In a bustling market in the capital, Samsung’s A-54 model mobile phone is priced at Tk 59,999 in an authorized showroom. However, a similar model from the same brand is available for Tk 38,000 at an unofficial store that sells unauthorized phones. Shopkeepers attribute the price difference to the absence of value-added tax (Musak) and import duty, which allows them to offer lower prices and maintain sales. The growing popularity of unofficial phones has led to a decline in the production and market share of local mobile phone manufacturers. Illegal phones, comprising 40% of the market, are often smuggled into the country.
Recent data from the BTRC reveals a sharp decline in mobile phone production. In April, the country produced 1.48 million phones, compared to 3.38 million in the same month last year. Domestic manufacturers face challenges due to the importation of around 40 raw materials, attracting an 8% import duty and a proposed 7.5% Musak in this year’s budget. The cumulative effect of taxes and fees results in a 16-18% cost increase for each phone.
The absence of duties on illegal phones contributes to their lower prices, creating an extensive market share. Manufacturers estimate that approximately 40% of the country’s mobile phone market, worth around BDT 60 billion, is occupied by illegal devices.
While local manufacturers have the capacity to meet 90% of the country’s mobile phone demand, they face obstacles due to complications in opening letters of credit, fluctuating dollar value, and competition from the illegal market. The Telecommunication Minister acknowledges the revenue loss and emphasizes the need for measures to curb the influx of illegal phones to restore balance in the market.
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