The Kenyan government has extended the deadline by four months for mobile operators to switch off subscribers using counterfeit phones, in a drive to stem an estimated Sh3.2 billion in revenue losses from up to two million counterfeit handsets in use in the country.
ICT sector regulator, the Communications Commission of Kenya (CCK), announced the extension of the disconnection deadline from the end of December 2011 to 30 April 2012 in an effort to head off disruption, as a cut-off loomed that would take out almost 10% of the country's handsets.
The December deadline was set in September, but the CCK said more time was needed to run a consumer awareness campaign, and for the industry to establish a mechanism through which consumers could confirm the status of their mobile device, said acting CCK director-general Francis Wangusi.
Regulatory concern over counterfeit handsets stems from the losses incurred by legitimate phone manufacturers through the counterfeiting of their products. Counterfeit handsets may also expose consumers to safety and health risks, as the phones may not meet the approved radiation standards.
Counterfeit devices typically enter markets via unofficial channels, thus denying the government revenue. It is estimated that counterfeit phones cost the Kenyan economy upward of Sh3.2 billion a year.
The government directive originally required that all operators switch off all handsets whose international mobile equipment identity (IMEI) was not registered by the end of the year 2011.
Globally, all mobile phones are assigned a unique 15-digit IMEI code on production, which is the backbone of genuine handsets.
But the extension of the deadline confirms the dilemma the regulator faces in dealing with subscribers who acquired the handsets unknowingly, while also protecting the established mobile industry.
According to industry statistics, close to 2.4 million mobile phones in the market are counterfeit, representing 9.39% of the active mobile devices in the country. However, most subscribers do not know if their handsets are genuine or fake, and switching them off could have sparked a wave of uncertainty in a mobile market that has witnessed exponential growth.
If the programme proceeds as planned, more than two million mobile subscribers in Kenya will be switched off. This could have a massive impact on core services that depend on mobile telephony.
Millions of mobile money transfer transactions are done every day in Kenya, with each service provider having its money transfer service product. These are Safaricom M-Pesa, Airtel Money, Orange Money and Yu-cash. According to the Kenyan Central Bank, in only four years of existence of mobile phone money transfer services, four mobile operators have enrolled over 15 million customers, with daily movement of cash of more than Sh2.3 billion.
According to the statement from CCK, the extension will also allow mobile operators to undertake the requisite technical preparations in readiness for disconnecting the counterfeit handsets.
Wangusi said the industry was exploring the possibility of putting in place a system through which subscribers would be able to interrogate a central database via SMS to verify whether their devices are genuine or not.
The ongoing initiative to rid Kenya of counterfeit mobile phones is being driven by CCK in conjunction with industry players, handset manufacturers, and other relevant government agencies, including KeBS, Office of the President, Anti-Counterfeit Agency, and the Kenya Revenue Authority.
In Kenya, SIM cards are sold for less than a dollar, but the price of handsets remains high for the majority of the Kenyan population, who are currently grappling with inflation that has led to high cost of necessities like food and fuel.
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