Mobile Imports Decline by 12 Percent in July-August 2016

Mobile phone imports in Pakistan registered decline of over 12 percent in the first two months (July-August) of the current financial year as compared to the same period of last year, after the government doubled sales tax for medium and high category/smart phones import.

According to the latest data released by the Pakistan Bureau of Statistics (PBS) mobile import registered over 22 percent decline in the month of August and remained at $46,503 against $60,010 during the same period.

Analysts are terming the heavy taxations as one of the main reasons behind the negative growth in Mobile import. The government has doubled sales tax for medium and high category/smart phones on the import of mobile phone sets in budget (2016-17).

The outcome in this regard has automatically been passed on to the consumers; directly hitting Mobile Phones imports and rates.

The increase in phone imports by the government may discourage the legal import through proper channels and result in increasing of smuggling, which is evident from the latest figures released by PBS.

According to the PBS, total imports of mobile phone stood at $92,704 in the first two months of July-August 2016 against $105,378 during the same period of last financial year.

Overall telecom imports saw decline of over 9 percent during July-August 2016 compared to the same period last year. Total imports were recorded at $174,469 during this period compared to $193,222 in July-August 2015, while registered 12.82 percent decline as compared to $114,945 during August 2015 as it is $100,208 in August 2016.

Other telecom apparatus import also witnessed a significant decline of over 6 percent during the first two months of current financial year as it stood at $81,765 against $87,844 during the same period of last year. When compared to August 2015, other telecom apparatus imports registered 2.24 percent decline as it was $54,935 compared to $53,705 in August 2016.

According to analysts, the telecom sector has become saturated with respect to infrastructure investment and other apparatus, therefore the decline in overall telecom import is justifiable.

However, in the next two years, smartphones are expected to cross 55 percent of mobile phone imports. Smart phone adoption in Pakistan is expected to grow due to expanding 3G and 4G networks (currently 3G services are available in more than 200 cities and towns) and more affordable Smartphones are available in the market.



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