Days numbered for counterfeit handsets

By Carole Kimutai, Nairobi, Kenya

Kenyan authorities have unveiled their plan for  phasing out the use of counterfeit and grey market handsets in the country.

The Communications Commission of Kenya (CCK) held a consultative meeting Friday 9th September 2011 with Kenya’s four mobile network operators, government agencies (Kenya Bureau of Standards, Anti-Counterfeit Agency, Office of the President, Kenya Police and the National Security Intelligence Service (NSIS), and the Kenya Revenue Authority, and equipment manufacturer Nokia to discuss the way forward on the phasing out of the use of counterfeit mobile handsets in Kenya.

According to statistics from CCK, out of 25.2million subscribers in Kenya, 9.39 percent are using counterfeit handsets. Use of counterfeit handsets denies holders of Intellectual Property rights of their legal right to benefit from the fruits of their innovations, exposes consumers to health and security risks, and denies the Kenya government revenue.

Overall (apart from handsets), the government of Kenya is said to lose close to 20 billion shillings in revenue through counterfeit products.

Meeting resolutions

A statement from CCK says the meeting held yesterday resolved to stop the activation of new SIM cards using counterfeit mobile handsets. “No new SIM cards would be allowed to operate in counterfeits handsets tentatively as from 30th September 2011,” says the statement.

However, a meeting of the technical teams from the four mobile operators, equipment manufacturers and CCK shall be held on Wednesday 14th to deliberate on the suitability of the 30th September date.

Consequently, it was also agreed that use of counterfeit handsets shall be phased out of the market by the end of the year. “Consumers using counterfeit mobile handsets therefore have (tentatively) up to 31st December 2011 to replace their mobile phones or risk de-activation.”

CCK is reassuring the public that the phasing out of counterfeit handsets shall be done in a coordinated manner to involve all stakeholders including government agencies, industry players, consumers and equipment manufacturers.

Towards this, a public awareness campaign will be done to sensitize consumers on the rationale behind the phasing out of counterfeit mobile handsets, the dangers associated with use of counterfeits, and the tentative deadline for deactivation of counterfeit mobile phones.

There ongoing discussions between the four mobile networks about sharing data on stolen handsets, and expanding the initiative to other East African countries to stem export of stolen handsets. 

Switched off

If the programme goes on as planned, more than two million mobile subscribers in Kenya will be switched off. Considering that most users are based in urban areas, if the phase out is not done well, it will cripple communication and have a massive impact on core services that depend on mobile telephony.

The last few months has seen a growth in mobile subscribers that was boosted by a vicious price war prompted by Bharti Airtel when it bought Kuwait owned Zain. According to the CCK quarterly sector (second quarter October-December 2010/2011) statistics report released in May 2011, there was a 12 percent growth with 2,935,223 new mobile subscribers. Although there are no figures on subscriber numbers from the various mobile operators on who is using a counterfeit phone, it will be interesting to see who loses what market share.

In Kenya, SIM cards are sold for less than a dollar and the price of handsets remains prohibitive for majority of the Kenya population who are currently grappling with inflation that has led to high cost of necessities like food and fuel.

There has been an entry of mobile brands in the country who are partnering with mobile operators to sell low-end smart phones, a strategy that is part of growing the data market – where most operators are setting sights as voice revenues dwindle.

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