The Communications Authority of Kenya (CA) has stated that Members of Parliament have no legal powers to stop Equity Bank from rolling out mobile banking services on its controversial thin-SIM cards, stepping up a simmering power tussle between the regulator and the National Assembly.
CA director-general Francis Wangusi said in an interview Thursday the approval for a one-year trial given to Finserve, Equity’s mobile banking subsidiary, was still valid despite the directive issued on Wednesday by MPs stopping commercial launch of the overlay SIM-card until “a technical audit” of its security features is carried out.
“We are an independent authority and it should be clear that this means there should not be interference by political, government or commercial interests,” Mr Wangusi told the Business Daily, adding that the CA is the only body mandated by law to license and regulate mobile network operators.
This position has been supported by the ICT ministry, with Cabinet Secretary Francis Matiangi saying Friday that he was satisfied with the CA's decision. ICT stakeholders backed Matiangi's position.
"Excessive parliamentary interference negates the need for a regulator," warned Mr Kamotho Njenga, the secretary general of the ICT association of Kenya.
Mr Wangusi’s declaration effectively draws the communications authority into a power struggle with the National Assembly’s committee on Energy, Information and Communication Technology (ICT) that could further delay Equity Bank’s intended rollout of services based on the paper-thin SIM card.
The parliamentary committee responded to this by warning the regulator that they “have the powers of a High Court”, saying that the authority would “face the consequences” for disregarding its instructions.
The committee said it was concerned about the security risks that the thin SIM technology might pose when it is overlaid on the original SIM card.
“If the CA continues with the roll-out plans and the matter is under investigations by Parliament, the authority will face full consequences if anything goes wrong,” said Kigumo MP Jamleck Kamau, who chairs the committee.
“When the CA appeared before this committee two weeks ago, the director-general and the board had not agreed. We have genuine concerns that when the thin SIM is put on the standard SIM, there is a possibility users’ PINs and SMSes will be revealed to third parties.”
But Mr Wangusi maintained the law was on the regulator’s side and urged Equity Bank to go ahead and issue the thin SIM cards.
The Kenya Information Communication (Amendment) Act gives the authority powers to conduct its business without hindrance.
“The Authority shall be independent and free of control by government, political or commercial interests in the exercise of its powers and in the performance of its functions,” reads chapter (5) of the KICA Act.
“Before we came up with the decision, we conducted a very thorough research and consulted widely. As such, the approval for a one-year trial still remains, unless Equity decides otherwise.”
John Waweru, executive director of Finserve, declined to discuss Equity’s position on the matter.
The parliamentary committee has responded saying that Article 125 of the Constitution gives it the powers to stop any project in the country. The committee has warned the regulator that it will bear “full consequences if its goes ahead and rollout plans and anything goes wrong”.
Article 125(2) states: “A House of Parliament and any of its committees has the same powers as the High Court.” However, the law notes that this is only for the purposes of summoning witnesses and enforcing their appearances.
On Wednesday, the committee directed that the use of the thin-SIM be stopped until experts verify that it cannot be tampered with.
The committee also announced that it had constituted an 11-member team to draw up terms of reference for the hiring of an independent international consultant to audit the technology Equity Bank plans to roll out.
Finserve was granted the mobile virtual network operator (MVNO) licence in April alongside Mobile Pay Ltd and Zioncell.
Equity plans to use the licence to roll out telecommunications and mobile banking services, riding on Airtel’s network and using ‘piggyback’ SIM cards provided by Taisys.
The strategy allows Equity to aim their services at all mobile users, not just new subscribers and those who leave the competition.
Safaricom, however, filed a petition with the CA, claiming that Equity’s service would pose a security threat to their M-Pesa mobile money service subscribers.
After a series of meetings involving Equity, Safaricom and other operators, the industry regulator gave Finserve the green light to introduce the technology, initially on a test run for a period of one year.
During this period a reputable independent consultant will carry out a technical audit to determine if any security risks exist. The authority has also demanded that Equity undertake to compensate subscribers for any losses.
The ultra-thin SIM card in contention is embedded with a chip. Users overlay it on their primary SIM cards, regardless of the network, and can then receive services from two mobile service providers by temporarily disabling the card they do not need.
Parliament’s committee on Energy and ICT said the National Assembly was mandated to oversee any institution that is funded by the public, including constitutional and independent commissions.
Igembe South MP Mithika Linturi said that, like the High Court, Parliament could issue orders stopping the implementation of any project, pending the conclusion of investigations.
“People say the House cannot stop the Executive from implementing its decision. They forget that Parliament has oversight powers to investigate and stop any projects that are not in public interest,” Mr Linturi said.
“We have the same powers of the High Court to stop thin SIM, call for evidence and give guidance to the House for a decision to be made.”