From early in the morning, mobile phone users have been receiving messages from Nepal’s telecom regulator: ‘your phone has been registered’.

That’s because, Nepal Telecommunications Authority, the regulator, launched Mobile Device Management System (MDMS), on Thursday, months after it was planned.

In a notice issued on Thursday, the authority said that the mobile sets brought from abroad personally till September 15 will automatically get registered in the MDMS.

The authority has requested people to purchase phone sets only by checking whether it is registered or not on the MDMS from September 16 onwards.

“The basic idea is to eliminate mobile imports from the grey market. The system will prevent phone sales without a bill and warranty,” said Purushottam Khanal, chairman of Nepal Telecommunications Authority.

“The grey market will be totally shut down right after the system comes into operation.”

According to the Department of Customs, the import of mobile phones increased by 10.75 percent to Rs40.89 billion in the last fiscal year that ended mid-July.

Nepal imported 5.76 million phone sets in the last fiscal year.

Traders say that the import figure is huge as nearly 50 percent of phone sets are illegally imported, without paying taxes.

Officials say that the chances of mobile theft will be minimised, and criminal activities that are conducted through the use of mobile phones too will be reduced.

The mobile importers and distributors also need to take mandatory permission from the authority before importing mobile phones, the authority said in the notice.

People bringing new phone sets into the country, particularly from abroad, need to be registered within two weeks.

People are allowed to bring two phone sets—one that they are using or a personal phone and another new one—when they enter Nepal.

“If people bring more than two phones, they have to pay customs duty by submitting the purchase bill,” Khanal said.

To get register the new phones, users have to submit a citizenship certificate photocopy or scan copy and scanned tax invoice online in MDMS. “This is free of cost,” said Khanal.

“If the sets are not registered, within two weeks, the phone will be blocked,” said Khanal. “However, the user will receive a notice to register the phone before it is blocked.”

In the case of foreign tourists, they need to register the phone within two weeks, Khanal said. Tourists can register their number by sending a copy of their passport and visa. “There are no charges to register,” said Khanal.

Their mobile will be permitted to operate as per the visa period, he said.

Importers that bring and sell phone sets through illegal means are not registered.

The MDMS is security software that enables the telecom regulator to implement policies that secure, monitor and manage end-user mobiles.

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

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

The system built by the telecom regulator involves setting up a data centre where the personal records of mobile phone owners registered on the network of Nepal's three telecom operators will be stored.

In June 2019, the telecom regulator selected Malaysian firm Nuemera as the service provider to implement the system.

Nuemera got into a controversy in 2017 following revelations that a similar phone blocking system it developed under an outsourcing model for the Malaysian Communications and Multimedia Commission was found to be the source of a data leak that affected 46.2 million subscribers in Malaysia.

The authority said that there was an issue with Nuemera, but that the Malaysian regulator had already clarified the matter.

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