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China cracks down on telecom fraud with new prepaid registrations

A new registration system has been put into effect by operators across China as part of a drive to combat the increasing use of mobiles for the purposes of spam and telecoms services fraud.

The new regulations, which currently apply only to new prepaid accounts, require that customers identify themselves when they sign up, with a single customer limited to 18 different connections. The focus is on prepaid customers as operators are already able to identify contract customers easily; existing prepaid users will be required to renew their registration ‘in a gradual way’ without an interruption to their mobile services.

However, while the crackdown is purported to be beneficial to customers, detractors claim that it will compromise customer privacy, allowing authorities to ‘snoop’ on users.

The Ministry of Industry and Information Technology has not confirmed a deadline by which existing users must re-register, but 2013 has been reported as a possibility. Analysts estimate that once the registration system has been updated to cover existing prepaid customers, the details of roughly 300 million mobile phone accounts will need to be registered.

Similar crime-reducing measures in other countries have seen subscriber numbers drop dramatically. Both Mexico and Greece disconnected large numbers of prepaid subscribers as part of similar initiatives, and while there were widespread last-minute registrations, both markets saw an overall drop in subscriber numbers. The Chinese market’s sheer size could mean that even a relatively small percentage of accounts being deactivated could cause a similarly significant decrease in customer numbers.

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