The Chinese government is working on a new regulation that would require all mobile phone users to subscribe with their real names, as part of an ongoing effort to fight against cellphone fraud.

But telecom operators and industry experts said the proposed regulation would require billions of yuan in investment to renovate phone carrier's existing systems, plus it may also raise public concerns over the security of their private information.

Li Yizhong, minister of Industry and Information Technology, said at a conference last week that the government is working on the real name cellphone registration, which is designed to protect China's 700 million cellphone users.

According to IT industry news website ChinaTechNews.com, Guangdong Provincial Public Security Department said that at the end of April 2009, the province had cracked 468 phone-based fraud cases, eliminated 46 fraud-engaged gangs, caught 323 suspects and took possession of stolen money totaling 2.45 million yuan ($0.36 million).

The public security department has suggested that due to public security risks sparked by illegal activities via SMS or text messaging, the related government departments should launch a real name mobile phone SIM card system, a ChinaTechNews.com report said.

This would tie purchases of all SIM cards and phones to the identities of the people who purchase those cards and phones, the report said.
 
Efforts for the real name registration have been discussed for years in China, as many cellphone users have complained of bothersome spam messages. Industrial regulators said it is extremely difficult to track the source of spam-message senders because telecom carriers do not require all users to provide their real identities.

Although Li did not disclose a timetable for the new regulation, earlier reports have said it could begin at the end of 2010.

One local newspaper in Liaoning province also reported on Thursday that the regulation would first be introduced in the Southeast China province.

According to government figures, China had 747 million cellphone users at the end of 2009. It is estimated that over half did not register using their real names.

Although the government proposal has been circulating in the media for over two years, major telecom operators remain in the dark about the nuts and bolts of the registration plan. "If the government is planning on implementing the requirement we will have no choice but to follow it. But we have yet to hear any details about it," said a spokesman for China Unicom that requested anonymity.

He said even if launched, plan execution would be "extremely difficult".

Xiang Ligang, a professor at the Beijing University of Posts and Telecommunications, agreed saying real name registration will provide a much needed boost for China's telecom industry in the long term as it paves the way for new wireless business models such as a mobile payment system, which requires the secure management of data. 

But for Xiang nothing will happen overnight.

"In the short term, it is a huge project and I don't think it could be rolled out anytime soon," he said.

Xiang estimated that the registration plan, if rolled out, will force cellphone carriers to upgrade their existing systems and overhaul their current sales and distribution channels, which could cost as much as 5 billion yuan ($732 million).

Telecom operators' text messaging revenues will also be cut up to 10 percent on lost subscribers after the rollout of the plan takes place, he added.

"Real name registration will inevitably increase costs for cellphone operators and their sales partners, which is one of the biggest obstacles for the new regulation," said Zhang Bing, an analyst from CITIC Securities. He said the regulation might also raise concerns from users over privacy protection.

Mobile phone real-name systems have been implemented in several countries including Germany, Switzerland, Austria, Japan and Singapore. In China, major telecom carriers have also required a portion of users - mostly high-end cellphone users - to subscribe using their real names.

 source:chinadaily