MDMS system renders 5 million phones in Nepal ‘illegal’ amid concerns over data security of legal phones

mdms-system and phones without imei registration

On May 15, Nepal implemented the Mobile Device Management System (MDMS), ending the long confusion about whether the system will be implemented and if yes, how. The MDMS system partially came to implementation in mid-September last year, to ban the illegally imported mobile phones

The government is, however, undecided about the fate of about five million mobiles that entered Nepal without completing the due customs process. For now, the government has kept all those phones that entered on a grey list. It is uncertain whether the users will need to register those phones and if they can be “white-listed”. Likewise, there is no certainty about the data saved on the phones regardless of their legality.

Legal vs illegal

According to the Nepal Telecommunications Authority, with the introduction of the MDMS system, phones brought by relatives, friends and others from abroad cannot be used in Nepal without registering the IMEI number. Yet, the new directive says that those who have a work permit and have stayed abroad for more than six months do not need to declare a second phone they bring or do IMEI registration at the airport customs. 

In other cases, the phones brought from abroad will be deactivated in Nepal after 15 days of inserting the sim card if it is not registered under the MDMS system. It is not certain how many of these phones have been imported from abroad and how many have been smuggled into Nepal from the Indian market. 

According to Achyutananda Mishra, the co-spokesperson of the authority, 8.61 million IMEI numbers of unregistered mobile phones are visible in the MDMS system. So, all of them are on the grey list.

Generally, a mobile phone has two IMEI numbers. Some may not. Considering these facts also, there are more than five million such phones on the grey list, the authority estimates.

The government has not decided whether to shift these phones to the white list or not and how. The authority’s chairperson Purushottam Khanal says, “The government will take a policy-level decision on this. Until then, they will be on the grey list.”

Nepal-Dursanchar-pradhikaran_NTA mdms system
Nepal Telecommunication Authority Office in Jamal.

Officials of the authority say that the phones on the grey list may be allowed to operate now, or they may be called for registration in the future. If the government decides to send them directly to the white list, the users of such phones will not have to suffer anymore.

“But if the government decides to blacklist such phones, more than 500,000 phones with sims of Nepali service providers will not work in just one click,” says an official.

Earlier, the Ministry of Finance had discussed with NTA about giving people the time to register phones that entered Nepal without paying customs duty. However, after the delay in the implementation of the MDMS system, it got confusing more and more, with the fate of phones on the grey list left undecided.

What about information security?

After the latest implementation of the MDMS system without clarifying confusion, the question of the information security of mobile users has also become complicated. Nepal Telecom has not yet been able to give a convincing answer to the questions raised about the MDMS operators since last year.

This has turned more complicated as the contractors involved in the system’s development in Nepal are controversial.

New Mera of India has been accused of stealing the personal details of more than 4.5 million consumers and failing to fulfil its obligation to protect their information. Similarly, according to the sources, another Singaporean company involved in the joint venture has been embroiled in the case of call bypass in Nepal.

privacy for mobile devices internet safety tips
Representational image. Photo: Pixabay

Apart from that, the NTA officials say that companies involved in cases of theft of personal information from call bypassing have been involved in the installation and operation of the MDMS system to control illegal mobile phones.

The MDMS contract was awarded to Malaysia’s Nuemera (M) Sdn Bhd, Singapore’s Namaste Global Comm Pte. Ltd. and India’s OSI Consulting Pvt. Ltd. The contract awarded without e-bidding at the purchase agreement was signed on August 4, 2019, at USD 7.66 million. The MDMS system was supposed to be installed within six months of the agreement, but the contract was not seen through for about three and a half years. 

According to sources, Lalitpur-based Kabindra Raj Malla has an investment in Namaste Global, registered for call bypass purposes. Nepali nationals are forbidden to invest in companies abroad as per the Act Restricting Investment Abroad, 2021. If found guilty, they can be fined or imprisoned for up to six months or both.

Yet, a contract of nearly NRs 1 billion was awarded to him by the government agency.

Kabindra Malla, who was the chief executive officer (CEO) of Namaste Global, was taken into custody along with Manindra Raj Malla and Pabindra Raj Malla and questioned by the then Metropolitan Police Crime Division in 2009 for inflicting damage to Nepal Telecom after bypassing calls through voice over internet protocol (VoIP).

The Kathmandu district court sent Manindra Raj to prison in custody while the other two were released on bail, only for the Supreme Court to acquit them later.

Meanwhile, Malla says that he is not officially involved in the company now. He says it is also not appropriate to raise questions about the information security regarding mobile users under the MDMS system by taking reference to the lawsuits the company has faced in the past.

Mobile phone importers were also in favour of implementing the MDMS system as soon as possible, saying that stolen mobile phones could be controlled. But given the ignorance of the government regarding the background of the companies, there are also doubts about the security aspects of personal information on people’s phones.

This story was translated from the original Nepali version and edited for clarity and length.

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Ghimire is a senior business journalist at Onlinekhabar.

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