Uganda’s fight against counterfeit telecom devices boosted through technology

The telecom boom has provided great benefits to Africa but it has its drawbacks too. As telecom services multiply and upgrade, telecom fraud is gaining ground across the continent as it adapts, depriving States and mobile network operators’ significant revenues from the sector. Adding to this debacle is the issue of counterfeit telecommunication devices. Tackling these issues through data technologies will enable States to remedy the situation, which is crucial in the current economic context, since all the resources must be mobilised for the sake of the people.

 Over the last decade, telecommunications services have expanded rapidly throughout Africa, bringing with them many socio-economic benefits for the countries of the continent, governments as well as the populations. For instance, Ugandan gross telecom revenue reached nearly Shs4 trillion in 2020, with Shs1.14 trillion being recorded between October and December 2020 alone. Uganda’s telecom market is expected to attain stronger growth over the next few years, between now and 2025. The growth in the industry is mainly driven by increasing population, communication service, and rising adoption of smartphone services. A major part of the market growth in Uganda is attained by premium connectivity and content services in the country.

 The competition in the industry is highly consolidated with few players. Leaders continue to enjoy significant market share as high competition and racing for innovation ranging from mass-market entertainment to high-end business connectivity. The key strategies adopted in the industry are introducing new and affordable products and services, mergers, acquisitions, expansion of services or network and bandwidth.

The counterfeit device issue

Counterfeit devices are an issue that must be contended with globally, down to the level of individual countries such as Uganda. Counterfeit mobile phones amount to nearly 20% of all handsets sold globally, according to OECD. Further, it is estimated that 10 to 20% of mobile devices connected to the African telecom networks are counterfeit, and that number continues to grow.

Uganda has an estimated 28.01 million mobile connections, about 60.3% of its total population, according to data from data reportal. Of this total, it was reported that as of July 2020, there were 2.5 million counterfeit phones active in the country. The Uganda Communications Commission (UCC) was due to deactivate these handsets after the elections earlier this year.

Controlling fraud through data technology

The expansion of telecom services has also attracted the attention of criminals eager to cash in on it, so much so that Africa is now seen by operators around the world as one of the world’s telecom fraud hubs - losing an estimated US$150 million to fraud every year.

Despite this, there seems to be increasing awareness and agreement among the relevant authorities that technological advancements are also part of the solution to telecom fraud. A variety of digital solutions are currently available to governments and regulators eager to step up their fight against cybercrime and counterfeit devices. These solutions have the capacity to ensure network security, protect digital identities and fight counterfeit and non-compliant devices. They aim at preventing and counteracting telecom fraud and other criminal activities in the mobile ecosystem.

However, the adoption of such technologies on the continent is not yet widespread, which means that African governments and regulatory authorities still lack the digital tools that would enable them to effectively oversee and regulate the telecom market in their respective countries by providing them with the accurate and comprehensive data needed to control fraud and improve overall compliance. As a result, the mobile ecosystem is increasingly exposed to a number of critical risks and contingencies. Nevertheless, it is encouraging that there is a growing number of countries that have chosen to seek out such technologies.

Uganda has already shown interest in the expansion of its digital capabilities, recently announcing a financing agreement worth US$ 200 million with the World Bank. This will go toward accelerating Uganda’s digital transformation and strengthening digital inclusion. Therefore, it is possible for Uganda to look towards the continued implementation of systems and technologies that can aid them in combatting telecom fraud and counterfeit devices, as well as the adoption of new ones, so as not to water down the gains made in digital transformation.

Data technologies address a core challenge for regulators and do this by encouraging collaboration among all the market stakeholders. Enhancing this collaboration is a vital step towards constructing sustainable and safe telecom ecosystems, as such goals require collective efforts to succeed, as opposed to each individual operator going it alone and implementing its own solution. With the help of technology, Uganda can effectively put up a strong fight against counterfeit devices and telecommunications fraud.

Nathan Byekwaso
IT analyst