NTA finally, totally, seriously “confirms” that MDMS will go live next month

But take this news with a pinch of salt anyway

MDMS Import Module From Bhadra Nepal Mobile Device Management System
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At the budget announcement of 2078/79, the then Finance Minister of Nepal Mr. Bishnu Prasad Paudel announced that Mobile Device Management System (MDMS) will go live from Shrawan 1, 2078. However, NTA (Nepal Telecommunications Authority) later referred to it as a soft launch. And the proper system was then set to become live on Bhadra 15, 2078.

Clearly that didn’t happen either, but NTA has once again confirmed that MDMS will now go live from Bhadra 15, 2079. Exactly a year after it was “confirmed” to be put into operation.

At an event held yesterday (Shrawan 27, 2079) in the presence of officials from NTA, MPIA (Mobile Phone Importers Association), NMDA (Nepal Mobile Distributors Association) and other concerned authorities, NTA has seemingly assured that MDMS will be implemented in Nepal by next month at last.

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Mobile Device Management System (MDMS) in Nepal

The sale of smartphones through the grey market has been major a problem in Nepal for a long time. If you’re unfamiliar with the term, the grey market basically refers to the distribution/sales of official goods via unofficial channels. As a result, the government misses out on potential revenue while the official importers lose their business.

To nullify this problem, Nepal Telecommunication Authority made IMEI registration mandatory. And for the same purpose, MDMS is set to be implemented in Nepal. It was initially proposed to go live from Jestha 2078, however, it was delayed—owing to the second wave of COVID-19. Furthermore, after the budget announcement, it was dated to launch from Shrawan 1st.

Smartphone IMEI

However, the implementation of MDMS maxed out only on IMEI registration. Things appeared to have taken a turn as NTA, Customs Departments, and the Mobile Phone Import Association (MPIA) representatives sat at a meeting on Bhadra 1, 2078 for the launch of MDMS.

Outcome

The meeting concluded to bring the Import-Module of MDMS into operation within Bhadra 15, 2078. All the attendees agreed to complete the tasks related to server management of MDMS. In addition, users with unregistered handsets were planned to be given two months of registration deadline and to be notified via SMS.

In case one doesn’t register his/her device in the system, they will not be able to use SIM in such devices. Likewise, NTA decided to integrate the customs department into the “Nepal National Single Window” system within a month, for services including import permission of mobile handsets.

Register your handset’s IMEI at NTA

To ease up things, you must register your device IMEI in NTA’s portal.

  • In order to enroll your phone in the database, click here.
  • After submitting the application, you’ll receive an email acknowledging your request for IMEI registration.
  • Once NTA completes the background study, it will either dis/approve the application.
  • To check if your phone is registered, you can visit this link.

Here, NTA made IMEI registration compulsory in April 2016. It had even been said that the phones with unregistered IMEI numbers would become dysfunctional from April 1, 2017. However, citing various reasons, the organization chose not to take the action.

Yet, the online IMEI registration system has not completely nullified the problem. Thus, to do so, NTA planned to implement Mobile Device Management System (MDMS) in the country. We had been hearing about its progress in bits and pieces every now and then with vague info regarding its inevitable availability.

So, what happens next?

After the implementation of MDMS, illegally bought mobile phones will no longer be operable. Therefore, we hope it will effectively put an end to the sale of smartphones from illegal channels.

So if you’re planning on buying a phone through channels means in Nepal, rethink your move.

MDMS is a centralized government-owned system to keep a record of any and all phones and similar electronic accessories that enter the country—via their unique IMEI number(s). This includes smartphones, feature phones, bar phones, tablets, etc. So, any gadget with SIM, basically. After its implementation:

  • Phones not registered at NTA (illegal/grey imports) will be blocked from any and all carrier networks in Nepal.
  • This means that you will be able to use other functions of the phone like connecting to WiFi, streaming videos, etc. but making/taking phone calls and messages won’t be possible.
  • Think of it as iPhone vs iPod Touch. iPhone is how your unregistered device is right now while it’ll transform to iPod Touch once MDMS goes live. No cellular connectivity while everything else you’d expect from a smartphone will work perfectly fine.
  • And if and when you lose such phones, you won’t be eligible to file a police complaint either. Moreover, because you’re using an unregistered device, you will be subject to punishable actions as per the existing regulation.

How did Mobile Device Management System (MDMS) in Nepal come to be?

This project was initiated back in 2018 and tendered to OSI Consultancy (India), Numera SDN. BHD. (Malaysia), and Namaste Global Communications (Singapore). The cost of building this system is estimated at a little over 7 million USD. As you’d expect, this system will only recognize those imports that have followed due diligence and allow their operation.

All the official smartphone distributors/importers will register their devices in MDMS. But, illegally imported devices will be effectively blocked from any national telecom operator’s network. And, as I mentioned earlier, the parties involved in such activities will also be subject to legal action as defined by the existing regulation.

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In the case of smartphones gifted from abroad, you will have to pay a nominal fee to register them into the system. However, the exact amount or percentage is unknown as of yet. You can read the full MDMS bylaws set by NTA here.

Furthermore, the Mobile Device Management System will also let you track your device in case of loss/theft. All in all, the introduction of MDMS is exciting news for the Nepalese smartphone market. Not just the distributors, it will also be massively fruitful for the end customers.

Why IMEI registration in Nepal?

Currently, mobile importers have to pay 13% VAT and 5% excise duty on mobile imports. Furthermore, the government has reduced the percentage of VAT return to 0% this year. Thus, it is not surprising that the smartphones bought from the grey market come at a cheap price since they effectively skip paying both fees.

According to NMDA, the grey market covers around 25% of the overall smartphone market in Nepal. Right now, there is an increase in the demand for mobile phones.

Record volume of smartphone imports

The latest report from Customs Department says that 5.63 million phones worth Rs. 39 billion were imported in the first 11 months of the fiscal year 2078/79—the highest ever (in terms of valuation, not quantity) in the history of Nepal.

To compare, the volume of smartphone imports amounted to just Rs. 32.09 billion during the entire fiscal year 2077/78. As you could tell, this 21.53% increment is big news for Nepal’s smartphone industry and an indicator of the efficacy of IMEI registration to discourage grey imports.

Moreover, monetary transactions via smartphones have increased too. Because of this, leaving the smartphone grey market unchecked will only result in its growth due to high demand. And this is a serious concern for the official distributors. Therefore, NMDA is desperate for the implementation of the MDMS.

Not only that, MPIA and NMDA have been slapping holograms in the phone’s box to help customers identify official imports. So we hope the problem of mobile sales through the grey market will go away soon.

MDMS will supposedly go live in Nepal from next month but…

However, even after a year since its launch announcement, the MDMS deployment was a no-show. Its implementation was left to declaration only. And the recent hike in excise duty from 2.5% to 5% on smartphones just gave the grey market yet another push. All of this leads us to an easy conclusion that NTA’s incompetence has hurt the domestic smartphone industry immensely.

Last year, an NTA source even stated that the implementation is only for the show since the necessary resources, ranging from manpower to infrastructure, are not yet available. But now, the authority in charge has yet again assured the system’s inauguration by next month.

Considering the “the boy who cried wolf” or the “हात्ती आयो, हात्ती आयो, फुस्सा!” character that NTA has established for itself, we can’t say we’re 100% convinced that MDMS will actually go live starting Bhadra 15. We certainly hope that it’s true and wish all the luck to everyone involved, but we’re taking this confirmation with a pinch of salt anyway.

  • Watch: MDMS in Nepal Explained (Nepali)