KARACHI: Cell phone manufacturing firms in Pakistan rolled out 7.6 million handsets in the first five months of the year, the country’s telecom authority has said, with top officials in manufacturing companies saying they were ready to export smartphones in the next six months.
Once the world’s seventh largest importer of mobile phones, Pakistan made local assembling of cellphones possible by implementing the Device Identification, Registration and Blocking System (DIRBS) in 2018. The system not only controlled the smuggling of mobile phones but also led to the local manufacturing of these gadgets.
According to statistics compiled by the Pakistan Telecommunications Authority (PTA), local manufacturing in 2020 stood at 12.6 million phones, including 10.42 million 2G devices and 2.22 million 3G and 4G sets.
“In the current year, about 5.34 million 2G and 2.23 million 3G/4G devices have been locally manufactured,” PTA, which keeps a record of cell phones produced in the country, said in response to an Arab News query. 
“In accordance with the Mobile Device Manufacturing Regulations issued by the PTA on 28th January 2021, a total of 19 companies who applied to the PTA for setting up mobile device manufacturing plants have been approved. A 10-year Mobile Device Manufacturing (MDM) Authorization has been granted by the PTA to these companies,” the telecom regulator added.
PTA said Pakistan’s total annual market size was estimated at 34 million handsets, adding that these included 20 million 2G and 14 million 3G/4G devices.
Pakistan has 85 percent tele-density with 183 million cellular subscribers. The country also has 98 million 3G/4G and 101 million broadband subscribers. 
To meet the growing market demand, 19 companies, mostly from China, have started operating in Pakistan. Other market players include Nokia, which is setting up its manufacturing unit in the country in collaboration with a local company.
“The MDM regulations allow both foreign companies as well as joint ventures between local and foreign companies to apply for manufacturing authorization,” the PTA said, adding: “The companies who have been issued authorization include both standalone foreign entities and joint venture companies who have partnered with a foreign brand to set up mobile manufacturing plants in Pakistan.” 
The prominent brands, according to the Pakistani telecom regulator, include Oppo, Realme, Vivo, Alcatel, Infinix, Techno and Nokia etc.
After the implementation of DIRBS, many foreign cell phone manufacturers felt the need for local production, say industrial players.
“It is a matter of survival,” Aamir Allawala, CEO of Tecno Pack Telecom, told Arab News. “In the coming days, all brands will have to ensure manufacturing in Pakistan. If anyone fails to do that, it will not be able to survive in the local market.”
Manufacturers say they are meeting about 60 percent demand of mobile phones through local production which is likely to increase to 70 percent by August this year. 
The companies are also optimistic to start exporting smartphones within a span of six months.
“The government had announced a three percent export rebate in its policy, but it has still not been implemented,” Allawala said, adding: “We expect that this will be implemented in the upcoming budget since export will become viable once the rebate is introduced.”
“With requisite incentives, Pakistan will start exporting mobile phones within six months,” he said. “We have a labor cost advantage since assembling rate is significantly lower in Pakistan. In China, for instance, the labor cost stands at $700 while in Pakistan it is around $125.” 
The Mobile Device Manufacturing Policy 2020 also predicts that in the next two to three years, local production can reach up to 80 percent of Pakistan’s total handset market demand if attractive tariff plans are offered to the industry. 
“This can result in the creation of at least 40,000 high-skill direct jobs in electronics and information technology industry and up to 300,000 indirect jobs in ancillary sectors,” the policy document reads. “A typical smartphone constitutes more than 60 parts, and its assembly requires manpower, where Pakistan can benefit from its low labor cost.”
Cellphone manufacturers in the local market say Pakistan has acquired the capability to produce all types of phones and is ready to manufacture 5G handsets when the network is rolled out by the end of the next year. 
“The 5G network is not available in Pakistan at the moment, so manufacturing of 5G mobiles is out of the question for now,” Allawala said. “But when the network becomes available, the manufacturing will also start.”
Local traders say Pakistan’s domestic market was inundated with imported smartphones a few years ago, though they were now being replaced by locally assembled devices.
“A majority of phones in the market are now coming from local assembling plants,” Muhammad Rizwan Irfan, president of the Karachi Electronic Dealers’ Association, told Arab News, adding: “The quality of local mobile phones is gradually improving, but they still need to focus on after-sales service.”
According to dealers and manufacturers, the price gap between locally assembled and imported phones is somewhere between 12 and 13 percent.
Asked about the manufacturing prospects of iPhone, Samsung, Huawei and other major brands in Pakistan, the PTA responded by pointing at the country’s overall market potential. 
“There is a huge appetite for the use of mobile devices locally and the government hopes it can be fulfilled through local manufacturing,” it said.