Report to Parliament on phasing out of air time scratch cards
MINISTRY OF INFORMATION, COMMUNICATIONS TECHNOLOGY AND
Right Honourable Speaker, I thank you for giving me the opportunity to respond to the issue raised by Hon. Akamba Paul (MP- Bukono County) on the 24th July 2018 regarding the ban of Air time scratch cards.
2.1 Hon. Speaker and colleagues, we all remember that early this year, our country experienced an unprecedented surge in the number of crimes committed using mobile phones, including the rampant kidnaps and murders of several women, such as Susan Magara and the Entebbe women.
2.2 In order to improve the security situation, in March 2018, Cabinet agreed to the streamlining of Sim Card registration processes and an inter-Ministerial Committee of Cabinet involving Internal Affairs, Security and ICT was tasked to engage with Telecom operators with a view of finding solutions to the phone-based security threats.
2.3 Several measures were implemented, including requiring all telecom operators to install Biometric card readers such that all SIM Card Registrations and SIM Swaps are done only upon electronic verification of the biometric details of the SIM card applicant.
2.4 Honorable Speaker and Honorable colleagues, in addition to SIM Card registration, the Uganda Communications Commission (UCC) working with other security agencies further consulted the sector players to recommend other practical measures through which Government could eliminate SIM Card related crimes and improve traceability of mobile phone users.
2.5 UCC and the security agencies recommended to Government that vending of air time cards was directly linked to the selling of illegally registered Sim cards and would facilitate airtime recharge and top-ups manually without any digital tracing.
2.6 The use of electronic recharge systems was therefore recommended as the most viable and secure option, with so many other attendant advantages. Electronic recharge system is already a common practice in many other developed and developing countries, including South Sudan and Zimbabwe.
3.0 ADVANTAGES OF ELECTRONIC RECHARGE SYSTEM
3.1 Honorable Speaker and colleagues, the use of the electronic recharge system has brought with it, the following benefits;
(1) It has improved the process of directly tracing vendors/hawkers/stockists and eventually their customers who procure airtime electronically.
All vendors who have been selling the paper version of airtime scratch cards have been given the opportunity to sell the same airtime in a digital format using an ordinary phone as a tool of trade, and have been duly registered by the Telecom operators.
There is therefore no inconvenience to anybody since the same people and outlets that were selling the paper scratch cards are the same points of sale for the electronic recharge.
Contrary to the fears that digitization of airtime shall cause a mass loss of jobs, it will instead create more opportunities through formalized distribution.
(2) It will improve revenue assurance by Government, since with the electronic system, URA can determine the amount of Airtime sold by Telecom operators and agents and thus rule out any tax under declarations.
(3) This system will reduce e-waste caused by the many scratch cards that are thrown into the environment. Honorable Speaker, I am aware that in his statement, my colleague, Hon. Akamba suggested that since there are many buvera’s in our environment, Government should not bother about Airtime scratch cards.
I am happy that Hon. Akamba acknowledges that paper scratch cards were adding to the environment menace. However, if we have not yet succeeded in banning buvera, it does not mean that we should condone any other waste that contributes to the already bad situation.
(4) Furthermore, the use of electronic recharge systems will protect the public against purchase of fake air time scratch cards intended to defraud unsuspecting members of the public. Security agencies have in the past arrested a number of people defrauding members of the public through sale of fake air time scratch cards. I believe that using the e-recharge system, this problem will be completely eliminated.
(5) Honorable Speaker and Colleagues, air time scratch cards are a cost to the provision of communication services in Uganda. It involves the cost of manufacture, importation and distribution which increases the overall cost of doing business.
In addition, the paper scratch cards are manufactured outside Uganda, and add onto our importation bill thereby facilitating capital flight.
With the new electronic recharge system, it will rationalize/minimize all associated costs in the distribution system enumerated above and mitigate both importation of scratch cards and capital flight to some extent.
(6) Electronic recharge system is one of the steps of inculcating among the citizens the culture of e-commerce by transacting digitally and slowly transition into a cashless economy.
Honorable members, the advantages of a cashless economy are enormous with creation of digital jobs through anticipated innovation.
(7) Lastly and for emphasis, Electronic recharge systems will enhance security measures on telecom related services because there shall be traceability in the entire transaction.
4.0 PROCESS TOWARDS THE BAN
4.1 Hon. Speaker, UCC and the sector operators informed the public about the planned ban on scratch cards in March 2018. The sector players agreed to set 31st July 2018 as the deadline for the use of paper air time cards, after carefully evaluating the process necessary to effect the ban.
4.2 Several public notices have been running in the mass media to prepare customers for the shift to the electronic recharge system. Consumers can buy airtime using Easy Load, Mobile money, Me2U, Payway and several other electronic means, and these services are available across the country, at the same outlets that were selling paper air time vouchers.
4.3 The mobile network operators have gradually phased out the distribution of scratch cards and majority of users are already using E-Top up. They are also working out mechanisms to redeem any scratch cards that will still be in the hands of customers by 31st July 2018. Mobile operators have already put in place system to facilitate conversion of any unutilized scratch cards into mobile money. Through this system, no customer will lose money. They will be refunded for any unutilized air time cards.
4.4 A team from UCC has visited a sample of 186 outlets around the country to verify SIM card and Vendor Registration, and progress to adopt Electronic Airtime in 37 districts. The findings are that 99% of vendors assessed are already selling electronic airtime and 54% still had some scratch cards they expected to sell by 31st July 2018. Vendors/Stockists/hawkers are being encouraged to register with the operator’s distribution structures to continue selling airtime conveniently using Electronic top up.
4.5 Telecom companies are working with their agents and distributors across the country to ensure that there is seamless transition from the old system to the new system.
Honorable Speaker and Honorable colleagues, it is instructive to note that we are in the digital era and its therefore important that we all embrace these new measures that are being implemented by Government in service delivery.
We should all encourage all our country men and women to adhere to these measures for our own good, and where someone faces specific unique challenges in accessing electronic recharge system, we encourage such customers to approach their respective service providers and UCC for necessary support.
In Conclusion, just like in the past we all relied on postal mail and fax for transmission (Quasi manual-digital), technology led us to communication by email and other electronic platforms. Continuous technological advancement, will further lead to other digital migrations in the way we conduct business. Let us embrace these technology advancements and not resist them. If you resist technology it will disrupt you.
I beg to submit.
Frank Tumwebaze, MP
Minister of ICT & National Guidance