Monday, October 1, 2012

Booming business for shops as CCK shuts fake phones

By MUTHOKI MUMO [email protected]

Monday was the day of reckoning when millions of fake mobile phones handsets in Kenya were switched off the networks.

Kenyans flooded phone shops across the country in a last-minute dash to replace counterfeit handsets.

“My phone has not been switched off, but I suspect it might. I will just have to go at a loss to replace it,” said Mr James Mutinda at a Safaricom Shop in the Central Business District.

Communication Commission of Kenya director-general Francis Wangusi, said that at least 1.4 million handsets were switched off on Monday.

Safaricom blacklisted and blocked 680,000 phones from its network, Telkom Orange locked out 75,000 phones while Airtel blocked 740,000 phones. YuMobile independently confirmed that it had switched off about 45,000 phones.

“The switch off is going off without a hitch as far as I know,” added Ministry of Information and Communication Permanent Secretary, Dr Bitange Ndemo.

A survey by the Daily Nation revealed that some owners of fake handsets were still operating their devices well after 4 PM.

According to information released by mobile operators last week, the entire operation was supposed to commence at midnight on Sunday and take 15 hours.

“The switch off is still going on. We have received a central database of 588,000 phones to be blacklisted. This database will be used by the whole industry,” said YuMobile CEO Madhur Taneja at 3:30 pm.

Despite these numbers, the Consumer Federation of Kenya (Cofek) reported that it had not received complaints from users whose handsets had been affected. Further, the lobby claimed, a counterfeit phone that it had been utilizing to monitor the switch-off was still able to access the networks easily.

“What this means is that the exercise has been progressing too slowly. Either people had replaced telephones in advance or the number of fake handsets was not as high as we had been made to believe,” said Cofek secretary general Stephen Mutoro.

Number rose

At the beginning of the year, it was estimated that there were 2.5 million counterfeit handsets in the country. Safaricom claimed that about 1.5 million of these phones were operating on its network.

By last week, Safaricom said that the number of fake handsets had fallen to about 670,000. At the same time, the industry wide estimate fell to about 800,000.

Mr Mutoro claims that the high estimates benefited mobile equipment manufacturers who expected a sales boom from the pending switch-off. In recent weeks, both Nokia and Samsung launched campaigns offering discounts to phone users with fake handsets. Mobile operators also offered deals in their equipment shops.

“They expected to make a boom from this. I suspect that they might be disappointed,” said Mr Mutoro.

Amidst all this it was clear that consumers using unregistered SIM Cards escaped the exercise unscathed despite threats from the Communications regulator. CCK had insisted that it would also block consumers using unregistered SIM cards along with the counterfeit handsets.

“This particular move is awaiting legislation. The director general is yet to publish the guidelines on unregistered SIM cards and until he does, we can’t do anything,” said Safaricom corporate affairs manager, Mr Nzioka Waita.

Counterfeit handsets are said to cost the Kenyan economy millions of shillings in evaded taxes annually. Mobile operators have also complained that the gadgets degrade and clog their networks.

Despite this, efforts to switch off the handsets have been delayed repeatedly and been plagued with controversy. On occasion, Cofek has threatened to sue the government over the directive.

Just last week, four individuals went to court challenging CCK’s legal mandate in terminating services to counterfeit handsets.

The deadline for termination of services to counterfeit handsets had originally been set for December 31, 2011 but was postponed to April 2012 and subsequently to September.

The regulator’s ability to pull off the exercise successfully will be instrumental in maintaining its credibility and public confidence that has been eroded by undelivered promises, indecisiveness and divisions within CCK’s board.

Last week, the regulator was supposed to deliver its verdict on another contentious issue in the communication sector — the tariff at which mobile operators terminate calls to each other.

However, the board failed to come to consensus, a situation that will see consumers suffer relatively high mobile tariffs for the foreseeable future.

The public’s eyes now turn to the Kenya National Bureau of Statistics and the Kenya Revenue Authority to ensure that counterfeit handsets no longer enter the Kenyan market.

Both bodies have come under fire for shirking their duties of protecting local consumers from sub-standard and harmful products throughout the switch-off controversy.