cost of accessing the database would lead to lapses in anti-fraud and anti-money laundering know-your-customer (KYC) processes.
Schreiber clapped back, arguing that the huge price increases were meant to prevent abuse of the system, which in the past had led to downtime. The minister also argued that a cheaper, after-hours batch processing pricing model – at R1/request – was available to ensure validations could still be done in a cost-effective way.
Read: Vodacom CEO: Rica has been ‘gamed’
Siyo said the approach the department has taken towards the abuse problem is not the right one.
“What home affairs is complaining about is valid. There are people who have integrated with home affairs who then sell the data to others. They were the ones pinging the system so frequently that home affairs needed to upgrade its infrastructure over the years, which they didn’t. So now, to deal with it, they just increase the price and we are saying, ‘No, just deal with the abusers,’” said Siyo.
He said the lower after-hours batch processing fee is not helpful since most verifications need to be done in real time. Operators either have to wait 24 hours to give a customer a Sim card or provide the Sim while awaiting the verification, which could contribute to higher rates of fraud.
“The high cost of real-time verification will most likely end up being reflected in the price of data because it is an input cost,” Siyo warned.
To work around the cost, companies including mobile operators would have to, over time, build their own databases for identifying citizens. Siyo said this may partly solve the problem, but the resulting fragmentation would result in inefficiencies that make it difficult for regulatory authorities to trace problems in multiple systems in any meaningful way.
Read: Home affairs faces backlash over ID database fee surge
Digital IDs would boost the system by increasing the speed of verification. Speaking in parliament on Tuesday, Rudi Dicks, head of Operation Vulindlela, said government aims to have a working digital ID implementation by 31 March 2026. – © 2025 NewsCentral Media
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