Thursday, 11 October 2012

Kenya: We've switched off your fake mobile, get a genuine one

Get ready for the big switch off
If you asked this little Leo last week or so about Kenya and mobile technology, you would get at least two responses: home to 26,135,115 mobile phone connections in Africa and M-Pesa, a renowned innovative concept in finance. As for intellectual property (IP) and Kenya,  it only takes a few minutes for anyone to find out on this blog, for example, here, here and here. This Leo adds to his IP current affairs knowledge with this news (better late than never) that the Communications Commission of Kenya (CCK) has begun the fight against counterfeits within the telecommunications sector.

Switch off
Oh dear, they just did!
The widely anticipated switch off campaign by the CCK - in association with Safaricom, Airtel, Telkom, and Yu, supported by Nokia, Huawei and Samsung - has just come to past. According to this news report, it is estimated that around 1.5 million counterfeit handsets were switched off by the 30th of September deadline. Apparently, this campaign was particularly aimed at: tackling m-banking fraud; violence and protecting consumers from hazardous components. (Afro Leo wants to know how 3 million counterfeit mobile handsets made their way into Kenya in the first place. In respect of fighting crime, Afro Leo thought the CCK said that SIM registration was the solution?

Enabling legislation
You might wonder: where did the CCK derive the power to take this action from? Well, there is no need to look at the controversial Anti-Counterfeit Act and Regulation, rather, see the Kenya Information and Communications Act (KICA) - a wide-reaching 293-page legislation which affects different sectors. The main purpose of KICA is: "...to facilitate the development of the information  and communications sector (including broadcasting, multimedia, telecommunications and postal services) and electronic commerce, to  provide for the transfer of the functions, powers, assets and liabilities  of the Kenya Posts and Telecommunication Corporation to the Commission, the Telcom Kenya Limited and the Postal Corporation  of Kenya, and for connected purposes"; but it also, indirectly, protects IP right owners but also serves the overall interest of consumers. 

This Leo has not had the opportunity to review KICA in its entirety - and probably would not be able to anytime soon - but, a skim through reveals the following as the key legislation specific to this counterfeit campaign: The Kenya Communications Regulations, 2001, on page 114; The Kenya Information and Communications (Compliance Monitoring, Inspections and Enforcement) Regulations, 2010 (CMIE), on page 205; The Kenya Information and Communications (Consumer Protection) Regulations, 2010, on page 234;  and The Kenya Information and Communications (Importation, Type Approval and Distribution of Communications Equipment) Regulations, 2010, on page 258.

These are some of the interesting findings in KICA:
  1. The role and powers of the CCK shall also be guided by public interest principles including health, environmental and ICT infrastructure protection (see Regulation 5 of the CMIE); 
  2. Mandatory licencing for the supply of ICT equipment and services including for postal operators; 
  3. Approval of all ICT equipment including mobile phones with possible exemptions ;
  4. Offences for failure to obtain a licence and/or approval and breach of their terms; 
  5. Offence for posting article which infringes IP rights; 
  6. Obligation on broadcasters to respect copyright and allied rights; 
  7. Protection of the rights of domain name holders; and 
  8. The CCK shall also exercise its powers (such as this counterfeit campaign) if a complaint is made before it by any rights holder or their representative (Regulation 6 of the CMIE). ("Basically, Nokia can complain that it is losing revenues from counterfeit phones and the CCK will take action", says Afro Leo)
What about the poor?
In order to keep in line with the principles enshrined in Regulation 5 of CMIE, the CCK would also have to ensure that the poor sections of the population are not cut off from access to ICT and mobile services. How? This Leo is not sure to be honest. Perhaps, the CCK would have to: (a) encourage aggressive price competition to ensure affordability of genuine budget phones ("Yes, KICA contains anti-competition provisions too" says Afro Leo); (b) subsidise genuine mobile phones (Afro Leo says, "risky business") or (c) attract genuine mobile phone manufacturers into Kenya.

Yet another controversy for IP in Africa?
Some might argue that this campaign is a bit draconian for a developing country when compared with a developed country like Scotland which has opted for a more voluntary measure in its IP sensitisation campaign ("How many would voluntarily deliver up their essential counterfeit item"? asks, Afro Leo). Kenya is not the only country to have taken this step: Last year, the telecommunications regulator in the UAE did the same citing health and intellectual property (IP) rights concerns. ("At least, the government of the UAE was upfront with its reasons", says Afro Leo). This Leo also understands that this is an East African Community (EAC) wide initiative to combat counterfeits within the region, so other countries are expected to follow suit. It will surely be criticised by many who oppose IP laws and enforcement in developing countries - despite the fact that counterfeits are being targeted and not, for example, grey products.

Africa a dumping ground for counterfeits?
Counterfeiting is a worldwide problem that would never be eradicated when there are still, at least, a billion living on less than $1.25 per day globally (47.5% in Sub-Saharan Africa as of 2008). A World Bank statistics show that 43.4% of Kenya's population live on less than $1.25 per day as of 2005; while another source reveal that there are over 15 million poor people in its rural areas as of 2010. In such an environment, counterfeits will always thrive. 

If the continent is really a dumping ground, would you blame: (a) the governments for failing to curtail the imports in the first instance?; (b) the counterfeiters for satisfying a pressing demand; or (c) the millions of  consumers who cannot afford genuine products with their little disposable income?. 

Conclusion
 Fake drug: You're fake too & not approved to check me
Fake phone: Yes, but I'm useful in fighting fake drugs
Africa has the second fastest growing mobile markets in the world. From tackling health problems (here and here), to paving the way for new business modelsmobile technology is surely shaping and transforming the continent's future. With access to ICT/mobile technology increasingly becoming a necessity in today's world, this campaign may be seen as a denial of mobile access rights to the poor. If that arises, here is the dilemma: is it more important to put counterfeit mobile phones in the hands of the poor, than protect their health and/or environment? (Afro Leo wonders if anything we make use of (genuine or fake) in our daily lives is actually risk-free; and whether the government is really protecting IPRs owners or public health and environment)

It appears that the Kenyan government once appreciated the role and contributions of mobile technology in the country's socio-economic development by abolishing VAT on handsets in 2009. (Afro Leo adds that purchases went up by over 200% as a result). Therefore, in order to maintain the progress and momentum already achieved in the sector, the government should aim to mitigate the impact of this campaign on the poor. Ultimately, it is now the turn of genuine manufacturers to ensure affordable quality mobile phones for all who need it in Kenya. ("Afro Leo says: "other countries in Africa should learn from Kenya's experience before adopting a similar initiative. By the way, if your business happens to benefit in any way, shape or form, from the anti-counterfeiting efforts of the EAC, they would like to know here".)


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Which mobile phone brand is most environmental-friendly? see here and here
East Africa training hard to enforce IP rights, see here
Mobile phone boosts innovation in Kenya, see here
UNCTAD on Mobile Money for Business Development in East Africa, see here
CCK's press release refusing a further switch off extension, see here
Blackberry finds a home for revival and partner in Nigeria, see here and here
For the research repository on innovation in ICT in developing countries, see here
Apparently, counterfeits threaten the EAC single customs territory, see here
Nokia launches Asha in Kenya: the "affordable" budget smartphone, see here
Nokia serious about the environment with recycling projects in Africa, see here
Sadly, India's Essar Group plans to sell its stake in Kenya's Yu Mobile, see here
Presentations on telecoms equipment standards in Tanzania, see here and here
Despite the scourge of counterfeits, there is hope herehere and here 

2 comments:

Charles said...

The CCK's motivations seem unclear. What they have in essence done is act to block handsets whose IMEI number does not appear on the GSMA IMEI database. Not appearing on the database or bearing a duplicate number, and IP infringement may have some overlap, but they're far from the same thing. Apple, HTC and Samsung would dearly love to have their rivals' phones switched off on IP grounds. As quoted above, "the CCK shall also exercise its powers if a complaint is made before it by any rights holder". That would be fun.
The CCK also cites health issues, but again an IMEI number has very little relation to safety. One of the inherent problems is that the GSMA and bodies it authorises issue blocks of IMEI numbers to manufacturers. The GSMA is only a voluntary association and there seems to be a lack of a regulatory framework surrounding IMEI numbers.
When India started down this path a few years ago, they were shocked to discover 15,000 handsets with the identical number in one pilot area. With estimates of 25 million problem handsets, they had an amnesty whereby owners could, for a fee, be issued with a legitimate IMEI.
With Rwanda and TZ soon to follow, though not Uganda, it might be wise to see what benefits accrue from Kenya's big switch-off. After all the root of the problem is with some Chinese manufacturers, not with the end user.
Well, I'm off now clutching my KSh1000 to a River Road stall to get the IMEI numbers on my Nokla and Sumsang phones changed so that they work again.

Kingsley said...

Thanks, Charles, for the insight. I did come across this IMEI issue and as we know, technology is not infallible :-)