Imports of mobile phones dipped to $198m in July-Oct

KARACHI: The import of mobile phones has been in decline for the last few months as local representatives of international brands cite different reasons for the recent trend.

The imports of mobile phones plunged 18 per cent to $198 million in July-October. Their imports clocked up at $753m in 2015-16 after increasing 4.15pc from a year ago, official figures show.

The director of marketing for Samsung Pakistan and Afghan­istan, Saad ul Hasan, said the arrival of feature phones with the per-set price of Rs1,700-2,200 has dwindled compared to the rising import volumes of smartphones that cost at least Rs4,000-5,000 per set.

The import of relatively low-priced smartphones in bulk does not make a big impact on the overall import bill of mobile phones, he said.

He stated that the number of 3G and 4G mobile phone users in the country is growing. However, the government’s decision to impose taxes and duties on the import of mobile phones in the 2016-17 budget has made mobile phones expensive.

Mr Hasan said the influx of mobile phones through grey channels continues to thrive and the phone sets without the approval of the Pakistan Telecommunication Authority (PTA) are openly on sale. He said imported or smuggled sets with broken seals are also available.

The government should check the arrival of these phones in Pakistan through illegal channels as it is hurting the legitimate imports, he added.

The loss to the national exchequer due to smuggling can be reduced if the government provides importers with a level playing field by reducing import duties. This will increase tax revenues while consumers will also get under-warranty products at affordable prices, Mr Hasan noted.

“The government should also take serious action against individuals and groups that are involved in the grey business,” he said.

According to Huawei Pakistan Deputy General Manager Fraz Malik Khan, PTA is considering the implementation of a new IT system January 2017 onwards that will allow only those devices that have approved IMEI numbers.

IMEI stands for the International Mobile Station Equipment Identity, a unique number given to every mobile phone.

All phone manufacturers will be required to provide IMEI numbers of their devices directly to PTA to ensure that their devices remain operational in Pakistan, he said. This step will control the illegal influx of mobile phones in the country, he added.

Offering a different view on the declining trend, he said mobile phone sales drop every year after Eid. “That is why there is a decline since September,” he said, adding that imports rise from December to February and then go down again until June.

Mr Khan said there has been a component shortage in China, which is the production hub for almost all mobile phone brands. Supplies of LCDs and other smartphone components for almost all brands have been thin, resulting in the decreased production of low-end phone models. “This is why the import data for all brands is showing a fall,” he noted.

Huawei enjoys an 18pc market share nationwide, but it goes up to 25pc in big cities. Its share is on the rise, he claimed.

The overall share of smartphones in total imports of mobile phones is around 40pc. The import of smartphones has not seen a significant increase since the introduction of 3G and 4G services. Out of 134m mobile phone subscribers, about 32m subscribe to 3G. The number of 4G and LTE users is 1.71m and 577,275, respectively.

In October, the share of smartphones in total imports dropped to 37pc from 43pc in March. The bar phone share rose to 63pc in October from 57pc in March. Total sales have remained more or less 1.4m sets per month March onwards. Mr Khan said a number of customers still cannot afford a smartphone worth more than Rs25,000.

The introduction of 3G and 4G services has not caused a significant increase in overall phone imports because these services are expensive and offer limited coverage across the country, he said.