Technology adoption : Smarter phones to become the need of the hour

3G technology to boost smartphone market, increase mobile phone imports by 50%.

KARACHI:

The roll out of the next-generation mobile internet services will change a lot for everyone — even the common man.

But its biggest impact would be on smartphone sales in the country.

It is understood that once the 3G service kicks off in Pakistan, smartphone penetration is likely to increase with its sales also going higher.



United Mobile Director Ejaz Hussain revealed that currently smartphones form less than a fifth of the company’s monthly imports but the number will go up.

“Only 15% of our monthly mobile phone imports are smartphones. This number can increase by 50% within a year once 3G service is available in the country,” Hussain told The Express Tribune.

The rollout of 3G technology, Hussain says, will provide a strong boost to Pakistan’s smartphone market. Since the market largely remains untapped, he says every single player will benefit from this technology.

The country’s smartphone market is only 15% of the mobile industry but it is growing rapidly. With a couple of operators ready to launch the service shortly after the auction of the 3G spectrum – due next month – the demand for smartphones is likely to shoot up. It is, perhaps, this positive outlook that United Mobile, which had been one of the country’s major distributors for Nokia, launched its own smartphone recently.

The optimism of mobile phone makers ahead of the spectrum auction is also reflected in the country’s telecom imports. Mobile phone imports for the month of February, 2014 – the latest month for which data was publicly available – increased 20% to Rs6 billion compared to Rs5 billion in February, 2013.



Mobile phone makers operating in the country including QMobile, Nokia, Huawei, Voice have increased their marketing expenditure manifold, while running aggressive advertising campaigns to increase their market share.

“We are investing heavily in the Pakistani market in the coming years,” said Huawei’s Head of Marketing Faraz Malik Khan. “I believe that after the launch of 3G it will be an exponential growth. We have conducted smartphone penetration research in Pakistan and the results are fantastic.”

Nokia Pakistan, which once dominated the country’s mobile phone market, has also been active in an attempt to regain its market share. Last month, the Finnish mobile phone maker launched two phablets — a mobile device that combines the functions of a mobile phone and a tablet. The company is all set to launch its first ever Android-powered smartphone later this month as well.

“The 3G technology will give the required boost to the Pakistan’s telecom industry,” Country General Manager for Nokia Pakistan and Afghanistan Arif Shafique said. “It is only the next, natural step for the Pakistani market to become 3G-enabled. This would make the Pakistani mobile phone users feel more empowered when using their smartphones.”

Publicly available data shows mobile phone imports by value and not by units, making it difficult to figure out company-wise imports and market position of each player.

However, market sources said that Pakistan’s monthly mobile phone imports are between 2 to 3 million units – around 85% of these handsets are basic and feature phones and only 15% can be categorised as smartphones. The estimates are based on the tax receipts of the Federal Board of Revenue, sources say.

Besides legal imports, industry sources say that up to 150,000 mobile phones, including high-end brands like iPhones and BlackBerrys enter the country through the grey (illegal) market.

While mobile companies refrain from disclosing their import volumes, sources said that QMobile is the largest importer with nearly a million units followed by Nokia Pakistan that imports up to 400,000 mobile phones each month.

Among other brands, industry sources say Samsung imports up to 100,000 mobile phones on average, Voice Mobile imports around 200,000 and Huawei Technologies Pakistan imports up to 40,000 mobile phones. Huawei imports only smartphones.

Though the breakdown of imported units gives some idea of the market’s current position, it will be too early to predict as to which company will benefit the most once 3G is available.

QMobile – arguably the highest-selling smartphone brand – has certainly established a brand name during the last few years but the smartphone market is still in its infancy, say industry sources. The local smartphone market provides enough room for growth to every player. About 15 million people access internet through mobile phones but many of them use feature phones, they say.

Smartphones were once out of reach for most of the Pakistani mobile phone users. However, the advent of new companies that have reached a wider market by playing on price, the competition has risen.

United Mobile Director Hussain said the company offering the best combination of price and quality would stand out with the larger market share, insisting that smartphones worth $100 or below are likely to help in this regard.

Published in The Express Tribune, March 24^th, 2014.

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