Mobile Handset Manufacturing in Pakistan

by Teleco Analyst on December 5, 2008

The Board of Investment (BoI) is considering to attract international mobile handset manufacturers to setup their plants in Pakistan. The issue was discussed yesterday in a meeting by BoI with the key telecom industry players. A media report on this is given below:

ISLAMABAD: Pakistan is importing 20 million mobile handsets annually, told the mobile handset importing companiesâ€™ representatives in a meeting with the Investment Board Chairman, Salim Mandviwala here.

Mobile manufacturing companies, LG, Nokia, Siemens Group, Telecom Foundation and Advance Telecomâ€™s representatives were included in the delegation, which told the State Minister and Investment Board Chairman that the spiraling mobile use and connections has shot up foreign investment in the country and in 2006-07 alone mobile handsets valued Rs1.34 billion were imported in the country.

Investment Board Chairman on this occasion assured government help in setting up the mobile handset manufacturing factories in the country. The meeting was also attended by all the mobile telecom services providing companies. (source: The News)

I was wondering how the journalist of The News came out with the number of Rs. 1.34 billion as with jus simple calculation, the number comes out to be Rs. 67 / per handset. Just divide Rs. 1.34 billion by 20 million handsets. So i think it must be 1.34 billion dollars which makes the average handset to cost around USD 67. Anyways, i believe Pakistan is a primarily second hand market and unless there is some major new features introduced in the handsets, the import of handsets will decrease from the 20 million mark that the media reported. The average life of the handsets is increasing with the advent of new technologies and hence the need for new mobiles reduces. The high end users of the market constitute a very small percentage of the market and their impact is not much in terms of the number of handsets. There might be a small increase in the import of handsets once 3G services are offered by the cellular operators as large number of sets used in the local market are not 3G enabled. This also starts a new discussion as to how much hindrance the availibility of 3G handsets will cause in the penetration of 3G services in Pakistan? In case the cost of 3G handsets is too high and impacts the penetration of the 3G services, the cellular operators might intervene and offer subsidies on the 3G handsets to the potential users. In any case, that is what we have to see once the 3G spectrum licensing is successfully complete in the country.

Therefore, if no major incentive is given to the local manufacturers, i don’t think that the idea of local manufacturing will materialize.

Mobile Handsets Pakistan