Presentation is loading. Please wait.

Presentation is loading. Please wait.

Geneva, Switzerland, 17-18 November 2014 Regulatory procedures and solutions for protecting the market against counterfeit/substandard terminal equipment.

Similar presentations


Presentation on theme: "Geneva, Switzerland, 17-18 November 2014 Regulatory procedures and solutions for protecting the market against counterfeit/substandard terminal equipment."— Presentation transcript:

1 Geneva, Switzerland, November 2014 Regulatory procedures and solutions for protecting the market against counterfeit/substandard terminal equipment in Ukraine Dmytro Protsenko, Deputy Director, Radio Service Directorate, Ukrainian State Centre of Radio Frequencies, Combating Counterfeit and Substandard ICT Devices (Geneva, Switzerland, November 2014)

2 Geneva, Switzerland, November Content Growing problem of counterfeit products Special concerns over mobile phones Negative impact of counterfeit and substandard mobile phones Measures of administrations and regulators Situation on mobile terminal’s market in Ukraine as of 2008 Mobile terminal’s import and registration procedures in Ukraine (legal basis, implementation) Benefits of regulatory procedure implementation Conclusions and Recommendations

3 Geneva, Switzerland, November Growing problem of counterfeit products Total value of internationally traded counterfeit and pirated products: $200 billion, $360 billion, 2015 – estimated up to $960 billion – BASCAP Report “Estimating the global economic and social impacts of counterfeiting and piracy”, Frontier Economics, February : One of the first reported cases of counterfeit products in the IT industry (remarking Intel’s Pentium II Processors) – BRIDGE Report “Problem- Analysis Report on Counterfeiting and Illicit Trade”, : 8% to 10% of all goods in IT industry sold worldwide was counterfeit - Alliance for Grey Market and Counterfeit Abatement (AGMA), 2006

4 Geneva, Switzerland, November Special concerns over mobile phones Worldwide combined shipments of mobile phones for 2015 are estimated to exceed 1.9 billion units – Gartner (October 2014) Shanzhai (literally “bandit”) phones constitute an estimated 15-20% of the global market in terms of units sold and about $9 billion in revenue – EC Study on internationalisation and fragmentation of value chains and security of supply (February 2012) Source: Gartner (October 2014)

5 Geneva, Switzerland, November Special concerns over mobile phones Figures may differ but they are impressive: One out of every five cellphones sold in the world are illegal or unlicensed copycats – Nokia, 2011 Shipments of gray-market China-made cellphones reached their peak in 2011 with a total of million - IHS iSuppli, July 2013 White-box sales exceeded 360 million units in 2010 – Gartner, February 2011

6 Geneva, Switzerland, November Negative impact of counterfeit and substandard terminal equipment GOVERNMENT - loss of revenue due to non-payment of customs duties and sales taxes - need of additional measures to ensure a compliance with national regulations (import, sale, certification, changing the IMEI etc.) - danger to public security (phones with invalid IMEI or “no IMEI” number are potentially attractive for criminal activity and terrorism) - lost workforce USER - low quality (performance degradation, high % of dropped calls, access failures, handover problems) - low reliability - failed warranty and technical support - potential hazard to health (use of hazardous substances, higher SAR, batteries’ explosion etc.) - security and privacy issues (in cases of theft or stolen phone, it is difficult to track the phone with invalid IMEI or “no IMEI” number) INDUSTRY - losses for right’s holders (unfair competition, loss of sales, price may be affected, copyright and trademark infringement, adverse effect on brand value and reputation) OPERATOR - lowering QoS of mobile telecommunication services (loss in voice and data capacities, data transmit speeds, reduced coverage) - potential interference and EMC problems - need of expensive and unnecessary technical measures (more antenna installations, base stations and the need of more spectrum) Negative impact

7 Geneva, Switzerland, November All regions are affected IHS iSuppli forecast for gray-handset markets for 2013 showed a significant negative impact in all regions: Asia-Pacific (India, Vietnam, Thailand, Pakistan, Indonesia, the Philippines etc.) million units Middle East and Africa (Nigeria, Turkey, Egypt, Iran etc.) million units Central and Latin America million units countries in Eastern Europe also are major target markets Source: ARCchart

8 Geneva, Switzerland, November Measures of administrations and regulators - AZERBAIJAN Mobile Devices Registration System, based on IMEI codes database, has been operated under the Ministry of Communication and Information Technologies since May 2013 aimed to prevent the use of illegally imported phones, phones with "broken" IMEI codes, lost or stolen phones all imported mobile devices must be registered within the first 30 days over 13 million devices are registered now

9 Geneva, Switzerland, November Measures of administrations and regulators - COLOMBIA In 2011 the Ministry of Information and Communication Technologies issued Decree 1630 for the purpose of establishing mechanisms aimed at controlling the marketing and sale of both new and used terminal devices and creating two types of centralized databases, one that has a registry of the IMEI numbers of terminal devices reported stolen or lost, and preventing their use or activation, and another with a registry with a record of the IMEI numbers for terminal devices legally imported or manufactured in the country and associated with an identification number of the owner or subscriber

10 Geneva, Switzerland, November Measures of administrations and regulators - EGYPT In 2010 the National Telecommunication Regulatory Authority established the Central Equipment Identity Register with aim to curb the handsets with illegal, fake, null and cloned IMEIs, combating handsets theft and address the health and safety concerns 3.5 million mobile handset with illegal IMEI code ( ), handsets with cloned IMEIs, handsets with fake IMEIs, with all zeros IMEI, and without IMEI code

11 Geneva, Switzerland, November Measures of administrations and regulators - INDIA 2004: Telecom Regulatory Authority of India initiated a consultation in order to curtail the illegal handset market, discourage handset theft and protect consumer interest 2009: Government of India banned services on mobile handsets without IMEI number after Up to 25 million mobile handsets were estimated to become ineffective 2012: TRAI advised about a need of common database to be available across customs check- points in India so that duplicated/fake/ non IMEI mobile devices are not allowed to enter the country 2014: The Telecom Department plans to put in place an online database of IMEI numbers of imported GSM phones in circulation in India

12 Geneva, Switzerland, November Measures of administrations and regulators - KENYA In 2011 the Communications Commission of Kenya gave a notice to all mobile network operators to phase out counterfeit handsets on their networks. As a result, 1.89 million counterfeit mobile phones were phased out after 30th September 2012 A handset verification system was established to enable subscribers to verify the validity of their phones through submitted IMEI. As well, a system for blocking counterfeit handsets within the mobile networks was implemented

13 Geneva, Switzerland, November Measures of administrations and regulators - SRI LANKA With the aim to curtail the counterfeit mobile phone market, discourage mobile phones theft and protect consumer interest, the Telecommunications Regulatory Commission of Sri Lanka intends to implement National Equipment Identify Register (NEIR) that connects to the IMEI databases and/or core networks of all the mobile Operators. NEIR acts as a central system for all network Operators to share black listed mobile terminals

14 Geneva, Switzerland, November Measures of administrations and regulators - TURKEY In 2006 the Information and Communication Technologies Authority established the Central Equipment Identity Register (CEIR) with aim to prevent the usage of non-registered mobile phones, tax loss, unfair competition in the sector, hijacking as well as automating the importation processes 131,836,847 IMEI numbers which are legally registered and 14,308,239 IMEI numbers which were included in black list due to being lost, smuggled, stolen and cloned as of the end of 2010

15 Geneva, Switzerland, November Measures of administrations and regulators - UGANDA The Uganda Communications Commission (UCC) has embarked on the implementation of a project that aims at the gradual elimination of counterfeit mobile phones from the Ugandan market A study certified by the UCC indicates that about 30% of Uganda’s estimated 17 million mobile phones are Chinese-made counterfeits The government loses about Shs15 billion in tax revenue to fake or counterfeit mobile phone dealers

16 Geneva, Switzerland, November Situation on mobile terminal’s market in Ukraine as of 2008 Legal import of mobile terminals constituted 5-7% of the market in Ukraine as of 2008 Counterfeit / substandard mobile terminals constituted a substantial part of contraband import 93-95% of consumers used the mobile terminals of unknown origin, which had not been tested on conformity to the Ukrainian standards for: permissible technical characteristics of terminals to be used in telecommunication networks in Ukraine, safety requirements in part of radio radiation Annual loss of revenue to the State Budget of Ukraine exceeded USD 200 million due to non-payment of customs duties on import of mobile terminals

17 Geneva, Switzerland, November AISMTRU The Automated Information System for Mobile Terminal Registration in Ukraine (AISMTRU) was established and put into operation by the Ukrainian State Centre of Radio Frequencies (UCRF) on AISMTRU’s main objectives: protect the Ukrainian market against low quality and unauthorized terminal equipment (in the first place, mobile phones) ensure adequate QoS (first of all, for mobile communication services) and consumer right’s protection resolve a social problem of terminal equipment theft (especially, phones and tablets from children)

18 Geneva, Switzerland, November Legal basis of regulatory procedures Legal basis for terminal equipment’s import is defined by the Law of Ukraine “On Radio Frequency Resource of Ukraine” and other regulatory acts These acts provide for registration of unique international identification codes as a tool for protecting the Ukrainian market against low quality, unauthorized and illegally imported terminal equipment Before the UCRF’s permission was mandatory for import of radio equipment (to be presented to customs’ authorities)

19 Geneva, Switzerland, November Legal basis of regulatory procedures On the legislation changes entered into force with aim to facilitate the business and decrease a number of authorization documents in Ukraine: import permission for radio equipment is cancelled documentary confirmation of conformity with technical regulations is mandatory for import and use of radio equipment in Ukraine the term “international identifier of terminal equipment” is defined by the Law, thereby securing and extending the regulatory procedures for registration and use of terminal equipment within telecommunication networks

20 Geneva, Switzerland, November Import and registration procedures Import of radio equipment to Ukraine is controlled by the customs authorities under the following conditions: conformity to the Register of radio electronic facilities and radiating devices, which are permitted to be used in Ukraine in the frequency bands of common usage availability of a document on radio equipment’s conformity with technical regulations In accordance with the Law of Ukraine “On Confirmation of Conformity” the conformity of terminal equipment has to be certified by the bodies, agreed by the Regulator

21 Geneva, Switzerland, November Import and registration procedures According to legislation changes, the Regulator approved new Procedure for import of radio electronic facilities and radiating devices provides the registration of international identifiers developed in cooperation with manufactures and market players At present the registration of international identifiers of terminal equipment, legally imported to Ukraine, requires the confirmation of the State Customs Service of Ukraine including the extract from customs declaration (in electronic form) for import of radio electronic facilities

22 Geneva, Switzerland, November General structure of database Generalized database of international identifiers for terminal equipment contains: Database with identifiers for authorized terminals (White list) - legally imported terminals to be served by telecommunication networks Database with identifiers for temporarily permitted terminals (Grey list) - terminals not entered into the White or Black Lists at the moment of first registration in the telecommunication network Database with identifiers for unauthorized terminals (Black list) – terminals are not authorized according to legislation to be served by telecommunication networks

23 Geneva, Switzerland, November Implementation of import regulatory procedure based on registration of mobile terminals’ international identifiers together with control of their legal import almost eliminated the problem of counterfeit and contraband import of mobile phones in Ukraine Benefits of regulatory procedure implementation Benefits reached: economic state security social Technical realization of regulatory procedure was performed by the UCRF without state budjet funding

24 Geneva, Switzerland, November Grey import of mobile terminals in Ukraine decreased abruptly - a share of legally imported mobile phones increased to 93-95% in 2010 (first year after implementation) Economic benefit

25 Geneva, Switzerland, November The revenue from customs duties on import of mobile terminals to the State Budget of Ukraine increased to USD 200 million in 2010 (20 times, compared with year 2008) and remains stable over the preceding years Economic benefit

26 Geneva, Switzerland, November Legalization of mobile terminals’ import facilitated in whole the legalization of the Ukrainian market and resulted in considerable improvement of situation with legal import of other types of radio electronic facilities Economic benefit

27 Geneva, Switzerland, November Registration of international identifiers of terminal equipment facilitates the anti-terrorism and combating against other criminal activities Security services and police broadly use the IMEI codes to identify the individual number of mobile phone, track the phone usage under change of its individual number (SIM card) or operator network UCRF’s registration system capable of preventing the registration of IMEI codes, having an inappropriate format (TAC code does not correspond to the code for a specific model, IMEI code does not correspond to the code specified by the GSMA document DG06 (TW.06), e.g. all 15 digits are “0”, “1” or others) State security benefits

28 Geneva, Switzerland, November Under common operation of international identifier database and operators’ EIRs, the service of terminal equipment may be stopped, thereby the theft of terminals becomes a purposeless Impact of regulatory procedure and registration system implementation on customers’ awareness Social benefits and wish to buy the legally imported and nonhazardous equipment, especially mobile phones (65% of IMEI codes were checked in 2013)

29 Geneva, Switzerland, November Future tasks of market regulation Closing of the market for counterfeit and contraband terminal equipment (mobile communication, wireless broadband networks, new mobile radio technologies) Combating against mobile equipment theft and its prevention Ensuring the state security Effective realization of above tasks requires the national legislation changes and may be facilitated by c reation of the global information system for exchange by unique telecommunication/ICT devices identifiers

30 Geneva, Switzerland, November WTDC-14 Resolution 79 (Dubai, 2014) WTDC-14 Resolution 79 (Dubai, 2014) resolves to instruct the BDT, in close collaboration with the TSB and BR to continue to increase and develop ITU activities on combating, and ways of limiting the spread of, counterfeit devices; to assist Member States, particularly developing countries, in addressing their concerns regarding counterfeit devices

31 Geneva, Switzerland, November PP-14 Resolution COM5/4 (Busan, 2014) in general, telecommunication/ICT devices that do not comply with a country's applicable national conformity processes and regulatory requirements or other applicable legal requirements, should be considered unauthorized for sale and/or activation on telecommunication networks of that country ITU and other relevant stakeholders have key roles to play in fostering coordination between the parties concerned to study the impact of counterfeit devices and the mechanism for limiting their use and to identify ways of dealing with them internationally and regionally resolves to instruct the three Bureaux to assist Member States in addressing their concerns with respect to counterfeit telecommunication/ICT devices through information sharing at regional or global level, including conformity assessment systems

32 Geneva, Switzerland, November Establishing the global system as a way of dealing with counterfeit Study on internationalisation and fragmentation of value chains and security of supply (EC, February 2012) : While governments in, for instance, India and Kenya have taken or are planning to take action to close down counterfeit mobiles without IMEI numbers, such actions are proving difficult in practice Creation of the global information system for exchange by unique telecommunication/ICT devices identifiers with a key role of the ITU and other relevant stakeholders may significantly assist the Member States in line with the WTDC-14 Resolution 79 and PP-14 Resolution COM 5/4

33 Conclusions and Recommendations Today, there are a number of successful solutions based on unique telecommunication/ICT devices identifiers’ registration, which are deployed or planned by individual administrations and regulators to combat against counterfeit/ substandard terminal equipment Creation of the global information system for exchange by unique telecommunication/ICT devices identifiers with a key role of the ITU and other relevant stakeholders may significantly assist the Member States in line with the WTDC-14 Resolution 79 and PP- 14 Resolution COM 5/4 Geneva, Switzerland, November


Download ppt "Geneva, Switzerland, 17-18 November 2014 Regulatory procedures and solutions for protecting the market against counterfeit/substandard terminal equipment."

Similar presentations


Ads by Google