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Tuesday, May 21, 2024

Biggest telecom companies set to enter Pakistani market as manufacturers

The incumbent government introduced the "Make in Pakistan" policy, which helped develop an ecosystem to support the mobile sector achieve its export goals.

Pakistan’s telecommunication sector is witnessing a tectonic shift. In a major development, the country is set to become a net exporter of mobile phones from being a net importer of it. Over the recent months, mobile exports have picked up. This shift is due to the change in policies regarding the import of mobile phones.

The incumbent government brought out the “Make in Pakistan” mobile phone policy to facilitate this change. Before the instigation of this policy, Pakistan was spending billions of dollars on the import of completely built units (CBUs).

According to a report by PTA, Pakistan imported 28.0 million mobiles in 2019 alone. Now, the country produces around 25 million phones as compared to the import, which only peaked at 9.74 million units from January 2021 till October. This is due to the growing local assembly facilities and plants introduced as a direct result of the mobile phone policy.

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In August 2021, Pakistan shipped its first-ever consignment of 4G mobiles to the United Arab Emirates. The consignment of 5,500 mobiles exported to the UAE was manufactured by Inovi Telecom.

Chief Executive Zeeshan MianNoor said that their main target was “to penetrate in low-end markets of Middle East, including Iraq, Iran, and Afghanistan.” The task to develop a conducive environment for smartphone manufacturing was taken up by this government.

The incumbent government introduced the “Make in Pakistan” policy, which helped develop an ecosystem to support the mobile sector achieve its export goals. As a result, domestic manufacturing mobile plants in Pakistan during the period of January to October 2021 produced 18.8 million mobile units, including 7.9 million 4G mobiles.

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In his interview with Global Village Space in November 2021, Prime Minister Advisor on Commerce and Investment, Abdul Razak Dawood, hinted towards export diversification, where he mentioned that Pakistan was looking to expand its export market to non-traditional markets.

The advisor to Prime Minister also mentioned that the Pakistan export industry was looking to incentivize the export of non-traditional products such as mobiles and electronics. As a result of these policies, the export of traditional products in non-traditional markets grew by 7 percent, and the export of traditional products in non-traditional markets grew by a whopping 60 percent.

The exports of mobiles is contributing to the foreign exchange earnings and employment generation. As per the latest report by the Pakistan Telecommunication Authority, local mobile manufacturers have in just seven months created 10,000 jobs.

As Pakistan seeks to expand its mobile exports, the world’s largest mobile manufacturing companies are showing interest in setting up mobile manufacturing plants in the country. In a recent tweet, advisor to PM on commerce and investment announced the launch of the Samsung brand in a joint venture with Lucky group in Pakistan.

The advisor further urged “local businesses to explore opportunities for similar collaborations in various sectors in order to become a part of the global value chain.” This was preceded by the Chinese company Xiaomi partnering with Airlink Communications to manufacture smartphones in Pakistan.

This rise in the export of mobiles is not just good news for the mobile sector but for the overall economy of the country. This would help cut trade deficits and attract foreign investments into Pakistan, thus creating a job market and increasing the country’s employment rates.

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Pakistan’s mobile sector is growing and developing at a robust pace. Provided that Pakistan maintains this conducive environment for smartphone manufacturing, more companies are likely to follow suit and enter the Pakistani market as manufacturers.