Grey market mobile phone ownership will present an increasing challenge for African mobile operators in 2009, despite a global drop in their circulation.

This is according to a WDSGlobal report which finds that, while reduced import taxes and component costs have moderated demand for low-cost grey market handsets across the continent, African consumers are showing increased demand for high-end feature phones – and these devices often can't be accurately identified, supported or configured to access data services on an operator's network.
This immediately threatens subscriber profitability, concludes WDSGlobal.
"Grey market handsets are defined as those sold through unofficial and unauthorised channels," explains Brett Thomas, regional GM: Africa at WDSGlobal. "The demand for high-end feature phones on the grey market is being fuelled by substantial savings of up to 50% and a desire to own a handset not available locally. Many are sourced from Europe and North America and sold through high street retailers, markets and online retailers."
The report cites four key areas of concern:
* Support calls may not be resolved effectively, either because of internal policy or because the operator does not have the knowledge to resolve a problem.
* Grey market handsets may not be correctly configured for high-margin data services such as mobile Internet. These handsets are typically limited to basic voice and messaging services.
* A parity of service is hard to achieve across the installed base of subscribers. Grey market handsets may not feature an operator's branded firmware or bundled applications.
* An operator may not detect a grey market handset attaching to its network or a subscriber making a handset switch. This can lead to incorrect CRM data.
Each of these areas can have a negative effect not just on profitability but also loyalty, suggesting that mobile operators need to build strategies and implement processes that allow them to cost-effectively manage grey market handsets on their network.
The way in which consumers acquire and share handsets is changing and mobile operators must decide where their support for the end-user finishes, the report warns. The grey-market for mobile phones is prevalent across Africa and many parts of Asia.
In some countries up to a quarter of all mobile users own grey-market handsets. Many handsets enter the grey market from overseas recycling schemes or distributors looking to offload unsold stock.