Mobile Phone Imports Fall By 15% In Q1 2016

Mobile phone imports in Pakistan registered massive decline of over 15 percent in the first quarter (July-September) of the current financial year as compared to the same period of last year, after the government has 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 imports registered over 20 percent decline in the month of September and remained at $53,855 against $67,482 during the same period of last year.

According to the PBS, total imports of mobile phone stood at $146,562 in the first quarter of current fiscal year 2016-17 against $172,860 during the same period of last financial year.

Analysts are terming the heavy taxation as one of the main reasons behind the negative growth in mobile import. The government has doubled sales tax i.e. from Rs 500 and 1000 to 1000 and 2000 respectively 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 on phone imports by the government may discourage imports through proper channels and result in increase in smuggling, which is evident from the latest figures released by PBS.

Overall telecom imports saw decline of over 11 percent during July-September 2016 compared to the same period of last year. Total imports were recorded at $277,694 during this period compared to $312,790 in July-September 2015, while registered 13.67 percent decline as compared to $119,568 during September 2015 as it is $103,224 in September 2016.

Other telecom apparatus import also witnessed significant decline of over 5 percent during the first quarter of current financial year as it stood at $131,132 against $139,930 during the same period of last year. When compared to the September 2015 other telecom apparatus imports registered 5.22 percent decline as it was $52,086 compared to $49,360 in September 2016.

According to analysts, telecom sector has become saturated with respect to infrastructure investment and other apparatus, therefore 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.