What's Happening?
Emerging markets are witnessing a crackdown on grey market smartphone sales through the implementation of device registries. These registries track device IMEIs to ensure only registered devices can access mobile networks, thereby curbing tax evasion and protecting consumers from counterfeit products. Countries like Egypt, Turkey, and Kenya are leading this initiative, which aims to strengthen the formal retail ecosystem and support local manufacturers. The move is expected to impact lower-income consumers who rely on cheaper grey market devices, prompting shifts towards refurbished or older certified devices.
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Why It's Important?
Device registries are significant as they offer revenue protection for governments and vendors while enhancing consumer safety. They support local manufacturing, potentially creating jobs and boosting domestic economies. However, the enforcement of these registries may lead to digital exclusion for consumers unable to afford higher-priced devices, challenging the push for digitalization in many African countries.
What's Next?
Governments may need to balance enforcement with affordability programs or subsidies to prevent dampening device sales in price-sensitive segments. Successful examples of such programs have been observed in Egypt and Kenya. The initiative could drive local manufacturing, with companies like Safaricom stepping into the space to produce low-cost devices.
Beyond the Headlines
The long-term impact of device registries includes a reduction in counterfeit device usage and mobile theft. The initiative also addresses SIM swap fraud, enhancing national security and consumer protection. The move towards local manufacturing could lead to regional import agreements, facilitating freer movement of devices and reducing import taxes.
