Checking the Influx of Counterfeit Mobile Phones

The use and sale of substandard mobile phones in the country telecommunications space have been increasing to the extent that it has become a menace as it affects quality of service among other consequence.
Simply put, counterfeiting means copying an original item, especially consumer products, with the intent of deceiving or defrauding the buyers. Unfortunately, counterfeiting has become so pervasive in Nigeria that it involves every consumer product in the marketplace, ranging from household items to automobile spare parts, telecommunications devices and so on.
The ill of counterfeiting is sometimes perceived by society as a victimless crime with ‘Fake’ simply constituting a cheap alternative purchase. At other times, consumers are constrained by ignorance, inability to detect counterfeit products and poverty. Incidentally, the case of consumers and buyers of mobile phones and their accessories is not different, as many consumers opt for substandard or counterfeit mobile handsets, often referred to as ‘China phones’, because they are seemingly cheap and look exactly like the originals.
All these are informed mainly by the advancement and sophistication of counterfeiters in recent times and compounded by the lack of zeal of producers to partner with regulators in the education of consumers and removal of fake products from the market place.
The interesting thing about the trade in counterfeit devices is that it is a buyer’s market. This means that it is the demand for the devices that encourages the supply. The easiest way to pull the plug on this business is to discourage patronage. It is believed that if the average consumer is aware of the potential hazards that he exposes himself to every time he purchases a counterfeit phones device, chances are that he would have a rethink. The need for all hands to be on deck in public enlightenment about the dangers of counterfeit phones cannot therefore be over emphasized. The more people are aware of this danger, the less vulnerable they become. The bait of cheap prizes of these counterfeit devices becomes less and less attractive. This is a fight to entrench standards in the goods and services that Nigerians consume. Indeed this is a fight against a crime that hurts us in more ways than one.
Against this backdrop that major mobile phone manufacturer, Nokia recently organized an interactive programme aimed at sensetising the country’s gate keepers and media on the need to curbing the use and sale of counterfeit mobile phones in the country.
Silvin Sinan, Head of Care, Nokia West Africa, said that as long as this illicit trade thrives, government loses revenue in the form of taxes, the economy loses potential employment opportunities, and investors are discouraged thus dealing a deadly blow at government’s efforts at encouraging foreign direct investment. As long as we allow the illicit trade in counterfeit mobile devices to thrive, we discourage creativity and innovation because the very existence of cloned counterfeit phones is an infringement on intellectual property. More importantly, counterfeit devices are hazardous to the mostly unsuspecting users. The quest to maximize returns in the illicit business relegates to the background, the need to adhere to acceptable radiation standards in the manufacture of these devices. It is therefore inhuman for us to turn a blind eye, while our economy bleeds and human lives are place at risk because of the selfish activities of a few.

Effects
According to Mrs. Ify Umenyi, director general, Consumer Protection Council (CPC),
“a part from the health hazards that consumers of counterfeit products are exposed to, since counterfeit products are usually not subjected to any regulatory authority and thereby not made in conformity to relevant standards and specifications, the country loses a lot of revenue through the activities of counterfeiters. Producers of counterfeit products evade legitimate sources of government revenues like duties and taxes. Also, employment opportunities are lost as genuine producers and employers of labour are hindered from attaining economies of scale and as a result forced to shut down on many occasions. There is also a genuine concern around the world that terrorists get their funding from illegal activities like counterfeiting smuggling, bunkering and so on”.
In view of the foregoing, the influx of fake and substandard products has been a source of concern to the federal government of Nigeria. The apex consumer protection agency of the federal government, Consumer Protection Council (CPC), she said has come up with an interventionist programme like the establishment of joint task force, in conjunction with the Standard Organization of Nigeria, National Environmental Standard Regulation and Enforcement Agency (Nesrea) and Alaba Market Association, on fake and substandard electrical and electronic products in Alaba International market, Lagos.
Said noted that CPC has also partner with some genuine manufacturers to raid some known black spots, with a view to ridding them of fake and substandard products. “In this regard, in the last one year, the council has carried out more than three different raids in GSM village, Lagos, to rid it of fake mobile phones, and carried out several other raids in Lagos metropolis and other states of the federation to remove different counterfeit and unwholesome products from the marketplace,” she added.
In spite of all these and efforts being made by other regulatory agencies to combat counterfeiting in Nigeria, the trade appears to be gaining grounds at huge costs to consumers, manufacturers and government alike.
For instance, the result of a recent research carried out by the Business Software Alliance (BSA) and the International Data Corporation (IDC) disclosed that Nigeria lost more than N19.8 million to software counterfeiting in 2009 and associated problems. Microsoft Nigeria said that, consumers and companies spend million of dollars each year on counterfeit copies, financing scammers who threaten the integrity of the software industry. But for victims of software piracy, the losses aren’t just monetary.
In the telecom market to be precise, apart from the loss of valuable income through the purchase of fake handsets and their frequent replacement by consumers, there is a growing concern that the result of highly hazardous emissions from fake mobile phones may soon begin to manifest. Counterfeit mobile devices are low in quality and do not meet standards. In some situations, the radiation from them is beyond the permissible limits and can cause serious damage to the health of consumers.
Scientific study on the levels of radio frequency emissions from mobile phone handsets indicated that several of the sophisticated looking fake and cheap phones in the market emit high levels of radiation, far higher than what is globally accepted as safe.
Ironically, manufacturers, and dealers in fake handsets are harvesting bountifully from this illegal business.
Timi Bomodi, Public Relation Officer, Nigeria Customs Service, Apapa Area 1 Command, said that the counterfeiting of intellectual property has been a source of worry to governments, and institutions the world over. He said that the behavour of certain individuals and companies in developing countries such as Nigeria has made dealing in counterfeit products very attractive. “The large domestic IT market is buoyant, and developing at an incredibly fast rate. This in an economic sense should be an asset. However, it has negative connotations,” he said.
Role of Customs
The Nigeria Custom Service is an organization set up by an act of government to regulate and control the import and export of goods to and from within its domain, in addition to regulating the domestic production of such same goods.
As part of efforts to check influx of substandard goods that the service launched ‘The ASYCUDA risk profile modules’ which are designed to target and identify importers who comply with extant import rules, and those who don’t. Risk profiling Bomodi said helps to isolate known defaulters who in the past have infringed on import laws, and applies the strictest checks on their imports, by channeling them through the deep red lane, for physical examination. The blue and green channels are automatically allocated to known genuine importers who over the years have shown integrity in their import and export dealings.
“The recently introduced Cargo tracking Note (CTN) is a web based high technology for monitoring imports and exports. It notes the cargo type, origin, quality, carrier, vessel, and other shipment information, and generates automatic information to the ports of destination. It is a useful security tool and a toll for checkmating counterfeiters, as it provides advanced information about all cargo,” he said.
Role of SON
The Standard organization of Nigeria came into being, because the federal government saw the need to regulate the quality and standards of imported and locally produced goods, seeing as Nigerians are deserving of the same quality of life as citizens elsewhere.
The organization has put in place a programme it called SONCAP, which means SON Conformity Assessment Program, designed to protect the Nigerian consumer. The aim of SONCAP is to identify those goods which pose the highest risk to consumers in Nigeria and ensure that their claims of safety are verified before they are exported to Nigeria. This helps to ensure that Nigerians are protected from unsafe and substandard goods as well as ensure that Nigerian manufacturers or brand owners are not subjected to unfair competition from such goods. The extent to which these initiatives by the country’s gate keepers have effectively performed it obligations is open to debate as in spite of these programme substandard mobile phones still find their way to Nigerian markets.
Challenges
Most persons in urban societies can easily identify a brand by its logo or its symbol. Brand visibility encourages brand acceptance. Symbols or logos alone are incapable of identifying genuine products, as counterfeiters capitalize on them to con the unsuspecting public. The different facets of a product that gives it its unique identity are usually unidentifiable by the average user. This is where the brand owners need to come in, by not only promoting the flashy exterior of its products, but by also drawing the attention of the buying public to easily identifiable marks that sets it apart from fakes.
Training and public enlightenment are major challenge in the fight against counterfeits mobile phones. Brand owners should endeavour to train the gate keepers at the various entry points. This training should be broad based and should equip the gate keepers with the technical details of their products including bar, manufacturing, and country of origin codes. This will help the officers at the ports and borders to identify, and confiscate counterfeit products. It will also help to prosecute the counterfeiters and their facilitators. They can also provide actionable intelligence from their owner sources, thereby making the job of law enforcement less difficult.
Engr. Adewumi Richard, group head, Electrical and Electronics, SON, said that tracing sellers of counterfeits mobile phones poses a challenge towards curbing the menace. According to him, the sellers don’t have a permanent location as the move from one location to the other to avoid being arrested by law enforcement when first time buyers of the counterfeit identifies that they have been con and decides to approach the police.
It is also the responsibility of brand owners to expand their sales outlets, and to make its products more accessible to consumers. Where there is a void in the supply, and demand chain, the counterfeiters are more likely to exploit it for profit.
The pricing of original products too is a factor, as research has shown that people are mainly attracted to counterfeits by their lower prices. People in the lower economic strata, are more likely to acquire counterfeits than people in the higher strata. However people with means have been fooled by the external characteristics of counterfeits too.
Brand owners should partner with government institutions like Nigeria Customs Service and Standard Organisation of Nigeria. This partnership should be in form of training, and information sharing.