Govt To drop the lid on counterfeit phone market

By Kelvin Chiringa
July 2016
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Minister of Information and Communication Technology (MICT), Tjekero Tweya says Government will soon drop the lid on the proliferation of counterfeit phones on the local market and also challenged the Communication Regulatory Authority (CRAN) to fully implement the anti-counterfeit law.
“The law on counterfeiting is in place, yet the regulator has not been doing its job properly but I have directed it to take action against ‘disposable phones’. I am sure they will take their job seriously.”

“My role is to direct the board and the police force has a mandate to track all violators of the law, and I am warning those who sell counterfeit products that their days are numbered,” says Tweya.

Asked on how much revenue government was losing from the influx of cloned mobile devices, the Minister responded that a proper research is yet to be done by his ministry to come to a figure.

According to a latest report, the annual global losses due to the influx of fake products stands at $1.7 trillion, a staggering figure that is enough to unite the world against the sale of cheap mobile devices.

While this influx continue unabated, investigations carried out by Prime Focus Magazine indicate that the police force seem to be taking no significant action to confiscate these cheap products.

 “The police are not a trouble to us, if they come they just ask for our identification documents but business is going on well,” said one phone vendor who identified himself only as Ignatius.

“The problem is that these original phones cost too much. An original Samsung S7 costs something like N$15 000 and that is double someone’s entire salary, but you will find it cheaper with us going for N$4 000 and people are buying,” he said.
When asked for a comment by this publication, the head of electronic communications for CRAN, Ronel le Grange, disputed that the 1965 Anti-counterfeit Act affects currency and is mum on fake devices.

“Counterfeiting and fraud are serious crimes, yet they fall under the criminal act and not under the communication act which is what binds CRAN. The Anti-counterfeit Act of 1965 is restricted to currency and not mobile devices.”

“Type approval is what falls under the mandate of CRAN, (and) to that end we have regulations requiring type approval of all telecommunications equipment and regulation is currently under implementation,” says le Grange.
Although she reiterated that the minister had not misfired she, however, shifted the responsibility to customs as the right authority which should be confiscating the devices together with the police.

 Nevertheless, CEO for Rand R Importers, Ronnie Adams, applauded the Communications Regulatory Authority of Namibia’s initiative of urging citizens to possess type approved devices which ascertains that they meet international standards as a step in the right direction.
“At R and R importers we have not yet started to feel that pressure of competition from the black market, maybe because our Cubot and Dooge brands are not yet that popular to attract any possibilities of cloning.

Yet, we applaud CRAN’s type approval initiative as the first step in the right direction,” says CEO of R and R importers, Ronnie Adams.
The police department of commercial fraud’s Inspector Gerson Boois emphasised that the police force would only begin to act when the owners of a particular brand made a report.

“In the past we have only dealt with brands like Nike and Adidas who launched their petitions with regards to brand cloning but no single phone brand has brought this to our attention.”

“As police we cannot respond to anyone who just sells original phones without owning the brand and that is why nothing has been done yet with counterfeit phones,” said Inspector Boois.

While retail outlets that sell original mobile phones have to pay tax, it seems the competition from the black market is likely to upset business.
“I have mobile phone retail outlets dotted around Windhoek and all of my phones are original, but these vendors come to sit right at the front doors of my shops,” says owner of GCM who only identified himself as Rahim.

“Despite numerous efforts to teach the public on the dangers of counterfeit phones, they still buy from the streets and we run a loss every month,” he adds.

 Meanwhile the Tanzania Communications Regulatory Authority (TCRA) announced in February 2016 that Tanzania was set to switch off all counterfeit mobile phones on 16 June this year in a move aimed at protecting consumers from substandard phones, safeguard mobile payment systems and prevent crime.
Despite their negative impact on the economy, counterfeit phones are a known health hazard since they are not up to stipulated international standards

 “Counterfeit phones are made with cheap sub-standard materials and have been shown to contain dangerous levels of metals and chemicals like lead up to 40 times higher than industry standards,” says Mobile Manufacturers Forum (MMF) Secretary General Michael Milligan.

The MMF Secretary General, however, cautioned that other sub-standard fakes may not infringe copyright and appear to be legitimate competition to genuine models, but they are often produced without government approval, testing or certification and can quickly break down with potentially dangerous consequences.