At the budget announcement for the fiscal year 2078/79 held yesterday, Finance Minister Mr. Bishnu Prasad Paudel announced that Mobile Device Management System (MDMS) will be implemented from Shrawan 1, 2078 in Nepal. This system will help control the illegal import of smartphones in Nepal.
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, 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 (NTA) made IMEI registration mandatory. And now for the same purpose, the Mobile Device Management System will be implemented in Nepal. Actually, MDMS was already supposed to go live from Jestha 2078.
Speaking at an event held for the 23rd anniversary of NTA, Mr. Purushottam Khanal (Chairman, NTA) had announced the implementation of MDMS from Jestha. However, the second wave of COVID-19 seems to have posed an issue with this timetable.
Register your handset’s IMEI at NTA
To facilitate this process, NTA had started online IMEI registration to make things easier for the users.
- 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 had made IMEI registration compulsory in April 2016. It had even 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 had been planning on implementing Mobile Device Management System (MDMS) for quite some time now. We had been hearing about its progress in bits and pieces every now and then with vague info regarding its inevitable availability.
And now, the official announcement during the budget speech for the fiscal year 2078/79 has finally provided the exact date as to when the system will go live: Shrawan 1, 2078 (July 16, 2021).
So, what happens next?
Anyway, after the implementation of MDMS, illegally bought mobile phones will no longer be operable. Therefore, 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.
Here, 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 connect to WiFi, stream videos, etc. 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 the 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 like I mentioned earlier, the parties involved in such activities will also be subject to legal action as defined by the existing regulation.
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 policy regarding this is still in the works. So the nitty-gritty details will go public in the coming days.
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 fruitful to the end customers.
Why IMEI registration in Nepal?
Currently, mobile importers have to pay 13% VAT and 2.5% 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 Nepal Mobile Distributors Association (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 6.35 million phones worth Rs. 32.09 billion were imported in the first 10 months of the fiscal year 2077/78—the highest ever in the history of the country. And considering this happened during an active pandemic, the impressiveness of this record becomes exponential.
To compare, the volume of smartphone imports amounted to just Rs. 14.68 billion during the same time period the year before. As you could tell, this 2.18x 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, Mobile Phone Importers Association (MPIA) and NMDA have been slapping holograms in the phone’s box to help customers identify official imports. So hopefully, the problem of mobile sales through the grey market will go away soon. However, it all depends upon the level of implementation from NTA.
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