Is your smartphone counterfeit? Depending on your country, you have a 1 out of 3 chance that it is….

For many people around the world, the sad reality is their trusted smartphone and constant companion might be counterfeit.

A 2017 article mapped out the bleak reality:

• 19% of mobile handsets sold internationally are counterfeit, according to a 2016 OECD Study 
• 10-30% of total handset sold in sub-Saharan African countries are counterfeit devices
• an estimated 40% of the 35 million mobile phones users in Tanzania would be using a fake device
• in Nigeria, around 10% of mobile subscribers, which represents some 15 million people, would be using counterfeit handsets
• in India, the number of fake handsets has been growing by 12% per year

These numbers are consistent with a 2015 study by the European Union’s  Intellectual Property Office (EUIPO) and the International Telecommunication Union (ITU). A February 2019 report by the Kenyan Anti-Counterfeit Agency furthermore shows that the problem is still growing. According to this report, 70% of Kenyans would be using counterfeit goods, out of which mobile phones are the most counterfeited goods with 51.8% of devices on the market being fake.

Not only have many people been duped into buying a counterfeit and suffer the poorer service of the device including high rates of dropped calls and failed handovers, but they are being exposed to the dangers of in-built malware.

A 2015 research study showed that more than half of the investigated devices came with malware preinstalled. The malware was not just regular Trojans or simple malicious Android apps, but was installed at the system level, so it was difficult, if not impossible to remove.

Besides preinstalled malware that intends to steel financial and other sensitive information, fake phones rarely obey safety standards and can contain hazardous materials.

Countries try to secure their mobile networks against counterfeits 

Several countries have recognized the danger to consumers and damage to local economies that counterfeit devices present. Kenya and Tanzania for example have introduced Central Equipment Identity Registers against which all devices in the networks are checked. If they are not in the registry, users get warned and devices switched off.

Colombia, Brazil and Argentina have implemented similar systems, where network operators are obliged to validate, verify and control handsets operating in their networks based on their IMEI number, which uniquely identifies each mobile device.

The IMEI number is also used in the Device Identification, Registration and Blocking System (DIRBS), developed by Qualcomm Technologies Inc (QTI) and recently released as open-source software. It is being deployed in Pakistan from January 2019 onwards.

The Kenyan Anti-Counterfeiting Agency announced a pending anti-counterfeiting bill and plans to introduce an anti-counterfeiting mark for locally manufactured goods that will allow recording of an Intellectual Property Right that can be scanned with a smartphone.

In all these countries, millions of illegitimate devices are discovered in the networks every year, and their experience shows that not only an effort at national level but also at a regional and international level can curb the influx of counterfeit devices in order to prevent the dangers that these devices present.


Resources: 

OECD Report 2016: Trade in Counterfeit and Pirated Goods
https://www.oecd.org/governance/trade-in-counterfeit-and-pirated-goods-9789264252653-en.htm

EUIPO/ITU Report 2015: The economic cost of IPR infringement in the smartphones sector
https://euipo.europa.eu/ohimportal/en/web/observatory/ipr-infringement-smartphone-sector

New tactics needed to stop smartphone counterfeiters, Magnus Moller Petersen, 2017: http://tradearabia.com/news/REAL_332640.html

Kenya: Mobile phones lead in trade of counterfeit goods - new study:
https://www.the-star.co.ke/news/2019/02/12/mobile-phones-lead-in-trade-of-counterfeit-goods-new-study_c1893006

Counterfeit Phones are Full of Surprising Dangers, Neil J. Rubenking, 2015:
https://uk.pcmag.com/security-software/72483/counterfeit-phones-are-full-of-surprising-dangers

Pakistan: Cellphone users get 10 more days for device registration:
https://www.khaleejtimes.com/international/pakistan/cellphone-users-get-10-more-days-for-device-registration

Fighting counterfeits: An open source system for identifying and blocking irregular devices in the networks:
http://spotafakephone.blogspot.com/2018/10/fighting-counterfeits-open-source.html

Latin American Countries taking action against Counterfeit and Stolen mobile phones:
http://spotafakephone.blogspot.com/2018/09/latin-american-countries-taking-action.html

Fighting counterfeits: An open source system for identifying and blocking irregular devices in the networks

Counterfeit and stolen mobile devices are a serious problem in many countries, in particular in South Asia, Latin America and Africa. Consumers are in danger of having their financial and personal data stolen, countries and their economies miss out on millions of dollars in lost revenue, and the national telecom networks suffer from those devices disrupting the quality of service. Another major impact of this shadow economy is the safety and security in these countries. 

Several governments have recognized the problem and are willing to tackle it. They are looking to industry to propose systems that will allow them to identify irregular and/or fraudulent devices and block them from accessing the national telecom networks. One such system is Device Identification, Registration and Blocking System (DIRBS), developed by Qualcomm Technologies Inc (QTI) and recently contributed to the open-source software community.

DIRBS is being implemented or considered for implementation in a number of countries. For example, in Pakistan, the Pakistan Telecommunication Authority (PTA) is launching DIRBS to ensure that stolen and lost phones, as well as phones with duplicate or non-standard identifiers (IMEIs) are blocked in the country, and to protect mobile phone users’ data across the country.

QTI contributed the DIRBS platform to the open-source software community in September 2018, and we have asked Mohammad Raheel Kamal, Senior Director at Qualcomm Incorporated, for more details.


What was your initial motivation in developing DIRBS? 

The multi-billion-dollar stolen and counterfeit phone business has widespread repercussions for consumers, governments, genuine manufacturers and the technology industry alike. According to a European Union Intellectual Property Office study published in February 2017 on the economic cost of IPR infringement in the smartphones sector, 184 million counterfeit mobile phones were sold globally in 2015 alone. What’s more, the estimated amount of sales lost due to these devices reaches a whopping 45.3B Euros. Despite the prevalence of this issue, governments have struggled to find effective solutions.

Illegal and counterfeit devices bring a multitude of issues, from environmental, health and safety, to unfair competition, tax and royalty evasion, and network quality issues. Consumers buying counterfeit products risk exposure to hazardous components as well as malware designed to steal personal information. Governments lose revenue from lost duties and sales tax and the ability to enforce protection laws relating to cybersecurity and intellectual property. Genuine OEMs lose revenue in competition with the less expensive counterfeit products, and the mobile network capacity is negatively impacted by such devices. In addition, these counterfeit devices do not offer advanced features and technologies that companies, such as Qualcomm, develop and bring to the market which benefit the entire ecosystem.

Qualcomm is focused on enabling our customers and the wider ecosystem, and one of the key ways we do this is through our Engineering Services Group – a team dedicated to helping the ecosystem deploy and optimize mobile technology. They developed a software platform that leverages each device’s unique identifier to combat the issues of counterfeit and stolen phones. The platform — called the Device Identification, Registration, and Blocking System (DIRBS) — baselines existing devices currently active in a country and checks newly activated devices. Specifically, it ensures they aren’t stolen, have been properly imported, have passed required certifications, and have properly allocated globally unique identifiers. Regulators can then take action to mitigate the devices that do not meet these standards from being registered with cellular networks.


What does DIRBS look like once deployed? How does it work? 

Every mobile device has a unique number, called an International Mobile Equipment Identity (IMEI) identification, allocated by the GSMA. Each IMEI corresponds to a given manufacturer and make and model. The DIRBS platform is used to create a country-specific database that interfaces at different levels of detail with operators, local manufacturers, importers, consumers, customs, law enforcement and the global GSMA IMEI database. The DIRBS analysis engine identifies fraudulent devices with an unauthorized IMEI and generates lists of these devices, which can be provided to operators so appropriate action can be taken per the country-specific regulations.

Given the importance of mobile phones today, the proliferation of counterfeit and substandard devices is a significant societal issue. We believe that IMEI network blocking is the most effective way to address the problem and discourage the import, sale and purchase of these devices.


How many countries are using DIRBS so far and what would you consider as the showcase implementation of the system? 

The DIRBS platform was first launched in Pakistan by the PTA. We would consider their DIRBS roll-out an excellent example of how implementation of DIRBS requires ecosystem coordination for a successful launch. Since Pakistan’s launch of DIRBS, the country’s stolen device issue has significantly decreased given the system’s ability to enable the blocking of all reported stolen devices from network access, which greatly reduces the incentive for mobile phone theft. The Device Registration Subsystem portion of DIRBS in Pakistan has addressed counterfeit device availability by identifying these devices prior to import and denying them entry.

In addition to Pakistan, we have been working with the government of Indonesia to deploy the DIRBS platform in that country, and we are discussing potential implementation of DIRBS in several other countries as well.

In Colombia, Qualcomm has been helping its government analyze device data since 2016, resulting in a decrease in the number of fraudulent phones with invalid IMEIs.


Why did you consider making DIRBS open-source? How will that change its real-life application?  

As mentioned before, governments have struggled to solve the counterfeit mobile device ecosystem issue for quite some time. This month [September 2018], we took steps to make deploying the DIRBS solution even easier by making DIRBS software and related documentation available under free open-source licenses. By doing so, we can ensure telecom regulators around the world have a comprehensive technical solution to assist in their efforts to combat the fraudulent device ecosystem. The DIRBS platform and updates made available by Qualcomm will be hosted on the open-source software website Github.

Making our DIRBS solution open-source will allow the mobile industry to rapidly adopt and deploy this powerful technology tool.


What are the conditions for successfully implementing DIRBS and getting a grip on counterfeit and irregular devices in the country? 

Implementing a platform such as DIRBS is just one step in addressing this broad issue. For DIRBS to be effective, it requires cooperation across the entire ecosystem.

A comprehensive enforcement policy, along with adequate legislation, is an essential first step. Operators must also cooperate by blocking blacklisted devices from the network. Consumers must check and confirm IMEI numbers at the point of sale before purchase.

Consumer education is also a significant factor in preventing the purchase of counterfeit devices. If consumers understand why registering their phones is important, and they know how to identify the IMEI number of their phone (typing *#06#) and how to check if it’s valid, they will be less likely to purchase a knock-off device.

While there is no magic bullet for resolving the counterfeit issue, the DIRBS platform and collaboration with key industry stakeholders is having a positive effect. Not only does the solution help the industry protecting the IP and removing fraudulent devices from the network, it has tangible benefits for governments, consumers and the mobile industry.

With DIRBS, Qualcomm is providing governments, consumers, operators, and manufacturers with a comprehensive approach to curbing the illegal mobile phone market. With our open-source approach, countries and their telecommunications regulators now have an effective solution to combat the stolen and counterfeit device issue holistically.  This is just one of the initiatives Qualcomm is working on behind the scenes — often unseen and unknown — to help the overall mobile ecosystem.



More information on how DIRBS works can be found in PTA’s consultation paper: http://www.pta.gov.pk/media/dirbs_cons_paper_220616.pdf

Qualcomm provides more information on its DIRBS website:
www.qualcomm.com/dirbs


The DIRBS platform is hosted on the open-source software website Github, and may be freely downloaded and used by any interested parties.

Latin American Countries taking action against Counterfeit and Stolen mobile phones

Counterfeit mobile phones pose many threats. For consumers the risks include preloaded malware intended to get the users’ financial and personal information, the non-compliance with health and safety requirements, and poor performing devices that drop calls and have lower data speeds due to cheap and poor quality components. For governments, these devices avoid paying duties and taxes and cost governments billions in lost tax revenues. As a result of these concerns, several countries in Latin America have begun to take concerted action to block these devices from networks.

Colombia: 17 million irregular devices blocked to date

In 2013, Colombia introduced a system in which telecom operators had to validate, verify and control handsets operating in their networks based on their IMEI number (1) and upload the data to a centralized database under supervision of the Colombian regulatory authority CRC. An information campaign via national newspapers, radio and television, as well as  through their customer care centers was carried out to inform users about the need for registration of their mobile phones, as well as danger of their devices being blocked if not. Importers of mobile devices have to register the IMEIs of their products in the centralized database and only devices passing the IMEI cross check are then allowed in the network. 

The implementation was spread over several stages and with the system now fully implemented, Colombia has blocked more than 17.5 million devices since its inception, with more than 142 million devices now in the positive database. While not all of these 17.5 million devices were counterfeit devices, many undoubtedly were, particularly as many had invalid or duplicated IMEI’s. 

Brazil: 1 million irregular devices coming online per month 

Brazil has also adopted a formal system to avoid the activation of counterfeit, substandard and stolen handsets on the national networks. This system is called the SIGA Project and includes a digitalized central system for identifying and blocking irregular handsets based on IMEI identification. Irregular devices are those illegally sold in Brazil, including devices which have been smuggled, stolen, without agency homologation and/or without a valid IMEI number listed in the GSMA database. 

With the SIGA Project commencing operation for devices activated after 22 February 2018, 

irregular devices are now being blocked. According to Brazil’s regulatory authority Anatel, a warning text is being sent to the irregular devices before they are blocked. Older devices (activated before 22 February 2018) and data-only devices such as modems, which cannot receive the SMS warnings, are not included in the program. Despite this, telecom providers in Brazil estimate that up to 1 million irregular devices join the networks every month.

Argentina: 3 million irregular devices entering the country each year

A similar approach is planned in Argentina, where the government plans to block devices for which the IMEI has not been submitted to the national regulator Enacom. It is estimated that around 3 million irregular and counterfeit devices enter the country each year and that the Argentinian economy loses up to 1 billion US dollar to this issue. People who purchase a device abroad will have to declare the device to customs when returning to Argentina to be able to use it legally in the country. 

Conclusion

The examples of Colombia, Brazil and Argentina, all show that countries are committed to fighting the growing threats faced by counterfeit, stolen and smuggled devices. These devices cost the government billions in lost tax revenue, lessen the quality of service of their national telecommunication networks and expose consumers to the theft of personal and financial information and in many cases, to outright dangerous and inferior goods. 

———————————————

(1) IMEI is the individual identification number of mobile phones, registered in the international GSMA database

Resources:

For an explanation of Colombia’s efforts see: https://www.itu.int/en/ITU-T/Workshops-and-Seminars/20180723/Documents/5_Hugo_Romero.pdf

For information on Brazil’s program see: 

https://www.bnamericas.com/en/news/brazil-to-block-irregular-phones-despite-carriers-concerns
& 

http://www.grupoibrace.org.br/en/anatel-gives-one-more-step-for-blocking-pirate-cell-phones-in-brazil/

And for information on Argentina’s program see: http://www.thebubble.com/stolen-phones-to-be-blocked-argentina/ 

Fakes & Counterfeits - what do you get for your money?

Like many of the Christmases over the past years, mobile phones and accessories were among the most popular gifts. Unfortunately, many of these gifts were probably counterfeit.

The numbers are staggering…

According to a March 2017 report by the OECD, one in five mobile phones sold worldwide is counterfeit! These numbers are supported by a sector-specific analysis from the EU Intellectual Property Office (EUIPO) covering 90 countries, which found that in 2015, 184 million smartphones were sold.

While African countries and emerging markets have long been the primary market for fake devices, the proliferation of e-commerce has also increased the sales of counterfeits and fakes worldwide, making it a truly global issue.

But what is a counterfeit device and what does it mean for the consumer?

Counterfeit mobile phones very often look and feel at first glance like the genuine device. Their outer shell and screen, the logos, the packaging and the included accessories are made to look like the real thing.

However, fake and counterfeit devices pose real dangers for the user, since by their nature they circumvent official checks and controls and rarely follow international standards for safety and security.

Most common drawbacks coming with counterfeits are: 

• they can contain hazardous substances in the hardware
•  they often come preloaded with malware and/or fake apps aiming to steel personal and banking information
•  they usually have poor performance with many call drop outs
• counterfeit accessories, especially chargers, are often a fire hazard
•  consumers have no warranty on these devices
•  in several countries, counterfeit devices get blocked from the mobile network

How to know if your device is counterfeit?

Together with Afilias, the Mobile & Wireless Forum (MWF) is testing a new device validation project. If you visit the www.spotafakephone.com website via your mobile phone, this embedded service can interrogate the device’s characteristics and compare these to those expected to be seen on a legitimate device. The user is then informed about what the device is saying about itself versus what kind of technical specifications would be found in the phone model it claims to be.

In case, you have doubts or realise that your device might be fake, you find some tips on how to report it here: http://spotafakephone.com/report-a-fake.cfm 

References and more information:

Tips on how to spot a fake phone: http://spotafakephone.com/how-to-tell.cfm

Report a fake phone: http://spotafakephone.com/report-a-fake.cfm 

Download the infographic: http://spotafakephone.com//docs/eng/MWF%5FCounterfeit%5FInfographic%2Epdf

Action Fraud article: https://www.actionfraud.police.uk/christmas

OECD Report: Trade in Counterfeit ICT Goods: http://www.oecd.org/gov/risk/trade-in-counterfeit-ict-goods-9789264270848-en.htm

EUIPO sector-specific analysis: The economic cost of IPR infringement in the smartphones sector: https://euipo.europa.eu/ohimportal/en/web/observatory/ipr-infringement-smartphone-sector

How Fake Phones deteriorate Quality of Service

Research shows that substandard and fake phones contain high levels of hazardous substances.  They also create higher levels of waste due to their low quality and the resulting need to replace them more often than high quality products. This is well known in the meantime, but did you also know that substandard and fake phones don’t operate well and cause interference with networks? Thus, that these phones deteriorate the Quality of Service (QoS).

For long the negative impact on Quality of Service (QoS) was only annoying but did not exceed a critical level. Nowadays, the stakes have changed: Regulators have started to boldly enforce regulations in order to ensure high Quality of Service (QoS). Operators get fined for missing QoS criteria. Moreover, regulators can and do ban operators from accepting new customers until the QoS will be enhanced.

One of the most recent examples for such regulatory enforcement is Nigeria.  In February 2014, the Nigerian Communication Commission sanctioned three out of four major network operators for breach of key performance indicators and poor QoS. Although the fined operators missed e.g. the ‘Call Setup Success Rate’ and the ‘Drop Call Rate’ closely, they missed them.

An INdT study  showed that substandard and fake phones failed in 26% of call attempts. 24% of established calls were dropped. Additionally, in places where a genuine phone could work perfectly, substandard and fake phones would not be usable because of their lower quality of transmission when compared to original phones. There were also issues with cell handover, the phone’s ability to maintain the call while moving between cells: handover time was 41% longer than original phones and 34% of calls were dropped during the handover. 

In 2012, Dr Eugene Juwah, the Executive Chairman of NCC, said that 60% of the mobile telephones in the country were substandard.  It would be worthwhile to investigate to what extent the affected Nigerian operators had not missed these criteria, if no or less substandard and fake phones were registered on their networks. Thus, increasing joint efforts to tackle the problem of substandard and fake phones would pay back for all.

More information: 

http://spotafakephone.com//docs/eng/MMF%5FCounterfeitPhones%5FEN%2Epdf , page 3 and 4

http://spotafakephone.com//docs/eng/MMF%5FCounterfeitPhones%5FEN%2Epdf , page 5

http://allafrica.com/stories/201402240689.html?viewall=1

http://www.mmfai.info/public/docs/eng/MMF%5FeComLac%5FCounterfeitDevices%5FEN%2Epdf

http://leadership.ng/nga/articles/50842/2013/03/25/ncc_warns_telecom_subscribers_substandard_phones.html