Nearly all of Pakistan’s 30 mobile phone assembly units, including three operated by foreign brands, have closed due to a lack of raw materials caused by import restrictions.
The future of approximately 20,000 employees is in jeopardy. Many companies have temporarily laid off workers after paying half their April salaries in advance, promising to recall them once production resumes.
The Pakistan Mobile Phone Manufacturers Association (PMPMA) recently informed the IT ministry that local mobile supply has nearly stopped, and markets are beginning to experience mobile phone shortages.
Mobile manufacturers claim the industry needs imported parts and components worth $170 million monthly to operate at full capacity. However, due to a dollar shortage, the government has not allowed the opening of credit letters. According to the manufacturers, no letters of credit have been issued since late December.
Manufacturers fear that the State Bank of Pakistan has informally instructed banks not to support imports for mobile phone manufacturers nationwide. Local manufacturers have sent employees home, and 90% of Chinese experts have returned to their country. This situation has severely damaged Pakistan’s reputation as a mobile manufacturer.
From May to December last year, the industry was allocated a monthly quota of $83 million, about half the total LC demand. Manufacturers are concerned that foreign investors may withdraw their investments. Since April last year, Pakistan has been producing over 2.5 million phones per month on average, meeting about 90% of the total demand, with only high-end sets imported.
Muzzaffar Hayat Piracha, CEO of Air Link Communication Ltd, one of Pakistan’s largest smartphone distributors, manufacturers, and retailers, stated that Made in Pakistan sets have also been exported, which is an encouraging sign for the entire industry. However, with widespread closures, investor confidence is at risk, making it challenging to restart the industry. The mobile phone industry directly employs 20,000 young Pakistanis and indirectly creates another 20,000 jobs.
The PMPMA has requested that the government allow the import of parts in a reasonable quantity to enable the industry to operate at half capacity.
