Equity’s ThinSIM will benefit the market

Many twists and turns have accompanied the revolution witnessed in Kenya’s mobile telecommunications business in the past decade. Today, up to a third of the revenue in the industry stems from the mobile money transfer platform.

It is clear that the old business model in mobile telephony where profits were churned through voice is evaporating as people embrace technological platforms of messaging like Whatsapp and in the process, upping data usage.

The same shift is wreaking havoc in banking halls as bankers scramble or position themselves to offer their customers more convenient mobile money transfer services in competition with mobile companies.

Equity Bank, which was awarded a Mobile Virtual Network Operator (MVNO) licence by the industry regulator recently began distributing SIM cards to its customers. The queues at Equity’s distributors were long and, it has been reported, winding. Perhaps this is an indication of how eager the public is to try out the bank’s new offering.

While it is still too early to tell where Equity is headed with its new technology, monumental efforts have been made to stop the bank from rolling out its new product. This has spurred debate with some pundits questioning the motive behind the profound resistance to Equity’s ThinSIM.

From there, it’s only a short leap to ask whether this obsession to stop the use of the new technology, which will offer customers the convenience of making calls and a money transfer platform, is coming from.

The country has seen several attempts to stop the roll out since the announcement that the bank was planning to issue the ThinSIM to its customers.

The efforts are not only meant to stifle the bank but are also meant to kill innovation and productivity.

Hysteria about the adverse effects of technological change on the business environment have a venerable history. In the early 19th century, a group of English textile artisans calling themselves the Luddites, afraid of losing their manual jobs to industrial revolution-driven machines, staged a machine-trashing rebellion. Their brashness earned them a negative place in history, but they had legitimate reasons for concern.

Technological changes like the one proposed by Equity bank come with disruptive effects and have potential to overhaul market dynamics and may destabilise competitors who don’t prepare well.

This explains all the resistance we see to the implementation of Equity’s new model of doing business. From ordinary citizens to institutions, a lot has been thrown on Equity’s path to derail its motion.

But detractors should know that there is a lot more to the mobile and banking ecosystem than the fates of companies and competitors.

The English textile artisans tried so hard to resist change,but were overrun in the long run. The lesson here is that we can try as much as we can, but it is very difficult to stop an idea whose time has come.

The industry painfully learned that once change in business model is upon you, trying to throw up the barriers and pretend it’s not happening is a waste of valuable time.

During the industrial revolution, no one could foresee that a century later, health care, finance, information technology, consumer electronics, hospitality, leisure and entertainment would employ far more workers than agriculture. But these industries overthrew the old order and are now thriving.

The argument that the bank’s new ThinSIM technology is disruptive and could compromise the data of users is a ploy to distract consumers from debating the real benefits of the technology. The association of mobile operators (GSMA) has stated that the level of risk to users of Equity’s ThinSIM is dependent on the trustworthiness of the provider and issuer of the overlay SIM.

But why shouldn’t we trust Equity Bank with our mobile data if we trust them with our money, ATM passwords and other important records?