A woman makes a call on an original mobile phone in Nyeri on Tuesday. CCK has bowed to pressure from telcos to call off blocking of fake phones as handset dealers called for subsidisation of original handset prices. Joseph Kanyi
The Communications Commission of Kenya (CCK) Tuesday overruled a decision by its immediate former director-general, Mr Charles Njoroge, arguing that the move was “drastic” and would spark consumer backlash.
“We at the commission think consumer awareness on the health risks and security need to be carried out first and measures should be put in place to curb their entry into the country,” said Francis Wangusi, the acting director-general at CCK.
He added that the regulator would only opt to switch off the fake handsets after assessing their impact on consumers who mobile operators reckon are largely unaware they are holding counterfeit mobile phones.
The four telcos–Safaricom, Airtel, Yu and Orange – had objected to the move, arguing they stand to lose revenues in a business environment where ongoing price wars have cut profits.
Steve Chege, Safaricom’s head of regulatory and public policy affairs division, said the move would hurt sales as Safaricom races to reverse the 12.4 per cent drop in profit posted in the year to March partly due the price wars.
The Anti-Counterfeit Agency (ACA) has raised concerns that Kenya loses nearly Sh3.2 billion annually through tax evasion and sale of counterfeit phones, a trade that is emerging as a money minting machine in downtown Nairobi and across major towns.
The lower prices of fake handsets—about a third of the cost of genuine handsets—have made them popular among consumers faced with strained purchasing power.
The cancelled directive was expected to shake up the handset retail market that has grown fast in Kenya’s urban centres as dealers move to boost their working capital to abide by the new dispensation.
Operators of mobile phone shops were also bracing for lower sales as consumers were expected to adjust slowly to the the costlier original handsets, setting the stage for massive job losses in a market dominated by counterfeits.
ACA says the war against fakes has been slowed down by the fact that they cannot make arrests unless they receive complaints from handset makers.
Mobile operators say genuine phones register both the IMEI code along with callers number on their systems while fake gadgets record only the caller’s details, making it easier to clamp down on counterfeits.
