Comments made by Igor Kungurov to an article titled “Mobile Load”

16 February 2012

The concept of controlling subscriber's units (mobile phones, USB-modems, etc.) proposed by the Ministry of Communications and Mass Media of the Russian Federation, will cost 3.4 billions roubles per year as a minimum. At the same time, efficiency of suggested measures remains quite unclear.

Phone held in leash

The market players were equivocal about the recent proposal of the Ministry of Communications and Mass Media of the Russian Federation to assign an identification number (IMEI) to each subscriber's unit imported to /manufactured on the territory of Russia. This being said, the biggest concern was the potentially mandatory procedure of “binding” the phone (via IMEI) to subscriber’s SIM card.

National Mobile Phone Census

Negative opinion on this project was recently delivered by experts of the Ministry of Economic Development and Trade of the Russian Federation. According to their estimates, the control of presence of “identifier” on mobile phones alone can result in additional expenditures to be incurred by the industry, amounting to 500 million – 3.4 billion roubles per year. “It is unclear, how one can prove the uniqueness of identification numbers of subscriber mobile phones at verification of compliance with applicable requirements. Repacking of subscriber's units, verification and registration of identification number and conservative submission of these data may require from 50 to 200 roubles per unit”.

This being said, the efficiency of measures offered remains unclear. Indeed, the IMEI control is just the first step of the program aimed at combating cybercrime, preventing stealing of mobile phones, using mobile phones for fraudulent calls to emergency numbers, and committing other unlawful acts. And officials of the Ministry of Communications and Mass Media of the Russian Federation did not explain when and how they are going to achieve these good objectives. According to expert opinion of the Ministry of Economic Development and Trade, “Prior to submission of the above data, no conclusion can be made that the project does not contain regulations imposing excessive administrative and other restrictions, and obligations on entities carrying out entrepreneurial and other activities, or promote adoption of these restrictions.”

In his interview to “Rossiiskaya gazeta” last week, Naum Marder, the deputy minister, has confirmed the lack of a well-defined program in the Ministry of Communications and Mass Media of the Russian Federation: “Owners should register their mobile phones by themselves. Where should they do it? It has not been decided yet. Most probably, with the mobile operator, either when purchasing the phone, or when concluding the service contract. ... It is worthwhile to establish the term, during which an owner should register their mobile phone”.

At the same time, Naum Marder believes that such registration can be voluntary: “We do not want to force anyone”. That is, according to such logic, one can change SIM cards, shift to other mobile operators, etc., until hell freezes over, and inform one's company and block the phone only in the event that the latter is stolen.

Insiders only

Some Russian mobile operators have already practiced the so termed “phone locking” (i. e. locking mobile phones to a particular mobile network). For instance, brand phones and other devices marketed by Beeline and Megafon can only be used on these mobile networks. Moreover, to buy such phones, you will need to buy a network connection first.

Mobile operators believe there is nothing illegal about such practice. “Tariff plans may be included or not included with mobile devices offered to customers”, explained the Megafon press-service. “At the same time, devices with a tariff plan are offered at a significant discount. Customers may buy a locked device at a lower price or they may buy an unlocked device at an overall price”. OAO Vympelkom “(Beeline brand) gave a similar point of view: “Beeline brand mobile phones are marketed in our chain stores complete with SIM cards, at the price of a mobile phone, as a single product”.

Retailers try to disown such policies of operators. For instance, the Evroset press-service told Baltinfo reporter that St.-Petersburg citizens could buy unlocked Beeline phones, while all the interviewed buyers claimed the opposite. Moreover, some users did not found that their phone was locked and unable to work with SIM cards of other operators before they opened the package. No information on such restrictions is available on applicable page of the online store.

The situation gets mixed reactions from experts. “Trying to increase customer loyalty, mobile operators sell phones or modems locked to a particular network. “As far as I know, such practice is not prohibited by law,” believes Denis Kuskov, director of Information Analysis Agency Telecom Daily. “However, a lower price for goods cannot be substituted by services, i. e., they cannot sell you a phone at a lower price provided that you choose to subscribe to a mobile network”. Nevertheless, mobile operators manage to bypass these restrictions in certain circumstances.

Lawyers are less equivocal on behavior of mobile operators and retailers. “The consumer protection law stipulates, that purchasing of some goods may not be a necessary precondition for purchasing other goods,” said Igor Kungurov, the lawyer of S&K Vertikal. A mobile operator’s exercising their rights based exclusively on contracting conditions may be deemed as contravention of law. Moreover, consumer fraud on product features, for the purpose of receiving income, as a minimum will be qualified as an administrative offense, as a maximum will be qualified as a fraud.

Baltiyskoye Informatsionnoye Agentstvo 

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