Tuesday, 28 March, 2023

Tough steps needed to stop illegal imports, save forex reserves

  • Rezwanul Hoque
  • 30th January, 2023 07:08:35 PM
  • Print news

China-based global mobile phone set brand Transsion has strengthened its position in the country's market by setting up a mobile phone factory in Gazipur. From entry level to mid-range phones, Tecno and Itel brands have already started production in the country's market. The phones produced in the country are affordable to customers.

At present, all these brands together are meeting 90 percent of the local mobile phone demand. Out of this, about 40 percent of mobile phones are coming through illegal means. The brands except iPhone have factories in Bangladesh. So, all companies have stopped importing the sets as the country's factories have the ability to meet the needs of local demand. But, illegal mobile phones are posing threats to the country’s economy and foreign reserves.

The demand of smartphone was 1 crore and feature phone 1 crore 80 lakh in the last year. Currently, the mobile phone market in the country is around Tk 15,000 crore.

Now, the country’s biggest challenge is the illegal arrival of mobile phones. A total of 15 percent VAT and tax has to be paid for manufacturing mobile phones in the country. It must have to pay 55 percent tax for importing mobile set legally. The production capacity is not being utilised due to the increasing trend of illegal mobile phone arrivals, resulting in government’s loss of VAT and taxes.

Out of the Tk 15,000 crore mobile phone market in the country, the illegal mobile phone market is around Tk 6,000 crore. We are demanding of the government for a quite long time to stop arrival of illegal mobile phones. Every mobile phone has an IMEI number. The IMEI number of mobile phones manufactured in the country needs to be approved by the government. Only those IMEI numbers approved by the government should be active in the network of Bangladesh. The government took an initiative in this regard last year resulting in illegal mobile phone arrivals below 10 percent. As the government withdrew this decision, the trend of illegal mobile phone arrival also increased. The National Equipment Identity Register (NEIR) software, which was bought at a huge cost, is virtually closed.

The major problem of our country at the moment is the dollar crisis prevents us from importing raw materials. We have to import raw materials three months in advance for production in the country. Although, manufacturers are facing many problems to get the dollars, illegal phone dealers are not having any problem to get it. They are buying dollars through illegal means including hundi.

Due to the slow economic situation in Bangladesh, the sales of smartphone have decreased by 40 percent in November and December last year. We continued to produce the phones with some raw materials stocked. As Eid is imminent, our demand for raw materials increases. We are unable to import raw materials as per our requirement. The sale of mobile set will be less this year as country’s economy is facing a tough time. If the demand increases, our supply may experience some shortages.

(The writer is Chief Executive Officer of Transsion Bangladesh Limited)