Uganda losing millions in fake phone deals

Kampala – Jacqui Mwangi, the marketing manager, Simba Telecom, announced the loss last week, following nationwide research carried out among 60,000 mobile phone subscribers by Simba, an authorized Nokia phones distributor in Uganda. Mwangi said the sum was discovered after assessing that about 100,000 fake phones are sold free of taxes in Uganda every year at an average price of Ugshs.150, 000 (US$87.5).

She said if government comes up with strict measures to restrain the distribution of fake mobile phones on the grey market, the economy could positively benefit from the cash through revenue collections.

Ush15 billion can help Uganda fund its national data transmission backbone which can link districts using fibre-optic cable to high-speed connectivity for both voice and data exchange. Or the money could be used to construct more than 1600 boreholes throughout Uganda to provide over 20 million Ugandans with clean drinking water.

Although the nation is losing billions of money through product alteration, Mwangi said the number of people buying fake and stolen phones had dropped by 8% since 2005.

“The overall figure of people who currently have fake phones has dropped to 32%, from 40% previously. This shows a positive step in the right direction,” Mwangi said.

It was also discovered that 56% of people who buy Nokia phones costing over Ushs500,000 (US$292) in Uganda, buy them without a warranty. Of the 56%, 10% bought phones that were SIM card locked from foreign service providers, and 22% bought phones that were stolen, while 24% bought phones that looked new but did not have the original box and the serial number on the body didn't match that displayed on the phone screen when one enters the code *#06#.

Mwangi said that most of the customers who had bought fake phones sales did so because they were cheaper, they believed that all Nokia phones are manufactured by one firm, and they didn't realise the phone they bought was a fake.

The research further revealed that 72% of Ugandans can do barely more than make and receive calls. “Most people know how to dial, send sms and access radio. 25% don't know how to change their ring tones and 32% don't know how to set the time,” Mwangi said.

Almost all the respondents said that VAT on mobile phones was unfair and should either be scrapped or reduced. Efforts to get a comment from government either suggestion were unsuccessful.

Thousands of fake mobile phones remain and new ones are coming in on the Uganda market. The onus is on the Uganda government and particularly the Uganda National Bureau of Standards and revenue authority to ensure that the fake phones are off the retailers' shelves so that consumers can get genuine phones and billions of shillings can be channelled where it's needed.