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Wednesday, December 05, 2007

A misconception - 1 SIM = 1 Identified User

There seems to be a common belief that because all GSM/3G phones have SIMs, and that everyone has a phone, this means that the SIM is an ideal platform for determining identity. I've heard people suggesting integrating SIMs with healthcare records, payment cards, ID cards and other similar alternatives.

I'd urge caution on this. The world is not as simple as you think.

Some of the problems:

  • People have multiple SIMs, and multiple devices. While this doesn't apply to everyone, a growing fraction of individual users will fall into this category. I'd expect far more people to have 2 SIMs than 2 nationalities/passports.
  • A few people have no phone/SIM and no inclination to change. Some form of 'digital inclusion' policy would be needed for the cellular refuseniks.
  • *EDIT* - also see my more recent post where I try to quantify the two factors above
  • Many countries still have anonymous prepaid SIMs. While some countries like Italy & Thailand force SIM purchasers to register their ID, that's a far from uniform situation. I've bought loads of SIMs over the years with total anonymity. And I'll bet that black markets exist even in countries where registration is mandatory.
  • Just because a SIM is registered to an individual, that doesn't mean they're the user. A speaker from India yesterday said that SIMs are usually registered to a head-of-household, rather than the actual user.
  • No idea what happens with legal responsibility & identity with children with SIM cards, but I'll bet it's complex and variable per-country
  • Plenty of SIMs are used by machines, not people. How do you know if it's actually a vending machine that's sending a message, or someone hooked up via a PC?
  • Some phones or other devices are shared between multiple people (eg in 'pooled' devices in businesses, cellular fixed phones, or phones for a whole village in emerging markets)
  • There is some evidence that young people swap phones (& SIMs) amongst each other in social groups. This could be because of the dynamics of who has prepay credit among friends, for example, or in situations where an operator doesn't offer x-network minutes and it makes sense to use someone else's phone to save money.

The last point is perhaps the most crucial. The whole idea of one SIM = one person it hugely exposed to the risk of social dynamics and fashions. It only needs one group of teenagers to come up with a 'killer app' for phone-sharing or swapping (maybe it becomes cool to have a new number every week), you get viral adoption around the world in a couple of months, and the whole identity/SIM linkage falls apart.

Ironically, the use of Internet access on mobile devices exacerbates this risk, as potentially users can sign into Yahoo/Google/Skype/Truphone/Fring from any device rather than their 'official' phone & SIM.


Jorge L. Arienza said...

There is no question those habits are real but I don't see how they are an obstacle for optional services based on the link SIM and ID.

If I see a lot of value in a particular application (healthcare, payment, etc) I am free to change my habits to benefit from a particular service.

I agree that based on those social dynamics you can not create public (i.e. mandatory) services that implies SIM=ID

Paul Jardine said...

If 1 SIM (IMSI?) <> 1 person then what is the point in using it as an identification mechanism? You might as well use a PGP key.

Incidentally, I still have several unregistered SIMs in Thailand; they still work!

Aditya Kaul said...

Dean, you have done the analyst community a big favour by doing this sort of analysis. I think this raises a bigger question for me, which is what does the 'subscriber' in 'subscriber numbers' mean? As far as I am concerned there is much more than what meets the eye, and us being analysts need to be very careful.

Check out my post on Kaulout!

Dean Bubley said...

Aditya - Many thanks for your comments and your own post - which I suspect relate to my subsequent post as much as this one. http://disruptivewireless.blogspot.com/2007/12/multiple-device-ownership-crunching.html

Jorge - I suspect it will depend heavily on the individual, and the specific operator/country. Personally, I can't see myself wanting to use a SIM as a payment tool - I'm perfectly happy with cash or credit/debit cards.

Paul - good point. And it makes me realise that situation gets even more complicated with dual-IMSI SIM cards....

Mike Schenk said...

I don't see the problem with having multiple SIMcards per user. I have several physical ID cards as well, such as my drivers license, passport, company pass, etc. They are not valid for all applications (i.e. I can't get into my office with my passport and can't cross a border with my company card). So I don't see why the SIMcard could not be added as yet another ID card, valid for some applications.

Furthermore, the SIMcard itself (more correctly named the UICC) is a carrier for information, ID-related or not. The SIM/USIM/ISIM applications are the equivalent of a real life ID. The UICC could also be used to store other proof of identities.

I am not sure whether there is a market for it, especially in the short term and there are many details to be figured, legally, technically and commercially. However the fact that 1 SIM does not equal 1 User is not a problem in itself (and I don't think it's a misconception either).

Anonymous said...

agree with mike. i work at an operator and its and area we have very good knowledge of and its certainly neither a problem or a misconception.

Dean Bubley said...

Anonymous - Yes, I'd certainly hope that *operators* realised this, as otherwise the CFOs & CEOs would have some interesting questions to answer from Messrs Sarbanes, Oxley & friends at the FSA and SEC and peers.

It's not exactly rocket science to work out what 100%+ "subscriber penetration" means in reality.

And yet a surprising number of observers and industry participants - including some individuals at operators - don't bother to think this through.

Like the GSMA, for example:

2.5bn *people* using GSM/UMTS? Well, maybe if you include the multiple villagers each using a phone lady's single SIM + handset in south Asia.

There's precious little open discussion about the exact dynamics of multiple SIM ownership, beyond a couple of references in some Vodafone investor presentations.

While some people at operators seem well aware of the exact mechanics, they also seem more than happy for others (including some of the own employees, plus friendly partners and investors) to work under the misconceptions.

Sins of commission / omission etc....