Home ›› 26 Apr 2022 ›› Front
Bangladesh’s mobile phone industry – once completely dependent on imports – has turned into a behemoth thanks to policy support and the ingenuity of manufacturers, with locally produced handsets now meeting more than 70 per cent of the country’s annual demand.
Bangladesh Telecommunication Regulatory Commission (BTRC) data reveals that the country produced around 3.42 crore handsets in 15 local plants, and imported another 1.52 crore phones in FY21.
Three more manufacturers are waiting for approval to join the domestic industry, while one has already secured government approval and is planning to launch production soon. The current market size for Bangladesh’s mobile handset industry stands at around Tk 10,000 crore.
Local manufacturers pay 5 per cent to 15 per cent tax on raw material imports, while handset importers pay 38 per cent tax. Domestic production of phones rose 16.32 per cent in FY21 when compared year-on-year.
Industry insiders say the domestic production has gone up significantly due to an effective price gap of 15 per cent to 26 per cent between imported and locally assembled smartphones, adding that the latter currently occupy 80 per cent of the sales.
Speaking to The Business Post, Posts and Telecommunications Minister Mustafa Jabbar said, “Local manufacturers are meeting most of the domestic demand for 2G, 3G, 4G and 5G enabled mobile phones.
“Within just four years, the government incentives and tech-friendly policies have helped Bangladesh turn into a handset manufacturer. We are well on our way to become an exporter of the commodity as well.”
The minister added that the industry currently employs around 15,000 people, and this figure will increase to 25,000 at the end of 2022.”
According to the BTRC, the country has around 7.71 crore 2G handset users, 4 crore 3G users and 5.92 crore 4G users. Meanwhile, GSMA data shows that 41 per cent of Bangladeshis use smartphones, while 59 per cent use feature phones.
Relatively young, but booming industry
Bangladesh began its foray into the smartphone manufacturing industry back in October 2017, when Walton – a local conglomerate - inaugurated the country’s first ever smartphone and tablet manufacturing plant “Walton Digi-Tech Industries.”
The company’s “Made in Bangladesh” labeled smartphones hit the market in January, 2018. Since then, the local mobile manufacturing industry has been growing at an exponential rate in terms of production volume and market penetration.
Walton sources say around 2,000 people work at their Chandra factory in Gazipur and the company produces 5 lakh handsets per month. The brand is now planning to expand its handset exports.
Other local handset manufacturers are Fair Electronics (Samsung), Edison Industries (Symphony), Alamin and Brothers (5 Star), Carlcare Technology BD Ltd (Itel and Techno), Anira International (Yunstar), Best Tycoon (BD) Enterprise Ltd (Vivo) , Grameen Distribution (Lava), Banglatronics Technology Limited (DTC), Benli Electronics Enterprise (Oppo), Okay Mobile, and Mycell Technology Limited, Vibrant Software (BD) Ltd, DBG Technology BD Ltd, Linnex Electronics Bangladesh Ltd, and RFL Electronics Ltd.
Another company, Okay Mobile, is planning to launch production. Industry insiders say the government incentives introduced since FY17 have encouraged foreign brands such as Nokia and Samsung to invest heavily in this industry. Chinese company Vivo launched its plant in Bangladesh back in 2019, producing international standard handsets locally.
Vivo Bangladesh’s Brand Manager Tanzib Ahamed said, “Vivo has achieved a sizable share of the local market within just three years of launching a plant here. We have made global technology much more affordable to local consumers.”
Another Chinese company Realme – with a 14 per cent share in the local market – is now one of Bangladesh’s top three smartphone brands. Realme is producing handsets in its Gazipur factory, employing more than 700 local employees.
Xiaomi – a popular brand of phones also from China – is also assembling mobile phones in Bangladesh. Their production capacity is 2,000 units daily, totaling around 30 lakh per year. The company employs 260 people.
Xiaomi Bangladesh’s Country Manager Ziauddin Chowdhury said, “In our Bangladesh factory, we have plans to produce the same amount of smartphones Xiaomi currently produces in India, China or Vietnam.
“This plant includes an investment of $1 crore in Bangladesh. The new factory will create more than 1,000 jobs.”
Plans underway to go global
Local manufacturers such as Symphony and Walton are planning to boost exports after fulfilling domestic demand. Walton – which began assembling phones for a foreign brand for export – dispatched its first shipment dispatched to the USA in 2020.
Ariful Ambia, executive director of Walton Hi-Tech Industries, said “Walton exports handsets under its own brand tagged “Made in Bangladesh” to the US and Nepal. As the first local brand with excellent quality, we received good response from both domestic and foreign markets.”
Fair Group, the local conglomerate that assembles Samsung phones, is also eyeing the foreign market.
Its Chief Marketing Officer Mohammed Mesbah Uddin said, “We are expecting to begin handset exports by 2023 or 2024. It is quite possible for the country to produce 95% of smartphones for the local market, and the industry is moving towards this target.” Symphony is currently exporting “Made in Bangladesh” tagged mobile phones to Nepal, and the brand has targets to reach four other countries – Nigeria, Sudan, Vietnam and Sri Lanka – in the next five years. Providing more details, Symphony Managing Director Zakaria Shahid said, “In October last year, Symphony exported about 15,000 mobile phones of three models directly to the Apex Group in Nepal. We sent another 10,000 handsets on January 22.
“We will export 10,000 products from Bangladesh to the Nepal market every month. We produce 10 lakh products per month in our factory, where 1300 people are working. They are all Bangladeshis.” Mentioning that every Symphony handset undergoes six layers of check-up to maintain standards, Zakaria said, “In terms of quality, our handsets are on par with the products available in the international market.”
Challenges for manufacturers
Manufacturers have pointed out that the industry is facing some challenges as well, especially the volume of illegal phones in the local market which is affecting sales, and the rising cost of raw material and transportation that is impacting prices. “Consumers are not getting the benefit of home-made sets as smugglers have flooded nearly half of the market with illegal handsets,” said Zakaria Shahid, managing director of Edison’s Symphony brand.
CEO of Techno Rezwanul Haque made the same allegation, adding that the illegal handsets are a serious hurdle for the local industry.
Meanwhile, Samsung’s Mesbah Uddin said, “The tax benefits have offered lucrative incentives to global brands for making them invest heavily in this sector. But due to rising global raw material and transportation costs, handsets cannot be sold at lower prices.”
Consumers on the other hand urged stakeholders to take the necessary steps to making higher quality smartphones available in the local market at lower prices. Mohiuddin Ahmed, president of Bangladesh Mobile Phone Consumers Associations said, “Recently, the BTRC has allowed Vivo phones to bring their repaired phones into the local market on nine conditions, but it is not still clear that those products are of good quality.
“Also, there is no testing lab to determine the quality of those refurbished phones.” He continued, “We have been demanding that a grey market be created for handsets so that customers can purchase their products at an affordable price. Many countries have such markets. But the authorities here have yet to listen to our recommendation.”
“The BTRC has a zero tolerance regarding the sales of unofficial handsets. It is an illegal and punishable offense as per the telecommunication act 2001 (amended in 2010),” BTRC Chairman Shyam Sundar Sikder recently told The Business Post.
