In Summary

Footprint of SIM overlay technology

SIM overlay technology was pioneered in China more than a decade ago but is yet to gain traction across the globe.

Initially, firms planned to use the technology to help travellers avoid heavy roaming costs incurred abroad.
Its usage has since evolved significantly. A firm called F-Road is currently using ultra-slim SIMs to extend mobile banking services to more than 4.3 million customers in rural China through partnerships with 1,100 financial institutions.
China’s mobile money and mobile banking scene, at the base of the pyramid, is markedly different from Kenya’s. While telecom firms have led the way locally, in rural China, financial institutions are pushing the agenda.

F-Road provides the infrastructure to do so through the provision of Thin SIMs and provides management services on the network.

“As a result, banks neither need to invest in their own technology nor partner with mobile network operators.

F-Road provides the platform and system free of charge, but earns revenue for monthly fees charged to financial institutions for each active user,” writes the International Finance Corporation (IFC) in a note on F-Road.

In 2012, IFC invested about Sh239.3 million ($2.75 million) in F-Road Equity. This year, IFC and the Financial Times gave F-Road a Transformational Business Award for achievements in inclusive business.

There are a number of other companies using SIM overlay technology. One of them, Taisys, is in operation in Taiwan, China, Thailand, South Africa, and Singapore. The company markets its product as a way to retain customer loyalty in “the growing multiple SIM market”.

A Canadian firm, Roamly, markets a product that is targeted at regular business travellers. On the overlay SIM, the company provides services that are cheaper than the average roaming prices offered by telecom operators.

Equity Bank’s plans to launch telecom services in Kenya face another hurdle following an objection by one of the telecommunication players over the technology the bank intends to use to rollout.

In a letter to the Communications Authority, Safaricom chief executive Bob Collymore says Equity Bank should be prohibited from issuing thin SIM cards as it could expose subscribers to financial fraud and intercepted communication.

Kenya’s largest mobile company wants the Communications Authority to invite the GSM Association — which represents the interests of mobile operators worldwide — to review the risk posed by the technology to other mobile operators and subscribers.

“In the meantime, we call on the Communications Authority to prohibit its use in Kenya,” Mr Collymore says in the letter copied to the Central Bank of Kenya and Equity Bank through its subsidiary, Finserve.

The SIM in contention is paper-thin and is embedded with a chip. Users overlay it on their primary SIM card, regardless of the network, and can subsequently receive services from two mobile service providers simultaneously. Its use means Equity Bank does not have to issue its own SIM cards but could ride on the existing ones.


Safaricom’s major concern is the security of its money transfer service, M-Pesa, which it says would be vulnerable to attacks.

“It would compromise the security of the M-Pesa system and consequently expose our 19 million M-Pesa subscribers to irreparable harm,” says Mr Collymore.

Contacted, Equity Bank chief executive James Mwangi dismissed Safaricom’s concerns as baseless.

In a phone interview, Mr Mwangi said SIM overlay technology does nothing more than provide dual SIM capability without the need to change handsets.  The product, he said, is needed if Kenyan subscribers are to have true choice in telecom services.

“The opposition by Safaricom is speculative and would require technical proof. To the extent that the thin SIM has not been rolled out, they cannot allege without proof,” he said.

Mr Mwangi said the company is on track to launch telecom services to the mass market this month despite the concerns raised by Safaricom and a court case by the Consumer Federation of Kenya (Cofek).

On 10 July, Mr Mwangi said the firm’s banking agents and the families of its staff would be issued with SIM cards.

Safaricom’s is the latest round of opposition to Equity’s ambitions to make an entry into the telecommunication sector. Cofek has filed a case in the High Court, questioning the manner in which Equity Bank and two other firms were granted licences by the Communications Authority to become mobile virtual network operators (MVNOs). Cofek’s concerns echo those raised by Telecommunication Service Providers of Kenya in May.

Finserve Africa Ltd was in April granted an MVNO licence alongside Mobile Pay Ltd and Zioncell. Equity Bank plans to use the Finserve licence to roll out mobile banking services independent of any operator. Customers will also be given data and voice services on the network.


Anticipating reluctance from some of its 8.7 million customers to migrate to the new network, Finserve said that it would give customers an option of using a special SIM card that would give them access to two networks simultaneously without the need for dual SIM phones.

Safaricom objects to the technology on four grounds. Most crucially, the company claims that the technology would be able to “intercept” and “distort” communication on the primary SIM card. 

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