Firms gearing up to make smartphones locally

Locally assembled 4G-enabled smartphones are set to hit the market in a few months' time after seven firms have applied to the telecom regulator to set up plants.

One of the seven firms is the world's largest smartphone maker, Samsung, which will officially announce the development of its plant in Narsingdi in a press conference in Dhaka today.

The South Korean electronics giant has teamed up with local Fair Electronics for the project and will start commercial production within May, said the top official of the Bangladesh Telecommunication Regulatory Commission quoting the company's plan.

Both Samsung Bangladesh and Fair Electronics declined to comment on their plan.

But sources said the plant will assemble only 4G-enabled handsets and will gradually turn the factory into a full-fledged manufacturing plant. It has an initial target of assembling 50 lakh units a year.

Samsung will be joined by four others within a couple of months, while the other two plan to join the bandwagon soon, according to entrepreneurs.

The firms that have applied to the BTRC for approval said they would be able to cater 20 to 30 percent of the local demand for high-end phones initially.

Last year, Bangladesh imported Tk 10,000 crore worth of devices, meaning the local assembly will give the firms a Tk 2,000 crore to Tk 3,000 crore market share within a year, said Rezwanul Haque, a former general secretary of the Bangladesh Mobile Phone Importers Association.

“Our market has already become big and it is growing. So, we need to have the capability to cater to the market with our own products,” said Haque, also the chief executive officer of Transsion Bangladesh.

Transsion Bangladesh, the local chapter of a Chinese mobile phone maker, is developing a plant in Gazipur with a view to assembling 5 lakh units per month. The plant will go into commercial production by the end of May.

The local assembly will also help grow a good number of backward linkage industries in the days to come.

The backward linkage industries will manufacture batteries, chargers, headphones, mobile covers and other accessories, according to Haque.

In October last year, Walton became the first company in Bangladesh to set up an assembly plant for smartphones. Aamra Holdings, another local firm, also received a provisional licence and set up the plant.

It will begin commercial production at the end of Ramadan and will go for a soft launch in June, said AM Ehsan-ul Haque, chief operating officer for the smart solutions division at the company. Local market leader Symphony is seeking to set up a plant in Gazipur, a senior official of the company said.

Symphony is eying to launch its products ahead of Eid-ul-Fitr set to be celebrated in the middle of June.

Daffodil and Lava have also applied to the BTRC for licences to start assembling. Vendors said the local assembly would cut the prices of handsets by 10 percent to 20 percent.

 Last year, the BTRC finalised a guideline to encourage manufacturing and assembling of handsets in Bangladesh. The government also slashed customs duty for mobile parts by 24 percentage points to 1 percent. There is about 30 percent tax on the imports of finished mobile devices.

“So, assembling of handsets will be very profitable according to the new tax structure. That's why both local and global players are showing interests,” said an official of the BTRC.

According to the regulator, some of the companies are even targeting to export devices which will make Bangladesh a mobile handset exporting nation from an importing one. Last year, Bangladesh imported 3.34 crore units of handsets, according to the BMPIA. Besides, 50 lakh handsets enter the country illegally every year.

The government said the scope to set up the manufacturing or assembly plants will provide local entrepreneurs the opportunity to invest in technology and create jobs.