Effect of MDMS on phones purchased from grey channel
As the government has announced the implementation of the Mobile Device Management System (MDMS) in Nepal, there has been a widespread assumption that older phones purchased through grey channels will not work. However, that is not entirely the case. Even after the system goes live from Shrawan 1, phones purchased from India, imported as gifts, and through other grey channels can continue to function normally. Here, we have also talked about the effect of the MDMS system on phones purchased from grey channels.
MDMS effect on grey phones:
Before we go any further, let’s understand why the grey market exists in Nepal.
Reasons why the grey market exists
The government and NTA have clearly initiated the implementation of MDMS to diminish grey channel infatuation. This will also assist the economy of the country to flourish. There are, however, certain conditions that ultimately made many of us (as a consumer) opt for smartphone imports via unofficial channels.
The first and foremost reason has to be the overpricing of most phones that arrive in Nepal. And because we share an open border with India, where the prices are lower, Nepalese are directly motivated to import from a grey channel. The delayed launch comes next.
Compared to our neighboring countries, smartphone companies launch their devices pretty late here. So, domestic smartphone enthusiasts don’t get to play with the newest gadgets quite on time. And once again, we’re left to look at the grey market.
What could happen now in Nepal?
Following the implementation of MDMS, smartphone brands in Nepal now have the ability to offer products at higher costs, and no matter what, buyers will have to settle on that price. It creates a closed and monopolistic market where the customers suffer the most.
On the other hand, the government hasn’t released a detailed blueprint outlining how the system works for foreign-purchased devices. Consider the following scenario: someone arrives in Nepal and brings a handset as a gift, or tourists have their smartphone purchased in their own country.
Is it worth it if they are unable to use that particular device? Certainly not. So, the government should institute an appropriate procedure to get the gadget authorized for usage in Nepal.
Advantages of MDMS
While we have discussed the downsides of MDMS, there are also beneficial components to them.
Proper tax collection
One of the primary reasons for imposing MDMS is to ensure that the government collects the allocated tax (13% VAT and 2.5% excise duty) from every phone that enters the country. If the device is purchased in Nepal, the owner directly pays all taxes and other add-on costs.
However, phones bought on the grey market are exempt from this requirement. So, since the system will abolish the import of phones illegally, that will directly result in an increased volume of legal imports. And this will ultimately help the government regulate smartphone import taxes to the proper extent.
Following that, the handsets purchased on the grey market will not have their IMEI number registered in NTA’s database. If your phone gets lost or stolen, the authorities may be unable to locate it. But that won’t be the case for phones that arrive through the official channels.
So, what if your existing phone(s) is from the grey market?
Before you start to panic, don’t. Even if you bought your phone from unofficial channels, it will continue to function as it is now—on one condition. You should compulsorily register your device in the NTA database to avoid any future complications.
All the strategies that the NTA has in the works to reduce the effects of the grey channels in the country are commendable. However, as there are two sides to every coin, the responsible authority should also endeavor to resolve the contradictory scenario we outlined above.
The government of Nepal should also think from the consumer’s point of view and assure us believe that this is indeed a fair implementation.
- Meanwhile, check out our review of Vivo iQOO 7.