"Mobile handset import sinks 68.5 percent in Jul-Dec -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

“Mobile handset import sinks 68.5 percent in Jul-Dec

By Muhammad Yasir

KARACHI: The share of mobile handset in the country’s import bill has plunged by 68.5 percent in the first half of the 2008-09 as compared with the same period of last fiscal year.

According to the latest data released by Federal Bureau of Statistic (FBS), the import bill
of the mobile handset, in terms of value, has shrunk to $115 million against $365 million
recorded in the same period of previous fiscal year.
In December 2008, the import bills of mobile handset declined to $77 millionagainst $103.24 million registered in December 2007, showing a decline of 84.7 percent.
Importers and dealers said that the high import cost owing to Rupee-Dollar parity and the increase in the duty on handsets’ import has resulted in this decline. Moreover, the prices of all handsets have also increased at retail level.

During July-December 2008, the government has levied several of duties to the tune of Rs 750 on the import of each mobile set, which has impacted their demand.

Dealers told Daily Times that the rupee devaluation against dollar has forced them to rely on their inventory stocks instead of buying fresh consignment.

Besides, the central bank’s step to increase 100 percent margin on Letter of Credit (LC) has restricted the ability of the importers to order new stock, they added. In this period of economic slowdown, the importers were given the extra burden of LC margin, which not only disturbed the growth plan but also decreased the buying power of the importers.

The categorisation of mobile sets as “luxury items” and putting a flat duty structure across the board has made a cell phone beyond the buying power of an average daily wages person, Adeel Hashmi Communication Manager, Nokia Pakistan Mobile (Pvt)
Ltd told.

All the cellular companies are witnessing a saturated market in the big cities. They are now planning to concentrate on the villages and small towns to increase their subscribe base. “The next million mobile users in the country will come from the small cities and towns, for whom even RslOO would make a difference,” Adeel added.

“Double-digit inflation has also eroded purchasing power of people who were our potential customers in the small cities and villages,” spokesman of international branded company told.
Cellular companies’ foot-print has increased to a number of smaller cities and towns but the growth in mobile users has almost ceased because the sale points of cellular devices are not available for the consumers.
The stiff competition among the retailers and avail-ability of cheap Chinese and local sets have helped maintain the sales of retailers in big cities of the country.

Source: Daily Times

Date:1/22/2009