Impact of rising Dollar : Telecom imports drop by 32% in 5mth of FY14

Impact of rising Dollar : Telecom imports drop by 32% in 5mth of FY14

KARACHI: Robust dollar value against the rupee remained the major suppressor for the telecom sector's imports as the import of this sector declined by 32 percent to $514,046 in the first five months (July to November) of current fiscal year 2013-14 (FY14) as compared to $756,457 in the same period of FY13.
According to the latest figures released by Pakistan Bureau of Statistics (PBS), the mobile handsets import alone, dwindled by 7.22 percent to $ 265,654 in the first five months of FY14 as against the import value of $286,323 in the corresponding period of last fiscal.
Karachi Electronics and Small Traders Association President Muhammad Rizwan said that the continuous rising value of dollar against the rupee has played a major role towards the lesser imports this year.
Following the budget 2013-14, the dollar's value increased by almost 10 percent, due to which importers of this trade were compelled to reduce their import orders, as they had to make payments in dollar. 
PBS revealed that import of telecom group's other mobile accessories and apparatus contracted by 47.17 percent in the first five months of FY14 to $248,392 as against $470,134 in the same period of last fiscal year. 
Meanwhile, on yearly basis, telecom group imports including mobile phones and other apparatus decreased by enormously 66 percent in November 2013 to $95,800 as against $108,102 in November 2012. 
Likewise, mobile phones' import during November declined by 20.74 percent in the first five months of current fiscal year to $48,072 as against $60,652 in the corresponding period of last fiscal mainly due to lower demand by increasing dollar value.
Similarly, import of other accessories and mobile phone apparatus also decreased by 14 percent to $47,728 in November 2013 when compared to the value of $44,450 in the same month of last fiscal, PBS data added.
Imported mobile handsets sector witnessed a drop in imports after a long time while it was continuously on the rise for the last couple of years. Industry experts attributed this downturn to lower demand of the Chinese mobile brands connected with lessening purchasing power of public due to rising inflation after the budget 2013-14.
Industry experts were of the view that during the current fiscal year, initially Federal Board of Revenue's (FBR) tax imposition on the import of the mobile phone handsets had suppressed the imports, however, lately FBR, realising that the decision is hurting the industry progress, revised the decision.
After revision by FBR, the industry imports' figures had picked up pace again in September 2013. However, mounting dollar value corresponding to the tax imposition and revision combined hit the industry growth again.
On a monthly sequential basis, the PBS data also suggested discouraging figures as the overall telecom industry imports including mobile phones, mobile apparatus and accessories declined by 11.37 percent to the value $95,800 in November as compared to the import bill of $108,102 in October 2013.
The import of this sector will be diminished further due to recent decision imposed by FBR on the directions of Pakistan Telecommunication Authority (PTA). As per the new law, in order to curb misuse of SIMs, the government has disallowed those cell phones or smartphones that are being imported without any International Mobile Equipment Identity (IMEI) or with fake IMEI number.
Because of this law, the small importers of this trade will not be able to meet the guidelines of FBR and PTA as the mobile manufacturers in China only give IMEI numbers to importers of more than 5,000 pieces of one model of any mobile handset.

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