Telecom import declines by 3.2 pc

ISLAMABAD: Telecom imports of country are showing negative trend and declined about 3.2% in quarter ending Dec 2010, mainly due to decline in cellular mobile handsets.

However, the other equipments imports increased in the same quarter by about 11.3%, according to a report issued by Pakistan Telecom Authority (PTA).

Last year, government imposed customs duty and regulatory duty (Rs 750 per mobile handset) that curtailed the import of mobile handsets. However, government abolished the regulatory duty (Rs 250/ per handset) and reduced the customs duty from Rs 500 to Rs 250/ per mobile handset that resulted into surge in the import of mobile handsets in Pakistan.

Reduction of import duty on mobile handsets from Rs 750 to Rs 250 was a prudent decision taken by the government, in order to further augment growth of telecom services in the country.

Another important reason to reduce the customs duty was to reduce the illegal import of handsets in the country, which in the end causes loss to national exchequer by evading custom duty. According to official data available, imports of handsets automatically increased right after the reduction in import duty and increase in total imports were witnessed in the reported period.

Total imports of US $ 388 million were recorded in first half of the FY 2010-11, as compared to US $ 329 million in the same period of FY 2009-10.

Official figures revealed that first two quarters of FY 2010-11 in comparison with previous two quarters revealed that the industry imported other telecom apparatus worth of US $ 300 million during JulcDec 10 of the FY 2010-11 whereas it was US $ 259 million in the same period of FY 2009-10.

Increased imports during the reported period are indicative of the fact that telecom operators are working on enhancing their capacities and quality of services, which in fact is beneficial to the country by generating more tax revenue and increasing access across the country.

Copyright APP (Associated Press of Pakistan), 2011