Sourced from: NepaliTelecom.com.
In the coming fiscal year, the government will reduce the use of grey phones by installing MDMS (starting from Shrawan, 2078). This long-awaited NTA project will finally be realized to its full potential.
According to the declaration in the budget for the upcoming fiscal year 2078/79, the Nepalese government will ban unlicensed phones on Shrawan 1st, 2078.
For years, so-called grey phones have harmed the government’s revenues and undercut telecom policies. However, the government has now set a deadline for when those phones would no longer be usable for telecom purposes.
The Case Of Grey Phones
Grey phones are on the loose in Nepal. People are using them in an uncontrolled and unregulated manner. However, the Nepalese government is finally preparing to address the issue. As previously stated, the government will install MDMS (Mobile Device Management System) via the NTA Project over the next few months. It has been a long-awaited plan that will finally come to fruition.
Grey phones are unlicensed electronics that people bring back from overseas. Furthermore, they do not pay all of the import duties. As a result, you may be able to obtain these phones for a lower cost.
Due to Nepal’s wide borders, people smuggle phones into the nation from India. They avoid customs and sell them for a lower price within the country. Some of the phones could be big volumes of stolen phones from neighboring countries.
Second, persons working overseas bring in a huge number of such phones each month. Such phones are widely available in Nepal’s major towns, particularly in border areas and big cities where authorities are not present. Grey markets are locations where such phones are bought and sold.
Nepal imports approximately one million phone sets per month. 2,50,000 of those phones are still unlicensed. According to Onlinekhabar, this costs the government roughly NRs. 7 billion a month.
“The government would establish a whitelisting program through MDMS within three months,” stated Mr. Purushottam Khanal, Chairman of Nepal Telecommunication Authority. Once the MDMS is completely operational, every phone will be functional (in terms of mobile networks) only after it has been registered with the NTA.”
Grey phones are widely available and widely used throughout the country. “The problem requires a broader approach,” stated Mr. Binod Lamichhane, an Inland Revenue Officer at Naya Sadak.
Meanwhile, Mr. Shambhuprasad Marasaini, customs chief at Tribhuwan International Airport, stated that “2,000 individuals land in Nepal every day.” More over half of them had mobile devices with them. In Nepal, they are not authorized to use.”
Furthermore, “open borders have made it easier for people to circumvent customs at checkpoints.” People cross borders to save money on phones and other necessities.” Mr. Ganesh Khada Magar, DIG of the Armed Police Force, stated.
What Is MDMS Going to Do With Your Grey Phone?
When the MDMS system kicks on, it has a number of effects on your grey phone. Consider the following scenarios:
- First of all, your existing grey phone will not be operational for telecom services from Shrawan 1st.
- In case such a phone is lost, one cannot lodge a police report for it. If one does, the chances are they will find themselves in jeopardy for using an unauthorized set.
- Your grey phone will be blocked out of any carrier network in Nepal. It will not be compatible with any telecom network from Nepal in the future.
- Since the unauthorized phone does not receive any signal, its utility will be a bare minimum. You cannot avail of any telecom service and the device becomes almost useless like a brick.
A grey phone, on the other hand, avoids government registration, taxation, and regulation. The black marketeer or smuggler enters the country through unauthorized routers and distributes such phones widely. The general populace buys them because they are inexpensive, not recognizing the greater risk they entail. It eventually raises the moral question of whether one should use an illegal phone at all.
During the Pandemic, Grey Phones Were ‘Invisible.’
According to Mr. Deepak Malhotra, chairman of the Mobile Phone Importers’ Association, “the ratio of legitimate and grey phones was even in the 75/76 fiscal year.” During the COVID-19 epidemic, however, it dropped to zero.” He arrives at the conclusion that open borders are to blame for smuggled phones in Nepal.
Is a High Tax Encouraging the Grey Market?
Mr. Dinesh Chulpadho, Chairperson of the Nepal Mobile Distributors Association, has stated that the government is already too late to curb the grey phone market in Nepal. He feels that the high cost of mobile devices is contributing to the spread of unlicensed phones in Nepal.
Even after currency conversion, the same mobile gadget costs cheaper in India than in Nepal. Those living near borders would rather take chances and buy phones in India to avoid the authorities. They circulate these phones in Nepal because consumers always choose devices at a low cost if they are available.
To deter phone smuggling, the chief suggested that the government reduce the tax burden on gadgets. He argued that the VAT on mobile devices raised the price of mobile phone devices in the country. “Exempting mobile phones from VAT will aid in the reduction of grey phones in the country.” He proposed.
Concerning the Mobile Device Management System (MDMS)
MDMS is an abbreviation for mobile device management system. The system keeps track of every mobile phone in Nepal, as well as their locations. When this system is fully operational, authorities will be able to track down unlawful devices and block them from using any mobile network in the country.
MDMS has been in the news for quite some time. It has been on the Nepal Telecommunication Authority (NTA(NTA) )’s (NTA) (NTA) (NTA) (NTA) (NTA) (NTA) (NTA) (NTA) (NT Despite the fact that a centralized database of all phones was imagined many years before, the MDMS was coined in 2018 as part of an NTA initiative. But the outcome never came to fruition. Mobile importers in Nepal have also expressed concern about the impact on business. As a consequence, all parties involved were on the same page. As a result, the NTA chairman stated the government’s intention to deploy MDMS within three months, and we now have official confirmation from the government.
The Advantages of Using MDMS in Nepal
For the time being, the government registers mobile phone IMEIs. However, this method has to be improved because it has not been proportionate in addressing mobile phone-related difficulties.
However, with the introduction of MDM, it will retain a record of every phone. This will aid in maintaining accurate data on mobile phones that enter the nation legally. In the instance of stolen devices, the owner can request that the device be blocked directly. Owners must currently go through the inconveniences of first filing an application with the police, then contacting the NTA to locate their phones.
The Mobile device management system, also known as the Centralized EIR system, will benefit everyone, including the government, traders, and mobile phone users. It will reduce the availability of unlicensed phones in Nepal, hence restricting the grey phone market. The government will earn more money at customs, and owners will be able to ensure the legality of their equipment.
Do you believe the NTA/Government will adopt MDMS within the timeframe specified? What are your thoughts on Nepal’s tax plan on phone imports? Do you believe it contributes to the high proportion of grey phones imported? Please share your thoughts in the comments box below.