By Irfan Ahmed ISLAMABAD, Feb. 22 (INP-WealthPK): The manufacturing of cellphones by Samsung in Pakistan’s growing telecom industry would help boost teledensity, besides creating job opportunities. The world's biggest smartphone brand Samsung has started manufacturing phones in Pakistan which was made possible through a joint venture between Samsung and Lucky Motors Corporation. Speaking to WealthPK, Samsung Pakistan officials said that they had entered into a new manufacturing era, with monthly output projected to range between 250,000 to 300,000 units in Pakistan. “Local cellphone production will help reduce Pakistan’s dependence on mobile phone imports, thus saving billions of dollars foreign exchange reserves for the country,” they added. Samsung’s decision to start manufacturing cellphones in Pakistan has a lot to do with the government’s Mobile Device Manufacturing Policy (MDMP) launched last year. The Ministry of Industries and Production created the MDMP to strengthen the local economy and facilitate growth in manufacturing. The entrance of Samsung will help enhance competitiveness and the main beneficiary will be the consumer because local manufacturing will reduce the cost of mobile phones. Increased manufacturing will lead to more employment opportunities and also an increase in the average earnings. This strategy will allow Samsung to have a stronger local supply chain. In turn, local production of phones will help in reducing the cost of production as the labour cost in Pakistan is lower as compared to other countries. This lower cost will lead to low prices of the phones in Pakistan. Samsung has significantly reduced prices of four of its popular locally manufactured phones, WealthPK reported. Samsung’s A-series witnessed a sharp drop in prices. The price for Galaxy A52s 256 GB was reduced to Rs88,999 from Rs99,999. The price of Samsung Galaxy A52s 128 GB also came down from Rs 81,999 to Rs71,999 thanks to local manufacturing. Similarly, the price for A32 128 GB was Rs43,500, but now the new price is Rs39,999. Meanwhile, the price for A12 128 GB used to be Rs30,999, however, it was brought down to Rs27,500. Pakistan Telecommunication Authority (PTA) has approved 25 local and foreign companies for producing mobile devices (2G, 3G, and 4G) locally to produce 80% of phones in Pakistan by the end of 2022. These firms' smartphones will not only be sold in the country, but also be exported to several other countries. According to PTA, the number of locally-manufactured and assembled smartphones increased by 2.54 million in December 2021, bringing total output to 24.66 million in FY 2020-21, up from 13.05 million in FY 2019-20. In contrast, local phone production helps in reducing imports. Commercial smartphone imports declined to 10.26 million in FY 2020-21, down from 24.51 million in FY 2019-20, according to PTA data.

Source: PTA/WealthPK research

In the light of the MDMP, on January 28, 2021, more than 25 companies were issued MDM authorisation enabling them to manufacture mobile devices in Pakistan. The companies include renowned brands such as Samsung, Nokia, Oppo, TECNO, Infinix, Vgotel, Vivo, Realme, and Q-mobile. The successful implementation of the Device Identification Registration and Blocking System (DIRBS) along with conducive government policies, including the mobile manufacturing policy, have created a favourable environment for mobile handset manufacturing in Pakistan. Pakistan needs to move towards localisation from its current status of the assembling industry. It must be realised that it is more the role of the industrial sector than the government to go for modification and compatibility. The development would encourage expansion and collaboration of other big cellphone manufacturing industries in Pakistan as well as attract more foreign direct investment thus benefitting the economy of the country.