By Syed Marwan Shah

ISLAMABAD, Aug 18 (INP-WealthPK): The telecom sector of Pakistan is undergoing a significant transformation, resulting in the country becoming a net exporter of handsets rather than an importer, according to a latest report of the Pakistan Institute of Development Economics (PIDE).

The report said mobile phones were imported by Pakistan worth $2.065 billion in 2020-21, an increase of 50.75% from $1.369 billion in 2019-20. From $1.861 billion in 2019-20 to $2.593 billion in 2020-21, the overall telecom imports into the country increased by 39.33%. Manufacturers produced 12.27 million mobile phones in 2021, while importers imported 8.29 million phones.

The report said that a 51% increase in imports of handsets (worth over $2 billion) was observed in the fiscal year 2020-21. In parallel, Pakistan's trade sector discovered some potential and attempted to encourage the mobile phone industry through some quick reforms to become an exporter. To achieve this goal, Mobile Device Manufacturing Policy (2020) sets three key targets: localization, production, and exports. By implementing prudent policies, Pakistan has become a handset exporter.

The report stated that the country was primarily an importer of mobile phones until 2021, with imports valued at $2.065 billion in 2020-21. After realizing the potential of the market, the country decided to move towards the export of mobile phones. In the recent past, it has been able to export 5,500 units of 4G smartphones – tagged as ‘Made in Pakistan’ to the United Arab Emirates.

The report added that public sector policy initiatives are of paramount importance in providing a boost to the telecom sector. Several factors may contribute to the rise in demand for mobile phones. This includes a reduction in taxes, changes in work styles and educational trends, preference for updated technologies, ease of use and time savings. 

The investment policy has targeted investment in telecom sector. Its effectiveness can be demonstrated by the presence of key new mobile phone investors in the country such as Nokia, Samsung, VGO TEL, Oppo. Following the first effective shipment of 4G smartphones to the UAE in 2022, the government has now set the mobile phone export target at $1 billion for the current fiscal year.

It was stated in the report that there would be employment opportunities for talented youth and local technical and semi-technical workers. It is estimated that Pakistan will create an additional 200,000 to half a million jobs as a result of increasing localization, production and exports.

The report concluded with some policy recommendations: Pakistan should maintain contact with new investors and firms and offer them policy incentives (when necessary) to keep them in the market. 

In the coming years, Pakistan must set production and export targets for mobile phones. In order to establish domestic market for mobile phones, some incentives are required, as well as ease of doing business.

The introduction of any necessary policy change must be in time to reap the full benefits. The development of a proper value chain is essential for the manufacturing of mobile phones.

Credit: Independent News Pakistan-WealthPk