Pakistan’s Mobile Phone Manufacturing Surges 168% in First Five Months of 2024

The number of mobile phones manufactured and assembled in Pakistan has seen a significant increase, reaching 13.1 million units in the first five months of 2024. Pakistan’s mobile phone manufacturing surged 168% compared to the same period in the previous year, according to data from the Pakistan Telecommunication Authority (PTA).

In May 2024 alone, local mobile companies manufactured and assembled 2.23 million units, an increase of over 55% compared to May 2023. Topline Securities attributes this substantial growth to import restrictions imposed last year, coupled with a gradual economic recovery.

Currently, Pakistan fulfils 95% of its mobile phone demand through local manufacturing and assembly. This is a significant improvement compared to the last five-year average (2019-2023) of 67% and the eight-year average (2016-2023) of 47%.

Pakistan’s Mobile Phone Manufacturing Surges 168% in First Five Months of 2024

From July to February, mobile phone imports grew by 156.43% to $1.148 billion year-on-year. However, Topline Securities noted that manufacturers now produce or assemble all mobile brands except iPhones in Pakistan. This shift from imported mobile phones to local production has been significant in recent years.

The government’s announcement of a local mobile manufacturing policy in 2020 can trace this transformation. This policy aimed to encourage international mobile players to establish assembly plants in Pakistan. The affordability of locally manufactured phones, which are 15-20% cheaper than imported phones of the same quality, has also driven this shift.

In 2016, only 0.29 million units of mobile phones, or 1%, were assembled locally, while the remaining 99%, or 21.36 million units, were imported. Fast forward to the first five months of 2024, and Pakistan imported only 0.75 million units (5%) of its mobile phones, with local manufacturing and assembly accounting for 13.08 million units (95%).

During the first five months of 2024, 62% of the assembled units were smartphones (8.1 million units), while the remaining 38% were 2G phones (4.98 million units). Based on the current monthly production rate and the recent imposition of an 18% sales tax on all mobile phones in the Budget for FY25, Topline Securities predicts that total mobile phone demand may reach 30-35 million units in 2024, compared to 22.9 million units sold in 2023.

Within the listed sector, Air Link Communication (AIRLINK) stands out as a major beneficiary of the expanding market size and the growing share of local mobile phones. Air Link is currently trading at an FY24E price-to-earnings (PE) ratio of 8.4x and an FY25F PE of 5.4x. Similarly, 7% of Lucky Cement’s (LUCK) consolidated revenue comes from its mobile business, which will also benefit from the rising local demand for mobile phones. Lucky Cement is trading at an FY24E PE of 4.1x and an FY25F PE of 3.6x.

In conclusion, Pakistan’s mobile phone manufacturing and assembly sector is experiencing remarkable growth. This shift towards local production not only meets the majority of the country’s mobile phone demand but also provides economic benefits by fostering local businesses and reducing reliance on imports. As the market continues to expand, key players like Air Link Communication and Lucky Cement will capitalize on the increasing demand for locally produced mobile phones.

See Also: From Global to Local- What Mobile Manufacturing Means for Pakistan

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Onsa Mustafa

Onsa is a Software Engineer and a tech blogger who focuses on providing the latest information regarding the innovations happening in the IT world. She likes reading, photography, travelling and exploring nature.

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