The Communications Authority of Kenya is heightening efforts in a bid to stem the growing counterfeit electronics gadgets inflow within the country. The new regulatory framework known as the Telecommunication Equipment Distributor licence targets only high-quality and compliant gadgets selling in the local market.
What the New TED Licence Entails
The proposal has it that:
- A one-off Sh250,000 licence fee for a period of 15 years will be paid.
- Annual operation levies will be charged at 0.4% of an operator’s annual revenue, with a minimum of Sh120,000.
The move is set to affect major players like Safaricom, which posted revenues of more than Sh10.54 billion in device sales in the year to March 2024, and could pay up to Sh42 million annually under the new regime.
Why the TED Licence is Important
The CA said counterfeit gadgets, most of which lack IMEI numbers, pose a number of risks, including:
- Inability to trace stolen gadgets.
- Revenue loss to the government through tax evasion estimated at Sh3.2 billion annually.
Vendors will also be compelled to buy goods only from licensed importers who will ensure that quality standards are met.
Fears of Price Increase
This license would increase the costs of electronics, as telcos and wholesalers might want to pass over the increased costs. Kenyans have witnessed a rise in prices of electronic gadgets over the last two years because of the weakening of the shilling against major currencies such as the US dollar.
Reining in Fakes: Not First Case
This is not the first time that the CA is acting on its plan to eliminate fake gadgets:
- In 2023, the Supreme Court gave the green light to the CA’s proposal to roll out a Device Management System to detect sham devices. The rollout, however, has been delayed over concerns about privacy.
- Earlier, the CA launched the 1555 IMEI verification service that allowed users to verify the authenticity of their devices. The program was wrapped up in March 2023.
The Road Ahead
Though the new licence by TED can reduce counterfeits, it is yet to be seen how effective it would be with the high demand for gadgets in Kenya, which currently has over 35.21 million smartphones in use as of June 2024.