Legal basis and prior issuance
- The Circular is issued pursuant to the Radio Control Law, Act No. 3846, as amended.
- The Circular is issued pursuant to Executive Order No. 546.
- The Circular is issued pursuant to Republic Act No. 7925.
- The Circular amends MC 08-08-2004 and promulgates the consolidated full rules as MC 08-08-2004A.
- The Circular requires that entities wishing to be Mobile Phone Supplier/Distributor (MPSD) must be accredited pursuant to MC 1-04-88.
Policy and purpose
- The Circular establishes a primary purpose to enable the NTC to monitor and effectively regulate the purchase, sale, lease and/or retail of mobile phone units, parts and accessories.
- Regulation is required in the interest of the public.
Key definitions and covered entities
- The Commission means the National Telecommunications Commission.
- A Mobile phone means a handheld radio communications device employing cellular mobile telephone system (CMTS) and similar technologies, commonly referred to as cellular phones or cell phones, capable of transmitting and receiving voice, data and other multimedia services by means of radio waves.
- A Mobile Phone Supplier/Distributor (MPSD) is a person or entity accredited by the Commission to engage in the importation of mobile phones (including parts and accessories) from manufacturers and to sell/distribute them to mobile phone dealers.
- A Mobile Phone Dealer (MPD) is a person or entity authorized by the Commission to purchase mobile phones locally (including parts and accessories) from an MPSD and to sell to end users/customers.
- An MPD may put up multiple branches, with each branch paying the corresponding permit fees required under the Circular.
- A Mobile Phone Retailer/Reseller (MPRR) is a person or entity registered with the Commission to buy mobile phones (including parts and accessories) from an MPD and to engage in limited-scale buy and sell to end users/customers for a limited period.
Prohibitions and core operating rules
- No person shall engage in the business of an MPD, MPSD, and MPRR without first securing the necessary accreditation/permit/registration certificate from the Commission.
- No MPD and MPRR shall keep on stock mobile phones that are illegally acquired.
- No MPD and MPRR shall keep on stock mobile phones without NTC type-approval/type acceptance labels/stickers on the mobile phones.
- MPD and MPRR must register with the Commission all their available mobile phone units in stock or possession by submitting, on a monthly basis, the list of International Mobile Equipment Identity (IMEI) code(s).
- MPD and MPRR must also submit, on a monthly basis, a list of all subscriber identification module (SIM) numbers in their stock or possession.
- Regional Offices of the Commission must furnish the Telecommunication Planning and Development Department (TPDD) all monthly sales and stock reports submitted by authorized MPD.
- Applicants for authorization as MPD, MPSD, and MPRR must apply and secure the required accreditation/permit or registration from the Commission.
- Existing establishments engaged in buying, selling, leasing, and/or retailing mobile phones without valid permits/registration/accreditation must apply within thirty (30) days from the Circular’s effectivity.
- Failure to apply within thirty (30) days subjects the operator to closure and appropriate fines until required permit/registration certificates are secured.
- MPD and MPRR must strictly comply, in their purchase, sale, lease, and/or retail activities, with the Circular and other existing radio laws, rules, and regulations.
- MPD and MPRR are prohibited from acquiring, purchasing, selling, leasing, and/or retailing mobile phones from any unauthorized or illegal source.
- MPD and MPRR are prohibited from advertising the purchase, sale, lease, and/or retail of mobile phone units, parts, and accessories coming from any unauthorized or illegal source.
- MPD and MPRR are prohibited from possessing any inventory/stock of mobile phones, parts, and accessories from any unauthorized and illegal sources.
- An MPD must submit a monthly sales and stock report to the Commission.
- Authorized MPD and MPRR must properly identify their business and location by posting conspicuously at the entrance of premises a signboard of at least 50cm x 100cm showing: registered business name, type of services, full business address, and the MPD permit number.
Permits, registrations, application filing
- No person or entity may purchase, sell, retail, and/or resell mobile phones (including parts and accessories) without a valid MPD/MPRR Registration Certificate issued by the Commission.
- An application for an MPDP/MPRR Registration Certificate may be filed with the Regional Office where the applicant does business.
- Applications must include documents complying with NTC requirements.
- MPD requirements include: (a) duly certified true copy of SEC Registration Certificate and Articles of Incorporation or DTI Registration Certificate plus Business Permit from the proper Local Government Unit authorizing the MPD to engage in the business; (b) a copy of a valid dealership agreement with a mobile phone distributor/supplier accredited by the Commission; (c) a list of spare parts and accessories sufficient to cover warranty of mobile phone units for at least six (6) months or in accordance with the dealership agreement; and (d) proof of paid-up capitalization of at least PHP 100,000.00.
- MPRR requirements include: (a) duly certified true copy of SEC Registration Certificate and Articles of Incorporation or DTI Registration Certificate plus Business Permit from the proper Local Government Unit authorizing the MPRR to engage in the business; (b) proof of capitalization of at least PhP 50,000.00, which may be a certificate of deposit from a bank, or certification by the treasurer of the corporation or by the partners or by the owners of business assets, verified by the Commission; and (c) a Certificate of Stall Lease Agreement for conducting the business activity.
- The Circular sets the following fees and charges:
- Filing Fee: PHP 500.00
- MPD Permit Fee: PHP 2,500.00/year
- MPD Branch Permit Fee: PhP 1,500.00/yr/branch
- MPRR Registration Fee: PhP 1,500.00/year
- Mobile Phone Supplier/Distributor Accreditation: PhP 2,500.00/year
- Inspection Fee: PHP 1,500.00/year
- Non-payment of any required fees is a ground for denial, disapproval, suspension, and/or revocation of permits.
Permit validity and inspection process
- A permit/registration issued to a qualified MPD/MPRR is valid for one (1) year.
- The permit/registration is renewable upon presentation of continued compliance with the requirements.
- NTC technical staff must conduct an inspection prior to approval and issuance of MPDP and MPRR registration to verify conformance with minimum requirements.
- Non-conformances found in inspections must be noted and made known to authorized officials of the entity and/or the applicant.
- An applicant with noted deficiencies must be given a grace period of thirty (30) days to correct non-conformance.
- The applicant must notify the Commission for the schedule of re-inspection within the same period of thirty (30) days.
Administrative sanctions, fines, and procedure
- Any violation of the Circular by any person, corporation, or entity requires handling under the Circular and existing rules and regulations, including suspension, cancellation and revocation of permits, closure of the operation or establishment, and/or imposition of the listed fines.
- False statements made in the application or before the Commission are treated as a basis for administrative action and penalties under the Circular.
- Fines for violations are:
- Illegal purchase, sale, lease and/or retail of mobile phone acquired from any illegal source: PHP 5,000.00 (per unit/violation)
- Purchase, sale, lease and/or retail of mobile phones without NTC type approval/type acceptance labels/stickers: PHP 5,000.00 (per unit/violation)
- Illegal importation of mobile phone parts and accessories: PHP 5,000.00 (per unit)
- MPD/MPRR operating without valid NTC Permit, including closure of the establishment: PHP 5,000.00
- The Commission may suspend, cancel or revoke the permit of an authorized supplier/dealer found to have violated any provision of the Circular and other existing NTC rules and regulations.
- The Commission may proceed upon a complaint filed by any party or a violation report from authorized Commission personnel.
- The Commission must issue a Show Cause Order directing the respondent to show why operations and/or the permit should not be suspended, cancelled or revoked.
- The respondent must submit the required show-cause response and appear and produce evidence on the date and time stated in the Show Cause Order.
- The Show Cause Order provides a fifteen (15) days period from receipt by the respondent.
- Pending hearing and final determination, the Commission may issue a Cease and Desist order as circumstances warrant.
- The Commission may suspend the permit whenever, in its judgment, suspension is necessary to protect public interest.
Repeal and effectivity mechanics
- Any circular, memorandum, order, or parts inconsistent with the Circular are deemed amended or superseded accordingly.
- The Circular’s effectivity is tied to publication and furnishing of certified true copies to the UP Law Center: fifteen (15) days after publication plus the requirement of three (3) certified true copies.
- Adoption is made on 24 Jan. 2005, with signatories including Commissioner RONALD OLIVAR SOLIS, and Deputy Commissioners KATHLEEN G. HECETA and JORGE V. SARMIENTO.