“In Europe, declaration for cell phones has been used for a long time,” reminds SonyEricsson service manager for Russia, Belarus and Ukraine Petr Ganelin. He expects that the new system will hit the gray market. However, the problem of the gray market will not be completely solved, says Dmitry Kuznetsov, manager of the Samsung telecommunications department in Russia. After all, a gray handset will always be cheaper than a legal one, which must be cleared through customs (the duty is 5% of the cost of the phone) and tested in a special laboratory or center (the costs are $2,000-3,000 for each model).

If the government approves the proposals of the Ministry of Information Technologies and Communications, it will become much easier for manufacturers to obtain permits to sell mobile phones in Russia. They will only need to declare the compliance of their new model with current standards and submit protocols for its testing in an accredited laboratory or center. After that, the new model will automatically become legal.

The declaration procedure is introduced by the Law "On Communications", which has been in effect since the beginning of 2004. According to this law, only equipment included in a special list is subject to mandatory certification. The press service of the Ministry of Information Technologies and Communications told Vedomosti that the Ministry has already prepared a draft of such a list and sent it for approval by other departments. The government must approve this document, but manufacturers have already managed to participate in its discussion. Representatives of several vendors told Vedomosti that they managed to convince the Ministry of Information Technologies and Communications that there is no need to certify subscriber equipment, including cell phones.

“Until now, the mobile phone certification procedure took about three months,” says Rafael Kuyanov, head of the certification department at Panasonic’s Russian office. This delayed the official release of new products in Russia that had already appeared in Europe, and contributed to the supply of grey goods from China, Central Asia, and the UAE.

Today, according to IDC estimates, on average every tenth phone sold in Russia is counterfeit. According to IDC's latest forecast, 26 million phones with an average price of about $140 will be sold in Russia this year, Simon Baker, IDC program manager for Central and Eastern Europe, the Middle East and Africa, told Vedomosti. If so, then in 2004 the volume of the Russian gray market will be about $364 million.

According to the new rules, registration of new models will take only three days, and taking into account testing of the devices – a maximum of one to two weeks. Victoria Eremina, public relations manager for Nokia Corporation in the CIS countries, hopes that the innovation will help the company's business in Russia, but its effect can only be assessed after the new system is up and running.

"We very much hope that the declaration mechanism provided for by the new law "On Communications" will be launched in the very near future," says Sergey Kozlov, head of the Motorola representative office in Russia and the CIS. According to him, Motorola will soon send declarations of conformity for several new models to the Federal Communications Agency and expects to begin deliveries to Russia by the end of October.

However, the declaration mechanism will allow the state to more strictly control the compliance of sold phones with standards than certification, believes Rafail Kuyanov from Panasonic. After all, in this case, all responsibility is placed on the manufacturer itself, and if the inspection reveals deviations of the product from the approved standards, the entire product can be recalled from the market.

Leading analyst at Mobile Research Group Eldar Murtazin notes that not only phone manufacturers are interested in the abolition of mandatory certification, but also distributors, whose profits are largely determined by the size of the markup on new mobile phones. When a new model is introduced to the market, where completely similar gray handsets are already available, it is already more difficult to sell it with a markup, says Murtazin. “We consider these innovations very timely,” confirms Tatyana Gulyaeva, head of the media and public relations department at Euroset. “If the certification process is accelerated, the gray share of new products supplied to Russia will decrease by at least 50%.”

A blow to the grey market