Samsung has come to an agreement with Lucky Motors to produce and manufacture smartphones locally. This milestone has been achieved after the efforts made by the government to attract investors into the telecommunication market.
Pakistan Stock Exchange (PSX) has issued a notification on Friday that confirmed the agreement between Lucky Motor Corporation Limited (LMC) and Samsung Gulf Electronics Co., FZE (‘Samsung’) for local assembly of phones in Pakistan.
Lucky Motors is a subsidiary of Lucky Cement Limited and is a big name in the business since they manufacture, assemble, market, distribute, and sell Kia and Peugeot branded vehicles, parts, and accessories in Pakistan.
The notice further added that the production and assembly of the Samsung smartphones will take place at LMC’s existing plant facility producing vehicles at Bin Qasim Industrial Park, Special Economic Zone, Port Qasim, Karachi.
The investment for production is to be discussed soon amongst the two parties and the production facility is expected to be completed by December 2021.
As the agreement proceeds, LMC has also filed an application to Pakistan Telecommunication Authority (PTA) for license authorization.
The minister of energy, Hammad Azhar took to Twitter to congratulate and confirm the news.
I congratulate Lucky Group and Samsung on entering into a JV to manufacture smart phones in Pakistan.
These positive developments are evidence of the success of DIRBS system that eliminated smuggling of phones. And then followed up by Mobile Manufacturing policy last year. https://t.co/UCEsF0dKVq
— Hammad Azhar (@Hammad_Azhar) July 16, 2021
Apart from LMC, other companies are also rumored to be in talks with Samsung. Market experts suggest that Samsung may prefer the option to form agreements with Korean companies operating in Pakistan owing to comfort level which it may not find with non-Korean firms.
The Engineering Development Board (EDB), an arm of the Ministry of Industries and Production (MoIP), approved Mobile Device Manufacturing Policy (MDMP) in 2020.
From March till June, Pakistan Telecommunication Authority (PTA) issued Mobile Device Manufacturing Authorization to 19 foreign and local companies for the production of mobile devices locally.
Press Release: PTA has issued Mobile Device Manufacturing Authorizations to 19 foreign and local companies for the production of mobile devices (2G/3G/4G ) locally. pic.twitter.com/zsAuGucdBb
— PTA (@PTAofficialpk) May 25, 2021
The licenses were issued under the Mobile Device Manufacturing (MDM) Regulations, 2021, issued by PTA in January 2021. The companies given the license include big names like Oppo and Vivo.
Speaking on the subject, a PTA spokesperson had said “The idea is to promote ‘Manufactured in Pakistan’ not only for sets but for the parts too.”
Read more: PTA hints at making off-net calls cheaper
Many international companies had been interested in the investment as they plan to export these locally made phones to the Middle East.
According to the agreement, within two years, 2pc of device chargers, 10pc of all mother-board assembly, 10pc of batteries, 8pc of total manufactured display screens and components, and 8pc of all plastic parts have to be manufactured locally.
Additionally, the license also applies to tablets, routers, dongles, tracking, etc.
This milestone will be advantageous for the growth of specialized industries in the telecom sector.
According to statics, in 2020 more than 32.8 million mobile sets were imported in Pakistan. The government aims to reduce this number with local manufacturing of mid-level and low-cost phone sets in Pakistan.
Pakistan has a huge market for the telecommunication sector as the overall investment in the telecom sector during the first eight months of FY21 crossed $465m. Similarly, Pakistan’s cellphone subscribers had crossed 183.48m till May 2021.