Lower Import Duties Rattle Pakistan's Mobile Handset Makers
|GFive Promo. Source: GFive|
Mobile Phone Demand:
There are currently 164 million mobile phone users in Pakistan, the 8th largest in the world. The current annual demand for mobile phones in the country is estimated at about 40 million units, according to Pakistan Telecommunication Authority (PTA). The fastest growing demand is for 4G smartphones.
According to Pakistan Bureau of Statistics, mobile-phone imports (HS Code: 8517.1219) reached $498 million in 5 months period from July to November 2019, 64% jump over the prior year. Fiscal 2019-20 imports are expected to reach $1.2 billion.
Earlier, the growth rate for 4G handsets jumped from 16% in 2018 to 29% in 2019. Imports of mobile handsets soared 69% from $ 364 million in 2018 to $ 615.7 million in 2019. Pakistan is world's seventh largest handset importer and the 8th largest mobile phone market.
|Pakistan Telecom Indicators. Source: PTA|
Pakistan Telecommunication Authority (PTA) has granted permission to 26 local companies for manufacturing out of which 15 are currently in production. Among those currently producing mobile handsets in Pakistan are: E-Tachi, GFive, Haier, Infinix and Tecno. They are producing 13 million mobile phones.
Domestic manufacturers claim that they can meet 80% of demand for mobile handsets over the next 2 to 3 years if they are sufficiently protected by higher tariffs on imports.
Domestic mobile phone manufacturing industry will save billions of dollars of precious foreign exchange. It will create tens of thousands of jobs and spawn new auxiliary manufacturing industries for parts, chargers, headphones, USB cables, cases, etc. In future, Pakistan could become a significant exporter of mobile handsets.
Pakistan's mobile handset market is the 8th largest in the world. Current annual demand is for 40 million units. Domestic plants produce 13 million units while the rest are imported. The import bill for Fiscal Year 2020 is expected to be about $1.2 billion. The country's nascent mobile handset manufacturing industry fears a serious early setback if the FBR decision to lower duties on imports of foreign made mobile phones is not reversed. It is being blamed on Tania Aidrus, Prime Minister Imran Khan's advisor on Digital Pakistan Initiative, who would like to increase availability of mobile handsets. Domestic mobile phone manufacturing industry will save billions of dollars of precious foreign exchange. It will create tens of thousands of jobs and spawn new auxiliary manufacturing industries for chargers, headphones, USB cables, cases, etc. In future, Pakistan could become a significant exporter of mobile handsets.
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