As part of the President Hassan Rouhani administration’s push to curb mobile phone's smuggling, the Registry Scheme went into full swing as of April 21. Following the move, government revenue from customs duty and imports tax levied on cellphones hiked 2.7 times.
During the year ending in March 2017, the value of imported handsets into the country was 5 trillion rials ($119 million), which reached 136 trillion rials ($3.23 billion) in the next year; the increase translates into a 172% jump in government revenue—from 900 billion rials ($21.4 million) to 2.45 trillion rials ($58.3 million).
The numbers were reported by Hamidreza Dehqaninia, the ICT head at the Headquarters to Combat Smuggling of Goods and Foreign Exchange, in an interview with Students News Network.
Aimed at reining in cellphone smuggling, the ICT Ministry, Islamic Republic of Iran Customs Administration, Communications Regulatory Authority and the Industries Ministry introduced the Cellphone Registry Scheme that bars local operators from offering services to contraband phones.
Implementation of the scheme was phased to prevent a shock to the huge cellphone market. The final phase came into effect on April 21, rendering remaining brands such as Samsung, HTC, ASUS and ZTE legally liable.
After the implementation, smuggled phones were cut off from the country's network. Statistics show that so far, a total of 210,773 phones have been disconnected.
The most impacted brand has been Apple, with 108,588 iPhones being blacklisted.
Nokia and Huawei are next with 43,944 and 25,794 cutoffs. Figures will be updated after the effects of the final phase reveal themselves.
In addition to the smart solution, law enforcement forces have tightened their grip on the activity of cellphone smugglers.
>Official Acclaim
ICT Minister Mohammad Javad Azari-Jahromi took to Twitter to announce the implementation of the final phase of the Registry Scheme as part of President Rouhani's e-governance agenda, saying that mobile phone smuggling will be stemmed.
Before the implementation of plan, administrations were deprived of the import tariffs on cellphones that can now be collected thanks to Azari-Jahromi and his team.
In a few months since the start of the project, mobile phone imports hit an all-time high and ranked among the top ten most imported items into Iran.
According to the annual report released by Islamic Republic of Iran Customs Administration, 3,224,617 handsets worth $528 million were brought into Iran through legal channels, indicating a 112% year-on-year increase in terms of value—accounting for 0.97% of the country’s imports bill.
Cellphones landed at the 9th spot in the country’s most imported items during the twelve months to March 20, while it had been ranked 13th a month before, showing an exponential spike.
Before the launch of the scheme and in the past ten years, 90% of phones brought into the country were contraband.
The scope of the measure will only expand now that the South Korean Samsung—holding over 50% of Iran's mobile market—is subject to the new regulations.
>Consumer Outrage
Since the scheme was enforced, mobile phone prices jumped 20-35%. For flagship handsets, the rise translates into a $200 to $300 rise per piece, creating further financial difficulties for a population already incapacitated by inflation and unemployment. The sudden surge in prices has outraged consumers.
Furthermore, market experts argue that oversight in the implementation of the scheme has led to complications along the way.
Travelers to Iran were among the most negatively affected by the initiative, especially in the beginning when IRICA announced that incoming passengers should not carry more than one cellphone and will have to pay 18% of the value of the phone as tax at the time of entry.
Travelers have been exempted from the new restrictions for 30 days from the date of arrival but if they decided to extend their stay, they would have to register their handsets with IRICA and pay the 18% tax or their devices would be blacklisted and local operators will be barred from offering services to such mobile phones.
The measure created major complications since travelers to Iran had not been alerted about the new policy in advance.
>Phases, Technicalities
Mobile brands came under the scheme in six stages starting with Apple phones on December 5, 2017.
Less than a month later on December 29, Motorola, Google and Blackberry were included in the Registry Scheme, all brands with no official representative in the country.
The next brand in line was LG, which was subject to the rules from February 17 onwards.
The fourth and fifth phases began one week apart on March 10 and 17, leading to a ban on contraband Nokia, Huawei, Sony, Techno and Xiaomi mobile phones.
The final stage began on Saturday, effectively including all brands in the scheme and thereby paralyzing smugglers.
For implementing the scheme, local authorities use an online database of the IMEI, or the International Mobile Equipment Identity, number of the functioning handsets. IMEI is a unique number—like fingerprint for electronic devices—that helps identify a mobile phone.
Since November 2015, importers of mobile phones have an obligation to register the IMEI with the database.
The IMEI number is used to identify valid devices. Therefore, only cellphones which have entered the country through legal channels can be used.
Since the Registry Scheme took effect, importers have been receiving a Registration Code from IRICA for each handset after paying the import tariff. Dealers are required to give the code to customers at the time of purchase.
