Business Times

Lankan mobile phone vendors urge TRC to crack down on phone mafia

By Bandula Sirimanna

In the wake of new evidence of health hazards connected to poor quality mobile phones coupled with the flooding of sophisticated-looking but counterfeit and poor quality Chinese mobile handsets, Sri Lankan mobile phone vendors are urging the Telecommunication Regulatory Commission (TRC) to block the import of such phones or sue vendors who are selling it.

The mobile phones with fake or invalid IMEI (International Mobile Equipment Identity) numbers could be blocked from the networks of mobile service providers, easily as the TRC possessed all the IMEI numbers of handsets imported to the country, Shamzil Ramiz, chairman of Amgoo Telecom Lanka (Pvt) Ltd, a registered importer, told the Business Times.

A leading Sri Lankan ENT Surgeon said that several of these sophisticated-looking but cheap phones in the market emit levels of radio frequency radiations far higher than what is globally accepted as safe. He said that a large number of youth in the age group of 20- 30 years had sought treatment recently for hearing ailments and pain in the ear and neck after using cheap Chinese phones for a considerable period. According to international research studies there is now considerable evidence proving that microwave radiation from fake mobile phones and cordless phones causes brain tumors, disturbed brain function and other health disturbances. The reason is that their microwave radiation has harmful effects at intensity levels far below the prescribed limits.

Some of those fake phones can take two sim cards at a time, come with an extra battery and have very attractive functions, like touch screen. There is, however, ample evidence that those types of phones freeze very often, have relatively very short life spans of less than a year, and the batteries go dead in just months.

Mr Ramiz said that importers of genuine Chinese phones have been affected by the large scale smuggling of cheap phones without TRC approval. He noted that the importer should provide all the IMEI numbers of handsets imported by them to the TRC for registration. This means that people having unbranded (or Chinese) mobile phones without a valid IMEI number will not be able to use them on any of the GSM networks in Sri Lanka.

He noted that a clear directive should be issued by the TRC directing operators not to process and reject calls from mobile handsets with IMEI numbers not available in their updated database or without IMEI numbers. All the telecom operators should be directed to block such mobile devices. It is estimated that there is over million such phones in Sri Lanka, he added.

He pointed out that a genuine vendor has to submit a declaration of conformity certificate from the manufacturer or from accredited test laboratory stating that the product complies with health, safety, electromagnetic capability, efficient use of the radio frequency spectrum for the approval of the TRC. They will also have to submit a letter from a licensed cellular operator stating that the unit is compatible to operate in their cellular mobile net work. A sample of the mobile phone should be handed over to the TRC for testing purposes. He said that his company took at least 10 weeks to complete this process and get the TRC approval to import Amgoo Chinese mobile phones.

But at least 20,000 to 30,000 phones are being smuggled into the country by organized groups per month with connections to Pettah, Kurunegala and Panadura mobile phone traders and the authorities so far failed to take any legal action against them. This amount increases during the festive season of December and April.

He noted that China is the world’s mass producer of brand name cell phones including Nokia, Sharp, Apple, and RIM. But it also produces cell phones with no brand name that are often available for sale worldwide. So no one will be able to tell the difference between the phones produced in China for famous brands and of non brand types. He pointed out that China is also producing quality mobile phones which are not so cheap.

A senior customs official said they will confiscate mobile phones being brought into the island as accompanied or unaccompanied baggage or as a gift. He added that the importer of such goods would also be liable to penalties/forfeited under Section 129 of the Customs Ordinance. The action follows a demand by local mobile phone importers for strong law enforcement to combat illegal mobile phone imports into the country, he said.

TRC Director General Anusha Pelpita told the Business Times that conducting raids with the help of law enforcement authorities and blocking or locking fake mobile phones are impractical, although the TRC is seriously considering these two options. ‘The best way to tackle this problem is to reduce taxes and the government has already done it by bringing down the taxes to the level of 10% (from 15-16% earlier) on representations made by me,” he said. “So now we have to wait and see the developments,” he added.

Samantha Rajapaksa, Director/ Chief Executive Officer of Softlogic Cmmunications, an authorised dealer for Nokia phones in Sri Lanka, said the TRC and the ustoms are taking several initiatives that will help in combating the grey market in Sri Lanka.

The government is losing a large amount of tax revenue due to these illegal channels, he said. The revenue loss was around Rs.1 billion in 2009 comparing to 2008 as there was a reduction in the import of handsets last year. Chinese phone imports were at a zero level during this period. But the market was flooded with fake Chinese mobile phones due to illegal imports, he said. He noted that genuine mobile phone importers had to pay around 15% to 16% taxes.

He appreciated government measures to reduce taxes, which will help in curbing smuggling to a great extent. Dinesh Anthony, Sales Manager of Abans Office Automation, a dealer for several mobile phone brands, said over 80,000 smuggled hand phones from Dubai, China and India are entering the country through illegal channels every month. Customs, he added, has failed to take any legal action against these mobile phone smugglers.

"These illegal phone imports badly impact on our business too," he said. He urged the TRC to conduct raids with the help of the police in the Pettah market and seize all fake phones which are being sold by vendors without any warranty to customers.

He added that his company imports around 10,000 mobile phones per month with TRC approval. TheTRC should monitor operations of these fake mobile phone smugglers through the strong implementation and enforcement of the law, Mr Anthony said. He noted that the Customs has a responsibility to crack down on this mobile phone mafia.

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