The tug of war between handset dealers, mobile service providers, the Communications Commission of Kenya (CCK) and other government agencies continues. Blame has been shifted round the circle after the CCK send a letter to mobile providers asking them to switch off mobile devices that could not be identified through a distinct International Mobile Equipment Identity (IMEI). The IMEI - usually revealed by dialing *#06# on GSM (Global System for Mobile Communications) devices - is used by mobile providers to identify specific handsets, their make and model. This enables mobile providers to enable certain network and security features, such as automatic Internet settings. However, there has been an influx of devices that have no genuine IMEI in the world. Such devices, usually from China consist of mostly counterfeit devices manufactured to imitate popular devices such as Nokia, Samsung. Other devices that lack genuine IMEIs are usually sub standard devices looking to cut on the cost of production hence undercut on the device costs. The devices usually share a generic IMEI in the form 1234... or share a common IMEI between thousands of devices. Radoslow Kedzia, Huawei Africa Regional Chief Technology Officer says that the problem is compounded in some devices that have software that auto-generates what could be valid IMEIs periodically. Other devices use IMEIs from dead phones. Information provided by CCK based on returns from all mobile operators and on statistics from GfK which tracks mobile sales in the country shows that devices with fake IMEIs account for 9.39% of mobile handsets in Kenya. Safaricom, Kenya’s leading mobile network says that it has more than 500,000 unidentifiable devices in its network.  It is estimated that counterfiet devices in the country number up to 3 million. According to statistics released by the CCK in May this year, Kenya has 24.96 Million mobile subscribers. The CCK is moving to clamp on such devices by asking mobile providers to bar such devices on the network.

While devices that imitate known device manufacturers are out-rightly considered counterfeit, there is debate on the classification of non-standard devices that bear their own brand names, or slight variation of known devices in an effort to mislead customers. Common brand names include Nokla, Svmsvng, Phone, Hi-Phone, Block Borry which are made to imitate Nokia, Samsung, iPhone and Black Berry devices. All devices with tampered IMEIs are generally classified as counterfeit.
Such devices also fail to undergo CCKs type approval process - the regulator says it is illegal to offer mobile services to unapproved devices. In addition, CCK says that counterfeit devices cannot be tracked and blocked once lost or stolen. In addition, such devices make it convenient to use for criminal activities and put others in risk especially with the popularity of mobile commerce and mobile payments. There are more than 13 million mobile money consumers in Kenya.
Francis Wangusi, CCK Acting Director General says, “It is an offence under the law to change the identity or interfere with the operations of a mobile telephone handset. Those found guilty of this offence are liable to a fine of up 1 Million shillings or imprisonment for a term of up to 5 years or both. Similarly possession of reprogramming equipment is in itself a crime, attracting a fine of up to Ksh 1 million, imprisonment for a term of up to five years or both. Those engaging in this kind of business should, therefore, stop forthwith before law enforcement agencies catches up with them.”
It is estimated that 1 in every 5 mobile devices in the world is counterfeit with majority of those found in Africa, Asia and South America. Stephen Mallowah, Executive Director at the recently established Anti-Counterfeit agency says that in 2008, an estimated 150 million or 20% of the 750 million handsets produced in China were counterfeits or pass-offs. 51 million of these were sold in China while the other 99 million phone were sold to foreign markets. This was in a speech read on his behalf by Dr John Akoten, Deputy Director – Research & Awareness at the Anti-Counterfeit Agency in a Half Day workshop hosted by Safaricom. The workshop also included several manufacturers including representatives from Samsung, Huawei and LG.
“It is estimated that the Nigerian economy lost an estimated USD 225m (N33.75bn) to counterfeit electronics and software piracy alone in 2010. The country remains one of the biggest dumping grounds for Chinese counterfeit mobile phones, among other products,” says Mallowah. The Anti-Counterfeit Agency says that Uganda estimates that the government loses USD 9 million (Ksh. 810 million) every year in tax revenues when people buy counterfeit mobile phones. Despite an 8% drop in the sales of black market phones in recent years, there are still 100,000 units being sold in Uganda every single year – a figure that represents 32% of the total mobile phone sales.
The Anti Counterfeit agency says that it has been receiving many complaints of counterfeit devices from consumers. However, Akoten says that the board’s mandate is to receive complaints from infringed parties. In addition, the board has no way of establishing counterfeit devices with the help of infringed parties. Akoten says that they were seeking help from device manufacturers in the country to assist in the matter.
Counterfeit phones also compete unfairly against mainstream devices. They have a lower cost of production due to lack of quality control, substandard manufacturing and low cost of manufacture.Some traders are said to prefer such devices due to their high mark ups when sold at similar pricing to genuine brands.
The substandard manufacturing places consumers at health risks due higher radio waves emission from the devices and risk of explosion from sub-standard batteries.
The Safaricom legal team says counterfeit devices usually develop common issues causing burden to their customer support department. The phones often do not support Unstructured Supplementary Service Data (USSD) and keep losing data connectivity settings. In addition, the phones break down and the users present them to Safaricom shops for repair, despite not purchasing them there.
However, mobile operators, led by Safaricom, are in opposition of the order to immediately bar such phones from the network. The operators says that such an action would catch most of the users of counterfeit phones unaware - most users are not ware that they are using counterfeit devices. This would leave most of the consumers without a device as most have purchased the devices using the savings. In addition, mobile operators would find themselves facing consumer backlash from such an action.
Mobile handset manufacturers and mobile operators are throwing the ball back into the government’s court - saying that it is the government’s role to ensure such devices do not get to the market. They say that dealers in such devices are well known - including spots in downtown Nairobi where devices IMEI can be tampered with. LG’s Kamau Ngeru says that the CCK type approval process is not even clear to manufacturers on whether it applies to major model numbers or to every model.
A source confided to CIO East Africa that manufacturers had gone as far as placing agents to monitor ports of entry for counterfeit imitations. The source says that the investigation did not bear fruits as the devices are brought into the country as parts and assembled into phones in residential areas. The assemblers go as far as offering one the luxury of “choosing” what brand they would like the device to be.
CCK is set to meet with mobile operators to discuss the way forward.
The mobile operators recommend that an awareness campaign on such devices ought to be carried out together with a strategy focusing on the supply chain. Switching off counterfeit devices would unfairly punish unsuspecting users.