Come July 16, all mobile sets bought without a bill or imported into the country without paying customs duty will become unusable when the Mobile Device Management System kicks in.

The Nepal Telecommunications Authority will implement the scheme from the beginning of the new fiscal year which will secure and keep track of all cell phones in the country in a bid to prevent misuse and grey market imports, officials said.

“As we have observed that the Integrated Data Centre of the government can make real time observation of mobile devices' genuineness, we decided to make a soft launch,” said Purushottam Khanal, chairman of the telecom regulator.

According to him, travellers entering Nepal will be permitted to bring only one mobile set along with the purchase bill once the system is enforced.

"If they bring more than one set, customs duty will be charged on the extra sets," he said. “The phones will need to be registered too.” Illegal mobile devices will be blocked from use in Nepal.

Currently, migrant workers and foreign travellers are allowed to bring more than one mobile set with them.

From Friday, travellers bringing cell phones will have to register them with the authority by filling out a form to make them operational.

According to the Mobile Device Management System Bylaws 2018, individuals importing a device for personal use in accordance with customs regulation will be required to register online its International Mobile Equipment Identity (IMEI), Equipment Serial Number (ESN) and the Mobile Equipment Identifier (MEID) with the Mobile Device Management System during the application process.

According to the bylaws, mobile users will be notified to register with a notification of denial of service by the operators after 15 days from the first detection of the unregistered set after it is used with SIM or RUIM cards.

The guideline says that a one-time registration fee for each mobile device imported into Nepal, either by authorised importers or by an individual for personal use, may be applicable as prescribed by the authority.

The Mobile Device Management System will consist of white, grey and black lists of IMEI codes and provide interfaces to importers, customs and law enforcement agencies, mobile operators, the general public and the Nepal Telecommunications Authority.

It is also expected to control criminal activities, according to the regulator. The system will enable the registration of mobile devices, verification of IMEI, ESN, MEID and identification of non-compliant mobile devices.

The budget statement for the fiscal year 2021-22 also declared that the Mobile Device Management System would come into operation from July 16.

Finance Minister Bishnu Prasad Poudel, while presenting the budget, said that the new provision would control the use of illegal mobile sets and also control criminal activities through the use of mobile phones.

The telecom regulator said the system was being built at a cost of Rs650 million.

The system will be synced to a database called the Equipment Identity Register that contains records of legal and illegal mobile devices in the country. The device management system is also expected to identify cloned, low-cost copy versions of branded phones with fake registration numbers.

“It might take one and a half months to get the system working in a full fledged manner, '' Khanal said, adding that the installation of the system would be 95 percent complete by then.

The telecom regulatory authority moved to develop the system four years ago after the Mobile Device Management System Bylaws 2018 was issued.

Khanal said that due to Covid-19 and the lockdown, introducing the system was delayed as solution providers had to arrive from third countries, and it took a long time to have goods released from the ports due to the pandemic.

The mobile connectivity of telecom operators like Nepal Telecom, Ncell and Smart Telecom will need to be connected to the system that will be operated from a new building built in Chabahil.

The authority prepared the bylaws for the implementation of the Equipment Identity Register system to ensure national and consumer security, to identify genuine mobile handsets and make fake and non-genuine handsets inoperable in Nepal to enable tracking or blocking of mobile handsets that are lost or stolen, to encourage the import and sales of genuine mobile handsets, and to eradicate the grey market.

Once the system is implemented, if a mobile device is lost or stolen, the owner can apply online to track or block its use with any SIM or RUIM card as applicable.

The customs will release only those mobile devices which are already approved by the authority and ensure that the IMEI, ESN and MEID numbers of imported mobile devices are registered and verified by the system.

According to the Department of Customs, the country imported mobile phones worth Rs34.14 billion in the first 11 months of the current fiscal year as against the import of Rs15.74 billion in the same period of the last fiscal year.

Mobile phone dealers have long been complaining about falling sales because of a rampant grey market. The Mobile Device Management System will bring smartphones under the registration net, making it easier for authorities to monitor them, according to Nepal Telecommunications Authority.

Grey market mobile phones enter the country, especially from India, in hand baggage, and no customs duty is paid on them. Many returning travellers also bring phones for their friends and relatives, according to domestic mobile dealers.