Production of 4G smartphones has plummeted by over 61 per cent year-on-year in the first quarter of this year, as import costs have increased for the taka's depreciation against the dollar.
Also, a shortage of the greenback has made it difficult to open letters of credit, while high inflation has worsened the purchasing capacity of many smartphone aficionados.
During the January to March period, local manufacturers made 14.23 lakh 4G smartphones, according to the latest data of Bangladesh Telecommunication Regulatory Commission (BTRC).
Around 36.39 lakh were made in the same period a year ago.
The smartphone market in Bangladesh witnessed a double-digit decline for the first time in seven years in 2022, according to the latest Market Monitor report by Counterpoint Research.
Meanwhile the feature phone market had grown slightly.
In its report, the global market research company said Bangladesh's smartphone shipments declined 23 per cent year-on-year in 2022.
The bad days are not going away anytime soon, which should ring an alarm for the manufacturers, said industry operators.
About 3.91 lakh 4G handsets were manufactured in January and 4.62 lakh in February
However, the figures rebounded slightly in March, with plants producing 5.7 lakh units of 4G smartphones.
The industry is hurt mainly due to high inflation and the unprecedented dollar price hike.
On top of that, the National Board of Revenue slapped a 5 per cent value-added tax at each of the sales stages, exacerbating the woes of the manufactures and consumers.
Besides, consumers have tightened their belts amid skyrocketing price hikes of most essentials.
"If we compare the sales of devices from Q1 to Q4 of 2022, the decline is 30 per cent in the final quarter of the year," said Rizwanul Haque, vice president of the Mobile Phone Industry Owners' Association of Bangladesh.
"The costly dollar price and difficulty in opening letters of credit are also hampering our growth," he added.
He said the manufacturers had a 10-year plan when making investments and stalling of natural growth causes concern for entrepreneurs.
In Bangladesh, local handset production has taken impressive strides in recent years, aided by the government's huge tax benefits unveiled in fiscal year 2017-18.
Since then, 15 plants have been set up, creating jobs for around 17,000 people. Another four plants are in the pipeline.
But now they are battling the drop in sales in the local market.
According to experts, the penetration of 4G technology, which enables access to faster internet, in a developing country can have a significant impact on its economic growth and social development.
In not only enables faster access to information and online services but also facilitates innovation and entrepreneurship.
"Because of low 4G, a lot of services like video and other digital services don't have enough users," said AKM Fahim Mashroor, chief executive officer of bdjobs.com.
"For services like online learning and different types of freelancing jobs and e-commerce, 4G compatible handsets that enable using high speed internet is a must," he added
Only 30.9 per cent of individuals own a smartphone and 39 per cent use the internet in Bangladesh, showed a preliminary report of "Survey on ICT Use and Access by Individuals and Households 2022" published by the Bangladesh Bureau of Statistics in late December last year.
It depicted a grim scenario when it comes to digital inclusion, contradicting the claims of government officials, who often paint a rosy picture of the country's digital advancement and connectivity.
Government officials often say there are more than 13 crore internet users in Bangladesh.
However, smartphone penetration is over 50 per cent among mobile phone users, according to the BTRC, which collects data from the mobile operators.
"There is no benefit if you produce cutting-edge technology devices but people can't afford it," said Telecom Minister Mustafa Jabbar recently.
"So, now we have to ensure devices at affordable prices," he added.
Source: https://www.thedailystar.net/business/telecom/news/4g-smartphone-production-down-61-q1-3298581