n Pakistan, mobile phone services were introduced in 1990, and by 2005, there were 10 million subscribers. Since then, there has been a substantial increase in the number of mobile phone users; it is now believed that Pakistan has 195 million cell phone subscribers, placing it as the ninth-largest mobile subscriber nation in the world.

The country is emerging as a digital society, although digitisation is still in its early stages and is mostly utilised as a tool to speed up socio-economic development, especially in terms of enhancing digital and financial inclusion. However, Pakistan seeks to complete its shift to a knowledge-based economy through its Vision 2025 strategy, resulting in a globally competitive and successful nation that offers a high standard of living to all of its residents.

The mobile phone industry is essential to the nation’s digital development because it connects people, makes it possible to access a variety of online health, education and other services, and, last but not least, offers a platform for financial inclusion.

Pakistan is one of the top 10 nations in the world for mobile phone imports, making it a desirable market for international mobile phone manufacturers. The total annual market size is thought to be 40 million phones. As the market was heavily dependent on imports, the smuggling of phone devices remained a key problem until Pakistan Telecommunication Authority (PTA) launched its Device Identification, Registration and Blocking System (DIRBS) in 2018. The objective was to ensure the healthy growth of the mobile device ecosystem in Pakistan. The DIRBS ensures the use of legal devices on the mobile networks.

The requirement for International Mobile Equipment Identity (IMEI) registration under the DIRBS has led to an increase in imports via legal routes. Mobile phone imports in Pakistan were 21.6 million in 2016 and decreased to 17.2 million in 2018 (when the DIRBS was launched). The number of imported mobile devices rose to 28.2 million in 2019. The substantial increase of 64 percent in 2019 compared to the previous year shows that imports through grey channels have transformed into legal imports.

Local manufacturing also showed an increase in 2019 as the number of locally assembled phones rose to 12.84 million in 2019 as compared to 5.2 million in 2018. However, it is undeniable that imports have increased more than the local manufacturing units. Consequently, additional efforts were needed to benefit local manufacturing. It was determined that the country doesn’t have a policy on manufacturing mobile devices.

The government must take specific actions and establish the appropriate conditions for a better digital future. The economy of the country can benefit from this. Enabling home-based women workers can be one example.

In 2020, the government launched its first Mobile Device Manufacturing Policy (MDMP). This was a big milestone, as it has provided better opportunities for local mobile phone production and assembly. The policy encourages local mobile phone assembly and production while reducing import duties on raw materials brought in as completely knocked down (CKD) or semi knocked down (SKD) parts. Within a year, the landscape had changed, and all of the brands that had been selling their products in Pakistan had started assembling them in the country.

The PTA developed Mobile Device Manufacturing (MDM) Regulations in 2021 in accordance with the policy. Since then, around 26 companies have received MDM permission, allowing them to produce mobile devices in Pakistan. Well-known brands, including Samsung, Nokia, Oppo, TECNO, Infinix, Vgotel, Q-mobile, etc, are among them.

Local manufacturing production has surpassed that of imported mobile phones. In 2021, there were 10.26 million imported phones, and 24.66 million mobile phones were manufactured locally. According to the first quarter figures for the current year (2022), there were 7.16 million mobile phones produced locally and 0.61 million imported. Local manufacturing is also creating jobs for the youth and hence contributing to the employment ratio.

Unfortunately, just as local production was about to take off, it scrambled. The current economic crisis in the country caused the government to think about ways to stop the flow of dollars in order to stabilise foreign exchange reserves. Mobile phones were among the commodities whose import was restricted.

The import restriction was initially only supposed to apply to completely built units (CBUs), such as the Apple iPhone. However, things changed. Local manufacturers were also unable to bring in CKD and SKD kits due to the government’s strict requirements, such as a 100 percent cash margin requirement, and the State Bank has to approve the opening of a letter of credit before any import is authorised. The local manufacturing sector has been severely impacted by these conditions because more than 95 percent of the phones produced in Pakistan are made using CKD and SKD kits imported from abroad.

Decline in production of mobile phones is the immediate impact of this; the sellers and the investors are also affected. For the manufacturers of mobile phones, the position is difficult. Some of them had to let go of employees they had trained a little over a year ago when the new policy was implemented.

The government must take specific actions and establish the appropriate conditions for a better digital future. The economy of the country can benefit from this. Enabling home-based women workers can be one example.

It is estimated that around 8 million women in Pakistan are home-based informal workers. These women do not earn a fair price for their abilities and work since they do not have direct access to the market. The middleman reaps big profits. Furthermore, they are generally unrecognised and undocumented as contributors. It is important to enable women to use digital equipment and tools to have better access to the market. Women can have their own bank accounts and can use online banking tools. This access to digital technologies and banking services will breathe a new life into rural women’s economic activity.

The author is a communications specialist and a freelance writer. He is based in Rawalpindi and can be reached at: qureshiwaqas@gmail.com. He tweets @qureshiwaqasA