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KARACHI, Nov 11: The devaluation of the rupee against the dollar during the last 10 months coupled with imposition of Rs750 as tax on import of mobile phones in June has pushed up the price of almost 90 per cent of new cellular phones sharply.
In some cases, however, mobile phone prices have declined during the same period because of a worldwide policy of the cellular phone makers to slash its rates to counter poor response from consumers.
Market people and an authorised distributor of leading phone companies observed that the demand of mobile phones had slashed by 25 to 30 per cent since March. Rising food inflation, surging utility cost and economic conditions also made an adverse impact on the sale of new cellphones.
A random market survey reveals that the price of Nokia 1200 that was being sold at Rs1,975 in March has jumped to Rs2,700. Similarly, the price of Nokia 2600 has increased from Rs5,500 to Rs6,450. The price of Nokia N95 IGB special edition has increased by Rs1,500 and it’s now available for Rs36,000. The N81 8GB price has increased from Rs28,200 to Rs31,500.
Similarly, the Samsung U600 price has jumped to Rs16,000 from Rs13,000.
Consumers are confused as the prevailing market rates are much higher than the rates posted at the websites of authorized distributors. If a customer quotes the low price of any mobile before the authorized dealers’ outlet or even at open market retailers, they simply refuse to offer the phone at that price, saying that website rates are outdated.
An authorized dealer, who asks not to be named, says that a mobile phone’s price usually remains high at the time of its launch and comes down after three to four months. Citing the example of Nokia 6300, the dealer recalls that when it was launched its price was Rs18,000 and soon it came down to Rs11,700. But the devaluation of rupee against the dollar and imposition of import duty and taxes offset the impact of its falling price as it is now being sold at Rs15,500, he adds.
The dealer says that the users of low-cost phones have suffered the most as an average phone set with some features that was available for Rs2,000 in March now costs around Rs3,000.
Demand drops by 50pc
At Saddar’s mobile phone market, a dealer claims that mobile phones were selling like hot cakes last year. However, the sale dropped by 50 per cent during Ramazan this year and it failed to improve even after Eid-ul-Fitr.
There has also been a slowdown in the import of mobile phones this year, a leading importer says, attributing the decline to reasons like rising food inflation, increase in snatching incidents, higher sale of used phones and 80 per cent to 85 per cent import of low-cost cellular instruments.
The dealer claims that a year ago one million cellphones, both used and new, were being sold on average every month. It dropped to 0.8 million and
0.9 million in March this year and then to 0.55 million and 0.6 million now. Eighty five per cent sales now comprise low-priced mobile sets ranging between Rs2,000 and Rs4,000 mainly because of the rising cost of living.
An authorized distributor-cum-importer says that the number of customers who look for new mobile phones after every few months has also declined from last year’s 45 per cent to 25 per cent at present.
According to figures of Federal Bureau of Statistics, cellular phone imports in July-September 2008 plunged by 53 per cent to $83.2 million from $180 million in the same period of 2007.
Whenever the price of a commodity goes up, its impact is felt at the second hand and used items. Same is the case with the price of used phones which have also surged in proportion with those of new phones.
A distributor says that the government should rationalize the duty structure on mobile phone imports as it has done in car imports from low engine to higher capacity engines. Mobile phones are not luxury items and there should be different rates of duty as per its international price and quality, he observes.
The entry of Chinese low-cost phones (imitation of branded phones) and the availability of used phones in markets have also hurt the sale of new phones, he adds.
Despite the decline in demand this year the number of mobile phone users is increasing though at a slow pace.
According to figures of the Pakistan Telecommunication Authority, the cellular phone density has been increasing slightly. In September 2008, it stood at 55.90 per cent as compared to 55.62 per cent in July 2008.
Till December 2007, there were 76.88 million mobile phone users in the country while their number rose to 78.838 million in January and 90.2 million in September this year. Till a couple of months back, Mobilink had 31.35 million subscribers followed by Ufone 18.8 million, Telenor 18.47 million, Warid 16.15 million, Zong 5.01 million and Instaphone 321,134.
