How Bangladesh rose to become a mobile manufacturing hub
Phone manufacturing grew into a massive industry in only five years, prior to which the market was entirely import-dependent
Before we knew it, mobile phones became an integral part of our lives and it is hard to imagine a day without the device, which has seen remarkable transformation from a mere handheld telephone to today's smartphones.
In the span of 25 years, prior to which mobile phones did not exist, the device has slowly integrated into essential aspects of our life – from entertainment, businesses, education to medical treatment, jobs and even research.
As it became increasingly vital, a massive market worth thousands of crores of taka has grown centring its production, sales and mobile-based major services including the financial transaction platform.
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Over Tk15,000 crore worth of handsets are yearly sold in the country, say industry insiders.
According to Bangladesh Mobile Phone Businessmen Association (BMBA) data, 12-13 companies have invested over Tk5,000 crore in manufacturing mobile phones and created more than 1 lakh employment. Yearly production capacity of these companies is more than 4 crore units.
More companies are waiting for the clearance to go into production with new investments.
Md Nizamuddin Jitu, president at BMBA, mobile phones have changed the lives of 16 crore people in the country including villagers.
Mobile phones, which have changed the lifestyle of people globally, were first introduced in Bangladesh in April 1993. Hutchison Bangladesh Telecom Limited (HBTL) started providing mobile phone service in Dhaka city using AMPS mobile technology.
The first commercial version of the mobile phone – Motorola DynaTAC 8000X – entered the global market in 1983.
Between 1990 and 2021, the number of mobile phone users in the world increased from 12.4 million to over 7 billion. The number is expected to reach 7.3 billion by the end of this year. In Bangladesh the number of mobile phone connections have exceeded 16 crore.
Leading mobile manufactures including Samsung, Nokia, Vivo, Xiaomi and Oppo have set up factories in the country. The 12-13 operational manufactures are supplying more than 90% of the market demand.
Pran RFL Group is gearing up to enter the market after Fair Electronic, Walton and Edison, the local industrial giants.
The manufacturing of mobile phones in Bangladesh grew to become a massive industry in the span of only five years and prior to that the market was entirely import-dependent.
Walton, the domestic electronics giant, was the first to begin mobile manufacturing in the country in 2017.
After they injected more than Tk1,000 crore in setting up their factories, the government started to offer various incentives including tax holiday and VAT exemption. At present, Walton alone has the yearly capacity to produce more than 70 lakh units of phones, of which smartphone production capacity is 12 lakh units.
Through establishing factories in the country, the company is not only meeting the demand of mobile phones, but also creating employment opportunities for a large number of people.
"We are now exporting to 7-8 countries including the United States," said S M Rejoan Alam, CBO, Walton Mobile.
"Walton's factories employ more than 4,000 people, including engineers and technicians. Besides, a large number of people are employed with the marketing of phones," he added.
After Walton, another local brand Symphony set up their mobile phone production factory in the country. At present, Symphony is producing about 5 lakh units of phones per month and it recently started exporting to Nepal.
Zakaria Shahid, managing director of Edison Group, says Symphony phones account for 28-30% of the country's feature phone market.
"Symphony has formed its own software development team that creates software, apps and games," added Zakaria.
In addition to Symphony and Walton, Techno is now assembling handsets of global brand TRANSSION Holdings in the country.
Global brands producing in Bangladesh
Samsung, the world's largest mobile handset company, built an assembling factory in Bangladesh in 2018. The factory at Fair Electronics in Narsingdi employs more than 2,000 people.
Korea-based electronic giant Samsung set up factories in Bangladesh to reduce its export dependence.
With the target of 60 lakh assembling capacity per year, Samsung invested more than Tk1,000 crore in their factory.
"We are now equipped to assemble all our devices in our factory and after March importing Samsung phones will not be required," said Mesbah Uddin Ahmed, CMO of Fair Electronics.
He said it would be the 'largest' technology-based industrial plant in the country.
In July 2019, Vivo inaugurated their new manufacturing plant in Rupganj Upazila, Narayanganj, which is their 5th global manufacturing plant. Vivo is all set to roll out the first mobile assembly plant in Bangladesh with full foreign direct investment, as international companies flock to the country to make the best use of the favourable tax regime. The plant in Rupganj will put together at least 10 lakh smartphones every year.
In November 2019 Global smartphone brand Oppo launched their manufacturing plant in Gazipur under the company name of Benli Electronic Enterprise Co Limited, which is also their 10th global manufacturing plant. Chinese handset maker Oppo is set to launch its "Made in Bangladesh" smartphones in the local market in November 2019. OPPO is also targeting to assemble 10 lakhs units of smartphones per year.
At least seven global brands including Xiaomi, Nokia and Lava have set up factories in the country in the last three years.
Industry insiders say almost all major brands have set up manufacturing as well as assembling factories in the country due to tariffs on mobile handset imports, tax holiday and VAT exemptions on local products.
Rezwanul Haque, former secretary of Bangladesh Mobile Phone Manufacturing Association, told The Business Standard, "Industries grow with policy support in any country. It was no different in Bangladesh."
The government first introduced a tax policy for the local assemblers in the fiscal year 2017-18 and it was revised in every budget till now.
Currently, there is 57% tax on smartphone imports and 32% on basic and feature phones. The tax for locally assembled and manufactured handsets is 18% and 13% respectively.
