Title
Rules on Mobile Phone Dealers and Permits
Law
Ntc Memorandum Circular No. 08-08-2004
Decision Date
Aug 6, 2004
The National Telecommunications Commission establishes regulations for the purchase, sale, lease, and retail of mobile phones, requiring dealers to secure permits, maintain compliance with standards, and report inventory to ensure public safety and legal operation.
mobile phone
telecommunications
purchase regulations

Legal basis and regulatory context

  • The Circular is issued pursuant to Act No. 3846 (Radio Control Law), as amended.
  • The Circular is also issued pursuant to Executive Order No. 546.
  • The Circular further relies on Republic Act No. 7925.
  • The Circular is promulgated as additional rules governing the purchase, sale, lease, and/or retail of mobile phones and related items.

Purpose and regulatory intent

  • The Circular establishes that its primary purpose is to enable the NTC to monitor and effectively regulate the purchase, sale, lease and/or retail of mobile phone units, parts, and accessories in the interest of the public.

Core definitions and key terms

  • The “Commission” means the National Telecommunications Commission.
  • A “Mobile phone” is a handheld radio communications device employing cellular mobile telephone system (CMTS) and similar technologies, popularly 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 Dealer (MPD)” is a person or entity primarily engaged in the purchase, sale, lease and/or retail of mobile phones, including parts and accessories thereof.
  • A “Mobile Phone Dealer’s Permit (MPDP)” is a permit issued by the Commission authorizing the holder to engage in the purchase, sale, lease and/or retail of mobile phones, including parts and accessories thereof.

Scope: who must comply and what is covered

  • The Circular regulates the business of a Mobile Phone Dealer (MPD) involving purchase, sale, lease and/or retail of mobile phone units and their parts and accessories.
  • The Circular requires authorization from the NTC before any person begins business involving these activities as an MPD.
  • The Circular applies to any person or entity that engages in MPD activities covered by the Circular.
  • The Circular specifically prohibits dealings with mobile phones, parts, and accessories from unauthorized or illegal sources and requires compliance with NTC type-approval/type acceptance labels/stickers.

General prohibitions and operational requirements

  • No person shall engage in MPD business without first securing the necessary permit from the Commission.
  • No MPD shall keep on stock mobile phones that are illegally acquired and/or mobile phones without NTC type-approval/type acceptance labels/stickers.
  • MPDs must register with the Commission all available mobile phone units in stock and/or possession by submitting, on a monthly basis, a list of International Mobile Equipment Identity (IMEI) code for the units available.
  • MPDs must also submit, on a monthly basis, a list of all available subscriber identification module (SIM) numbers in their stock and/or possession.
  • The Commission’s Regional Offices must furnish the Telecommunication Planning and Development Department (TPDD) the Commission with all monthly sales and stock report submitted by authorized MPDs.
  • Applicants for MPDs must apply and secure the required permit from the Commission.
  • Existing and duly accredited CPE and radio suppliers and dealers must inform the Commission in writing within thirty (30) days from effectivity that they will engage in all purchase, sale, lease and/or retail of mobile phones.
  • Accreditation permits for CPE and radio suppliers and dealers must include the purchase, sale, lease and/or retail of mobile phones.
  • Existing establishments primarily doing the business of purchasing, selling, and/or retailing mobile phones without valid permits or accreditation must, within thirty (30) days from effectivity, apply and secure the permits required by the Circular.
  • Failure to apply and secure required permits within thirty (30) days subjects the operating person or entity to closure and the imposition of appropriate fines until the required permit is secured.

Operating guidelines for authorized MPDs

  • Authorized MPDs must strictly comply with the Circular and other existing radio laws, rules and regulations when purchasing, selling, leasing, and/or retailing mobile phone units, parts, and accessories.
  • Authorized MPDs must not acquire, purchase, sell, lease and/or retail mobile phones from any unauthorized or illegal source.
  • Authorized MPDs must not advertise the purchase, sale, lease, and/or retail of mobile phone units, parts, and accessories coming from any unauthorized or illegal source.
  • Authorized MPDs must identify their business and location by posting conspicuously at the entrance of their premises a signboard of at least 50cm x 100cm.
  • The signboard must clearly indicate the MPD’s registered business name, type of services offered, full business address, and the MPD sources.
  • Authorized MPDs must not have in possession an inventory/stock of mobile phone units, parts, and accessories from any unauthorized and illegal permit number.
  • Authorized MPDs must submit a monthly sales and stock report to the Commission.

MPDP permits, applications, documents, and fees

  • No person or entity may commence business or conduct operations in the covered activities without a valid MPDP issued by the Commission.
  • An application for an MPDP may be filed with the Commission’s Central Office or the Regional Office in which the applicant resides.
  • The application must be accompanied by documents complying with NTC requirements, including a duly certified true copy of the SEC Registration Certificate and Articles of Incorporation or DTI Registration Certificate and Business Permit from the appropriate LGU authorizing the MPD to engage in the purchase, sale, lease and/or retail of mobile phones and parts/accessories.
  • The application must include a copy of a valid dealership agreement with mobile phone distributor/supplier accredited by the Commission.
  • The application must include a list of stocks of spare parts and accessories sufficient to cover the warranty of mobile phone units for at least six (6) months or in accordance with the dealership agreement.
  • The application must include proof of paid-up capitalization of at least PHP 100,000.00.
  • The Circular sets application-related fees and charges as follows:
    • Filing Fee: PHP 180.00
    • Permit Fee: PHP 1,200.00/year
    • Inspection Fee: PHP 720.00/year
  • Non-payment of any required fees is a ground for denial, disapproval, suspension, and/or revocation of permits.

Permit validity, inspection process, and correction period

  • An MPDP issued to a qualified MPD is valid for one (1) year.
  • The permit is renewable upon presentation of continued compliance with the requirements stated for MPDP operation.
  • The NTC technical staff conducts an inspection prior to approval and issuance of an MPDP to verify conformance with the Circular’s minimum requirements.
  • Non-conformances found during inspection are noted and made known to the authorized officials of the entity and/or the applicant.
  • An applicant with noted deficiencies is given a grace period of thirty (30) days to correct the non-conformance.
  • The applicant must notify the Commission for the schedule of re-inspection within the same period of thirty (30) days.

Administrative sanctions and fines

  • Violations of the Circular by any person, corporation, or entity, and the making of false statements in an application or before the Commission, are dealt with through the Circular’s administrative consequences.
  • Administrative consequences include suspension, cancellation, and revocation of permits, closure of the operation or establishment, and/or the imposition of fines.
  • The Circular imposes the following fines:
    • 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 thereof: PHP 50,000.00 (per unit)
    • MPD operating without valid NTC Permit (including closure of the establishment): PHP 5,000.00

Suspension, cancellation, revocation procedure

  • The Commission may suspend, cancel, or revoke the permit of any authorized supplier/dealer of mobile phone units, parts, and accessories found to violate any provision of the Circular and other existing rules and regulations.
  • The Commission may act upon a complaint filed by any party or a violation report from any authorized personnel of the Commission.
  • When proceeding administratively, the Commission may issue an order directing the respondent to Show Cause within fifteen (15) days from receipt of the Order.
  • The Show Cause order requires the respondent to appear and produce evidence on the date and time stated in the order.
  • Pending hearing and final determination, the Commission may immediately issue a Cease and Desist order as circumstances warrant.
  • The Commission may suspend the permit when, in its judgment, suspension is necessary to protect public interest.

Repeal and inconsistency rule

  • Any circular, memorandum, order, or parts thereof inconsistent with the provisions of the Circular are deemed amended or superseded accordingly.

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