Pak mobile phone industry on brink of collapse


Most companies have furloughed employees after paying them half of their April salaries in advance….reports Asian Lite News

Almost all of Pakistan’s 30 mobile phone assembly units, including three run by foreign brands, have shut down as manufacturers say they have run out of raw material amid import restrictions, putting the future of some 20,000 employees at stake, media reports said on Sunday.

Most companies have furloughed employees after paying them half of their April salaries in advance. They have been told that they will be called back as soon as production resumes, the Dawn reported.

A mobile phone manufacturer expressed sorrow that the companies had to send employees home in Ramzan, it said.

“My family has three mobile production units, and all are closed,” he said and pinned the blame on “incompetent and strange policies” of the Finance Ministry.

He was referring to government policies that have made it difficult for an importer to get a letter of credit (LC) � a document from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. This has stopped the imports of key equipment and components used in mobile phone manufacturing, Dawn reported.

The Pakistan Mobile Phone Manufacturers Association (PMPMA) informed the IT Ministry in a recent letter that the local mobile supply had almost stopped and the markets had also started to face mobile phone shortages.

The letter, written by the association’s Chairman, Haji Abdul Rehman, highlighted that the situation was equally troubling for consumers, who have to pay significantly higher prices for mobile sets manufactured locally.

Rehman told Dawn that the price of low-cost imported phones and the locally assembled units were getting close, which he said would eventually hurt sales of local sets.

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