KARACHI: Pakistan, having lower Gross Domestic Product (GDP) growth rate than war-affected Afghanistan, spent about Rs 79 billion in the fiscal year 2015-16 (FY16) on imported mobile handsets.

Although the World Bank considers Pakistan a lower middle-income country, but Pakistanis continued to spend lavishly on mobile phones last year as well. Mobile handsets worth Rs 78.57 billion were imported during FY16, showing an increase of 4.23% as compared to FY15. The country, with more than 133 million mobile phone subscribers’ base, imported Rs 73.22 billion in same period of FY15.

According to the latest data of Pakistan Bureau of Statistics (PBS), overall telecom imports saw a decline of 0.88 percent during the year under review as compared to same period last year. The total imports were recorded at Rs 142.42 billion against Rs 139.42 billion in the same period last year.

Other telecom apparatus import also witnessed decline of 6.48 percent during this period as it stood at Rs 63.85 billion in FY16 against Rs 66.19 billion in FY15. In order to earn more revenue from this dynamic trade, the government in the budget for this fiscal year has increased the sales tax rates on import of mobile phones.

Industry experts were of the view that spending of $1 billion on imported handsets is a burden on foreign reserves and is also increasing the trade deficit, adding that exponential growth in the telecom industry is also burdening overall imports.

The government is now considering providing incentives to top mobile handset and telecom equipment firms to consider manufacturing handsets and other equipment in Pakistan. Introduction of next generation technologies in Pakistan pushed the import bill up as people tend to buy updated technology and this factor has made the launch of 3G & 4G successful with its effect on the usage of mobile phones increasing its imports. It has been observed that out of all the imports 20% of the imports are of smartphones in the country, which has directly linked with the introduction of 3G & 4G data services.

Talking to Daily Times, Q Mobile Director Zeeshan Yousuf said, “Q mobile remained the top importer of the country last year as well, contributing more than 70% in total imports,” adding that rising demand of smartphones has given more boost to Q mobile’s volumes and values during the last year.

Nokia is the second largest importer and Voice mobile remained on the third place while Samsung and Huawei contribute most to the imports of mobile phones in Pakistan.

It is important to mention that apart from the legal mobile imports, thousands of mobiles were smuggled in the country using different gray channels, as used and refurbished sets were being imported in Pakistan annually from Dubai and other European countries on which the government was not earning a single penny.

Sources said that the gray import of mobile handsets remain the biggest challenge for the custom authorities, as when the government tightens legal import policy, then illegal import goes on the rise.