Local mobile production starts in Pakistan
Aftab Ahmed
Three Telecom companies have started trial production of mobile phones in Pakistan.
M/s VIVO, M/s Airlink Communications, M/s Inovi Telecom are amongst the new investors in the local assembly of mobile phones, who have already started their trial production in February 2021.
The combined capacity of these three companies is more than 1 million mobile handsets per month whereas M/s Transsion Tecno, a Karachi based company assembling three famous brands including Itel, Infinix, and Tecno, has increased local assembly from 150,000 units to 650,000 units per month owing to increase in demand soon after the policy was launched.
In addition to the new entrants in mobile assembly, few experienced companies like G-Five and Q Mobile were already operating in the market, while M/s Samsung and OPPO are poised to enter local assembly in Pakistan market and are probably waiting for the implementation of approved recommendation of policy to remove sales tax on locally assembled mobiles from above USD 200 category.
By introduction of new players and capacity enhancement by existing companies, Pakistan will soon be able to meet major portion of local demand, which was around 3.6 million per month in CY 2020.
Mobile Device Manufacturing Policy 2020 was approved by the ECC May 2020 & ratification by the Federal Cabinet on 2nd June 2020. Engineering Development Board (EDB), a technical arm of the Ministry of Industries and Production (MoIP) was made the secretariat on Mobile Policy.
Through the active follow-up of EDB for removal of Withholding Tax from the supply chain of locally manufacturing phones, finalization of Authorization Document in coordination with Pakistan Telecommunication Authority (PTA), waiver of the license fee, removal of quantitative restrictions under Joint Ventures in mobile manufacturing and allowing multiple brands to be manufactured by respective companies, investments have started pouring into the sector, with new employment generation of more than 6,000 skilled and semi-skilled workers till date.
The mobile device manufacturing policy is one of the major achievements of the current government under the “Make in Pakistan” initiative and has the potential to be a game-changer in terms of its potentially huge impact on exports of the country. The policy was prepared by the active involvement of the Ministry of Industries and Production, Ministry of IT & Telecom, FBR, PTA and Ministry of Commerce.
Pakistan enjoys a low-cost labor advantage, a reasonably large home market having more than 178 Million subscribers which increased approximately 1 percent per month during the last one year, 83.3 percent teledensity and efficient Device Identification Registration and Blocking System (DIRBS) in place, which make Pakistan an attractive market for mobile assembly. DIRBS is a successful initiative of PTA which has effectively stopped the smuggling of mobile phones in the local market.
The local manufacturing companies are moving rapidly from 2-G non-android market to the 4-G smartphones as the local manufacturing has ensured the availability of mobile handsets at competitive prices to customers.
The policy has provisioned a 3 % export rebate for the local companies to enter the export market. From the initial success of the policy and increased demand in the local and international market, the local assemblers are optimistic about the export of locally assembled mobile phones.
The mobile phone manufacturing industry is expected to become larger than the automotive industry of Pakistan in terms of turnover in a few years and employment is expected to grow manifold.
To further boost the electronics sector, EDB has already started work on preparing the appropriate framework for local assembly of tablets, allied equipment, and mobile accessories in near future in line with its vision to improve the entire ecosystem and make this the fastest growing sector in terms of employment and exports in the near future.
