22 February 2013

Uganda: Fake Phones Row Deepens

As the countdown to the disconnection of "counterfeit phones" nears, questions have arisen over the legality of the exercise. The Uganda Communications Commission (UCC) says it is implementing a project that aims at the gradual and orderly elimination of counterfeit mobile phones from the Ugandan market by July 1, 2013. But users and sellers of the phones, commonly known as China phones, are not amused.

Cheap, flashy, multi-purpose and loaded with multiple SIM cards - some as many as four - most of the phones look exactly or even better than the original brands. Because of this, the counterfeit phones have grown in popularity particularly among low income earners who are lured by their attractive functions such as torch, radio, music player and TV, which even those with expensive genuine brands wish they had.

Some of the fake phones come with the same brand names as genuine ones - like Nokia and Samsung - except that the fake ones are as much four times heaper. UCC says all telecom operators are under instructions not to connect new counterfeit phones, while disconnection of those already on the network will start effective Oct.31 -Dec.31, 2013. That will be three months later than the July 31 deadline they had set earlier.

UCC defines a 'counterfeit' mobile phone as a device whose International Mobile Equipment Identity (IMEI) number is not legitimate according to the GSMA database or which is associated with an IMEI that is genuine but not assigned to that particular device but to another legitimate one (also known as IMEI cloning). The disconnection was supposed to start last month but consensus has not been reached about the procedure for the disconnection.

This, according to UCC, was because the project would have a big impact on a large number of stakeholders along the entirety of the telecommunication value chain. These include URA, importers, dealers, users and of course the telecom companies that would lose millions of customers. However, Fred Otunnu Okot, the UCC manager for communications and consumer affairs, says the dates for disconnecting such phones would not be extended because they were finally agreed upon by all stakeholders. "The disconnection of all counterfeit phones should be finalized by the end of this year on Dec.31, said Otunnu.

But dealers and distributors of the phones unusually do not seem to be bothered. Susan Nasuna, one of the dealers in these "counterfeit phones," actually doubts that UCC has the requisite technology needed to disconnect the phones. "It does not worry me at all," she told The Independent in an interview.

Uganda appears to be following in the trail of neighboring Kenya, where by September last year, the regulator had implemented the disconnection of almost all counterfeit phones. However, before they knew it, the phones had been re-connected. Apparently, even the telecom companies were not willing to see millions of their subscribers disconnected. When asked if the UCC expects the same to happen here, Otunu said, "We are ready for it," adding that by the time they came up with those plans, they expected that to happen.

Indeed, Geoffrey, a dealer in counterfeit phones, who didn't want to disclose his surname, suggested that as UCC plans to disconnect the phones, they are also "studying and finding means of re-connecting them." "It is just a simple thing that has to do with [manipulating] the software," he said. He said it is possible that the top phone makers such as Nokia and Samsung - worried about the way the counterfeits are eating into their market share - are collaborating with the UCC so as to disconnect the so-called counterfeit fake phones.

"I think Nokia and Samsung are not happy about the fact that the sellers of these Chinese phones have taken over their market," he said. He warned that if the UCC goes ahead with its plans, they would not hesitate to sue it because according to him, it is not the role of the UCC but the Uganda National Bureau of Standards (UNBS) to deal with so-substandard products that come into the country. After their goods got clearance from UNBS, they say the money they paid in taxes must be refunded if the UCC is to disconnect the phones.

Otunu admitted that they are still talking to talk to the relevant government agencies in order to stop the importation of counterfeit products. This is because unless the influx of these products is stopped, consumers would keep buying and purchasing them and the circle would go on. But UCC insists that Uganda Communications Act (Cap 106 Laws of Uganda) mandates it to ensure compliance with national and international communications standards and obligations laid down by international communication agreements and treaties to which Uganda is a signatory. It could not immediately be established if or not eliminating fake phones was part of the "international communication standards."

UCC says it is mandated to protect the "integrity of telecommunication networks in the country and to ensure that consumers get a good deal for paid telecom services. "These phones are substandard, which sometimes explains poor quality services - the phone keeps dropping and blocking calls, yet it is sometimes blamed on the service providers," said Otunnu. He said because these counterfeits are duplicates of the original phones, they do not go through proper testing and most are made from substandard material that is likely to fail the test of electromagnetic field transmission, which is a health hazard. UCC says phone users should know that fake phones emit higher levels of RF radiation, which scientists say affects the human body in the long term.

However, the traders said some original phones, when tested, are indicated as fake and the reverse is true. Since the announcement was made, dealers like Simba Telecom, who sell original brands, are making a kill as more phone users revert to the original handsets. Indeed, UCC hopes that as the demand decreases so will the imports. Also, because of environmental concerns, these phones should be eliminated because unlike the genuine ones they work for a shorter period of time before they have to be disposed off. However, some users say they have held their phones for several years, contrary to UCC's assertions.

"I don't think these phones should be disconnected because millions of people depend on them," said James Kato. I also believe that UCC should not disconnect the phones because it is UNBS' fault for letting them into the country in the first place. The best thing is to prevent more of these from hitting the market. Disconnecting them only leaves the users in a dilemma they are not responsible for. "Why would they disconnect these phones yet the government gets a lot of taxes from them?" He asked.

Others said UCC should first of all work with the Uganda Revenue Authority, UNBS, the business community and the police to control the importation of the devices. Also, public education and information campaigns would help to reduce the demand.

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