Adolescents are slowly being recognized as a generation, worldwide, that may require different policy approaches to improve staggering statistics on their failing well-being, including mental health. By providing the support to allow the next generation to achieve better mental health outcomes, they are going to be more economically successful and the future economic growth of nations can be better assured. Adoption of mobile-based health interventions (e.g., mHealth) has garnered a lot of attention toward this end. While mHealth interventions are growing in popularity, many researchers/policy-makers appear to have neglected assessing potential (indirect) costs/negative consequences from their use. Evidence from the developed world shows strong associations between extensive cell phone use and negative mental health outcomes, but similar research is minimal in developing world contexts. Additionally, the bulk of work on the outcomes of mobile phone use is studied using a unidirectional approach with blinders to front-end motivations. Using primary data from a large-scale, school-based survey of older adolescents in southwestern Nepal (N = 539), this work investigates such a tension between mobile/smartphone usage as a true mobile health (mHealth) opportunity in Nepal or as a potential problem, introducing additional deleterious well-being effects from over-use. Founded in Basic Psychological Needs Theory (BPNT), robust results of analyses using full structural modeling approaches (and traditional regression-based sensitivity analyses) indicate support for the BPNT framework in explaining statistically significant positive associations between bullying and anxiety, as well as, negative associations between bullying and grit, including evidence to support the mediating role of problematic mobile phone use in these relationships. More than 56% of the sample showed indicators of mild to moderate anxiety and over 10% claim experiences of bullying, coupled with over 75% of the sample scoring above the midline of a problematic mobile phone use scale, all of which motivates the relevance of our findings. Potential policy implications of these findings, and mention of other intriguing avenues for future work are further discussed.