With barely three days to the massive counterfeit mobile phone switch off by Communications Commission of Kenya, more than one thing is at stake. People will be cut off from the regular communication network, cost will be incurred in acquisition of new phones and most worrying, money transfer will be affected greatly.

Statistics released earlier by the CCK indicated that close to 3 million phones had been earmaked for switch-off in the Sunday September 30th operation. CCK Director General stated categorically that the shut down of fake phones which has been postponed three times before will happen at midnight of September 30th 2012.

“For avoidance of doubt, we wish to categorically state here and now; that there shall be no further extension of the deadline,” said Francis Wangusi, CCK Director General.

Mobile Money

According to CCK 3rd Quarter Report for FY 2011/2012 as at 31st March 2012, there were 18.987 million mobile money transfer subscriptions from 18.981 million recorded 3 months earlier. This represents a 9.1%  growth over the same period the previous year.

From the table, the total deposits handled during the quarter grew by 4.8% from KES 176.8 billion recorded during the previous period to KES 185.4 billion during the quarter. When compared to the same period of the previous year, a 42.4% growth in the amount of deposits was posted.

This shows that the total deposits have been growing steadily over the period, a clear indication that the demand for the mobile money transfer service has continued to expand possibly due to its convenience, ease of access, acceptability and as an instrument of financial inclusion for the unbanked population in the country.

Most of the 3 million subscribers who own counterfeit phones reside in rural Kenya. This population acquired these phones for the features they offered, affordability and because they did not know they were not genuine. This is the same population CCK notes has become dependent on the urban-rural money remittance majorly powered by Mobile Money transfer platforms offered by the existing mobile phone operators.

The urban-rural mobile money remittance has over time become a dependable form of sending money for many workers with family members in the rural. Shutting down most of this form will limit the convenience and time effectiveness that mobile money had established. This is pegged on the reason that most of the rural dwellers and low income earning members victims of the operations will not be able to replace their phones in the immediate wake of the operation.

This in effect will force people to use third party recipients for the transfers 0r revert to older methods which are not as effective as mobile money transfer has prven to be.

Revenue Losses

Apart from inconveniences caused to the user by the operation, telcos are bound to lose revenues by some margin as a result of the operation. Revenues from both airtime sales, mobile money transfer and data services from the 3 million subscribers will be lost and it might take the operators some time to recover the same. The government on the other hand will lose revenues that arise from taxation of these services and products as well.

In dividuals whose businesses depend on mobile phone operation, especially supply of goods in the rural areas will realize a slow down in their business as some of their clients will be off the networks. In the same wake, payment for supplies will experience delays and in most circumstances, some business deals will have to be foregone as a result.

The Reason

CCK embarked on this project mainly for security reasons. Criminals use mobile phone messages to threaten, defraud and con Kenyans and without a proper set system, it was hard to track, arrest and prosecute them.

"As the general elections draw near, we also have an obligation to ensure that the mobile telecoms industry is not used to perpetrate instability and to incite violence. We therefore call on all Kenyans to support this noble initiative in order to secure our country from the threat of terrorism, lawlessness and political violence." CCK Director General Francis Wangusi said in a statement.

Existence of fake mobile phones branded as genuine ones costs manufacturers of original phones both in revenues and reputation as most fake phones do not last long and are hazardous to the user.