INP-WealthPk

Domestic Mobile Phone Production Surpasses Imports

October 28, 2021

By Omer Bilal ISLAMABAD, October 28 (INP-WealthPK): Cellular phone industry in Pakistan is showing steady growth with the number of subscribers reaching 186 million including 105 million subscribers of 3G/4G services. This upward trend reflects a positive uptake on Mobile Device Manufacturing (MDM) Authorisation regulatory regime introduced by the Pakistan Telecom Authority (PTA). The successful implementation of the Device Identification Registration and Blocking System (DIRBS) along with favourable government policies, particularly the domestic mobile manufacturing policy, has created a promising environment for mobile device manufacturing in Pakistan. Domestic production of mobile phones has exceeded the number of imported phones in the country. The government is taking concrete steps for the implementation of policy to attract big players towards cellular mobile manufacturing. According to the latest data shared by PTA, Pakistan is assembling 17.83 million mobile phones locally including 7.55 million smart 4G phones, while imports stand at 9.02 million. The total number of mobile phones assembled locally in the first nine months of 2021 has already surpassed the total number of locally assembled phones in 2020. Local manufacturing within the first year of the regime's introduction has resulted in the production of 12.27 million phones in a short span of seven months, including 4.87 million 4G smartphones. Currently, PTA has issued MDM Authorisation to 27 companies, out of which 24 have started operations, while the remaining are in the process of setting up their plants. Pakistan is also looking forward to developing mobile accessories locally. It's a massive market with huge export potential, as foreign companies can outsource accessories to Pakistani companies. According to the PTA spokesman, MDM regulations do not restrict any local or foreign companies from applying for the authorisation and a 100 percent foreign-owned company is also eligible to get it. Furthermore, the successful implementation of DIRBS has curbed informal import, thus enabling a fair business environment and level playing field for setting up manufacturing plants in Pakistan. Apart from other incentives, the government also offers the import of semi-knocked down (SKD) parts with zero custom duties for up to USD350. The policy has also contributed positively to the mobile ecosystem of Pakistan by eliminating the counterfeit device market, providing a level playing field for commercial entities. It has created trust amongst consumers due to the formulation of standardized legal channels for all sorts of device imports. The government introduced a comprehensive mobile manufacturing policy to encourage and attract manufacturers to establish their units in Pakistan. PTA in light of the policy issued MDM Regulations on 28th January 2021. Till now, 27 companies have been issued MDM Authorisation enabling them to manufacture mobile devices in Pakistan. The companies include renowned brands, e.g., Samsung, Nokia, Oppo, TECNO, Infinix, Vgotel, Q-mobile, etc. The telecom sector brought revenue of Rs41.5 to the exchequer in the form of GST while PTA deposits are Rs141.5 billion in FY 2019-20.