Once the MDMS is implemented, NTA can block smartphones that have been brought to Nepal without customs clearance. MDMS has been expected to end the import of ‘grey’ mobile sets as the authority can block such smartphones.
According to mobile phone importers, around 30-40 percent of the smartphone market in Nepal is of 'grey' handsets with about Rs 12-15 billion worth of mobile devices imported to Nepal illegally every year. The enforcement of MDMS has come at a time when there is a slowdown in the Nepali mobile phone market after the government restricted imports of handsets costing over $300 in April this year. The delay in the ineffective implementation of MDMS as well as a surge in illegal imports has posed serious issues to the domestic mobile phone market. "The MDMS implementation could provide some respite to us," said Deepak Malhotra, president of the Mobile Phone Importers Association. According to him, it is high time that the government enforces the mechanism effectively. "Last time, the government had not carried out the MDMS plan in full phase, so it was not that effective," said Malhotra, adding, "We believe the plan will succeed this time as they have done all the necessary homework." The domestic mobile phone business is currently going through a lean patch with a slowdown in demand as sales have fallen by more than 40 percent, say importers. According to them, mid-range phones dominate the market and even that segment is not doing well currently. They say it is the government that will also benefit from the implementation of MDMS as all types of imports will become legal and more revenue will be added to the state coffers. With the government imposing import restrictions on mobile phones above $300 for more than six months, the overall imports of mobile phones have declined by 51.24 percent in the first five months of the current fiscal year. Nepal has imported mobile phones worth Rs 11.20 billion in the first five months of FY 2022/23 compared to Rs 22.97 billion in the first five months of FY 2021/22. While the government has lifted import restrictions, mobile importers say it will take some time for the market to bounce back. What is MDMS? MDMS is a security system that enables the telecom regulator - Nepal Telecommunication Authority (NTA) to implement policies that secure, monitor, and manage end-user mobile devices. Once the MDMS comes into force, the entry of 'grey' devices into the market will be stopped as SIM cards on unregistered phone sets will not work. The NTA has built a centralized system that keeps a record of mobile phones after their International Mobile Equipment Identity (IMEI) number is registered with it. Every mobile phone has a unique 15-digit IMEI number. IMEI numbers of officially imported mobile phones are initially registered by the importing company. As per the law, the telecom regulator has to give a type approval for the phones before it is imported into the country. NTA looks at the lab report of the mobile phone sets. After a mobile phone has been manufactured, the company needs to obtain the IMEI number from the Global System for Mobile Communication (GSM). The importer will send the list of IMEI numbers to the authority, and the authority will verify it. The authority then checks the IMEI number with the data of the GSM. If it is found good, the authority provides a no-objection letter to the customs, and the customs office will check whether the mobile that has been imported is IMEI listed or not. This way, the system helps to ensure that genuine devices are imported. Once the phone is connected to the mobile network, the IMEI number is detected with the help of the system. If the mobile has not arrived through formal channels, then it will be blocked. So, to use a mobile phone, it needs to be registered. Customers who have purchased their sets from official dealers are not required to register their phones.
