Every year, the government loses around Tk3,000 crore due to illegal entry of mobile phones to the market
If you got your mobile phone on a trip abroad, or as a gift from your friend or family living abroad, or bought it from the local grey market, you will not be able to make or receive calls soon.
Your trendy and fancy mobile phone would turn useless as the Bangladesh Telecommunication Regulatory Commission (BTRC) is hardening its measures to take such phones out of network service.
The authorities are working to crack down on the illegal mobile phone market to boost revenue collection and to protect the interests of local mobile assemblers and manufacturers, said a BTRC source.
The regulatory authority has already prepared a database of legal devices, and is now working to set up the country's first National Equipment Identity Register (NEIR), a central system that will enable the authorities to disable illegal mobile devices.
The regulatory body is also sending text messages to all mobile users, instructing them to check the legality of their phones.
Currently, the government imposes 57% tax on imported smartphones, and 32% on basic and feature phones. On the other hand, tax on locally assembled and manufactured handsets is 18% and 13% respectively.
However, if handsets enter the country through illegal channels, the government loses a large amount in the form of import duties and taxes.
Every year, the government loses around Tk3,000 crore due to illegal entry of mobile phones to the market, said an officer at the spectrum department of the BTRC.
According to the Bangladesh Mobile Phone Importers Association (BMPIA), the current market size of mobile phones is around Tk12,000 crore, and around 3.60 crore handsets are sold legally every year.
Around one crore mobile phones enter the country through illegal channels annually, according to the BTRC.
Apart from the government, legal importers and manufacturers also face losses because of phone smuggling, said Mesbah Uddin Ahmed, chief marketing officer of Fair Electronics, the local manufacturer of Samsung handsets.
"We are losing the market to smugglers as they are selling phones at cheaper rates. But we cannot sell at their prices due to taxes," he added.
Besides, smugglers also bring refurbished or reconditioned phones which hurt the brand's reputation, explained Mesbah.
He said most of the illegal phones come from the Middle East and Singapore.
According to the BTRC, 11 companies have obtained registrations to manufacture and assemble phones in the country, and nine of them are now in operation.
These companies have a capacity to produce handsets that will meet 70% of the local demand. However, 90% of the feature phones are still imported.
Database of legal phones
In the beginning of last year, the telecom regulator launched the first database of International Mobile Equipment Identity (IMEI) numbers of mobile phones in a bid to curb illegal import.
So far, the IMEI numbers of 3.35 crore handsets, all imported last year, have been stored in the database.
From the database, customers can check the legality of imported handsets simply by sending an SMS.
Customers intending to buy a device can get the 15-digit IMEI by dialling *#06# from any handset. To check the authenticity of this number, customers need to type KYD<space>15-digit IMEI number in the message box and send it to 16002. A return SMS will confirm whether the device was legally imported or not.
IMEI numbers of the new imported devices will be added gradually, said Md Zakir Hossain Khan, senior assistant director (media and publication wing) at the BTRC.
NEIR to disconnect illegal devices
Due to a lack of infrastructure, the BTRC has not yet been able to disconnect illegal phones. They can only give buyers information on whether their phones were legally imported or not.
The BTRC floated a tender in March looking for contractors to install the NEIR. The disconnection of phones will be enabled after the system becomes operational.
Md Jahurul Haque, chairman of the BTRC, told The Business Standard that dozens of companies participated in the bid and four of them have qualified. Now the committee is evaluating their documents.
With this infrastructure in place the regulatory body will be able to disconnect illegal phones from mobile networks.
Officials said the tender is now under evaluation, and a contract will be signed with the qualified bidder soon.
After the incorporation of the NEIR, local mobile phone producers and importers will be submitting the IMEI information to the BTRC, which will be matched with the available mobile phone in the network.
If the IMEI number of any device does not match with the BTRC's data, the device will be disabled, said the media and publication wing of BTRC.
A highly placed source informed The Business Standard that there will be a guideline for the illegal phone sets that are already active in the network and those will enter into the system in the post-NEIR incorporation period.
The guideline could include an IMEI registration process, the source added.