Will mobile phone prices rise again from July?

If you are planning to buy a new smartphone, you may need to make your decision within the next few days. From 1 July, the same handset could cost several thousand taka more.

In January this year, the interim government granted a 15 per cent customs duty concession on imported mobile phones. That temporary benefit is set to expire on 30 June. Unless a fresh decision is taken, the tax burden will increase from 1 July, a move that could directly affect retail handset prices.

Against this backdrop, the Mobile Industry Owners' Association of Bangladesh (MIOB) wrote to the Bangladesh Telecommunication Regulatory Commission (BTRC) on 18 June. In its letter, the association said that if the duty concession is not extended, the total tax burden on imported mobile phones will rise to 64.25 per cent.

The proposed budget for the next fiscal year does not include any announcement extending this duty concession for fully assembled imported mobile phones. As a result, the market is now waiting for the government's decision in the coming days.

According to MIOB, the higher tax burden could push up the prices of imported handsets by 20 to 25 per cent. Speaking to Prothom Alo, the association's president, Zakaria Shahid, said prices of components such as memory chips, motherboards, CPUs and batteries have been rising in the global market, making it impossible to reduce handset prices.

If import duties also increase, phones will become even more expensive. As a result, many buyers may once again turn to the grey market in search of cheaper devices.

In January, the government reduced customs duty on imported mobile phones from 25 per cent to 10 per cent. This brought the total tax burden, including VAT, advance income tax and other duties, down to 43.43 per cent. The concession, however, was granted only until 30 June.

Meanwhile, the proposed budget for the next fiscal year does not include any announcement extending this duty concession for fully assembled imported mobile phones. As a result, the market is now waiting for the government's decision in the coming days.

When asked about the issue, BTRC Chairman Major General (Retd) Md Emdad Ul Bari declined to comment.

Unofficial phone sales remain strong

Over the past decade, Bangladesh has developed a mobile phone assembly and manufacturing industry. Local factories mainly assemble low- and mid-range handsets.

However, industry insiders say many premium models from brands such as Apple, Google, Huawei, Motorola, Samsung and Xiaomi cannot be commercially manufactured locally because of complex supply chains, specialised components and limited market demand.

Both ‘official’ and ‘unofficial’ mobile phones are sold in Bangladesh. Consumers are often more attracted to unofficial handsets because they are relatively cheaper, although the government loses revenue every year as a result.

To curb this trend, BTRC announced the launch of the National Equipment Identity Register (NEIR) earlier this year, aiming to bring grey-market phones under regulation.

At the same time, the government reduced import duties to make officially imported phones more affordable. The idea was that narrowing the price gap between legal and illegal handsets would encourage consumers to purchase officially imported devices.

However, the expected impact has not materialised. Even before the duty reduction took effect, prices of various smartphone brands had already increased by between Tk 500 and Tk 5,000, with traders citing rising global memory chip prices.

Meanwhile, the market for unofficial phones has remained largely unaffected, with such devices continuing to be sold openly in shopping malls across the capital.

Information technology entrepreneur Fahim Mashroor expressed concern over the prospect. He argued that smartphones are no longer luxury items but essential tools for education, earning a livelihood and accessing digital services. As a result, ordinary consumers will bear the brunt of any price increase.

Consumers will bear the burden

If the temporary duty concession is withdrawn, import taxes will rise once again. The higher cost will be reflected directly in retail prices, meaning consumers will ultimately bear the additional burden. Combined with recent price increases, the new taxes could make smartphones even more expensive.

Information technology entrepreneur Fahim Mashroor expressed concern over the prospect. He argued that smartphones are no longer luxury items but essential tools for education, earning a livelihood and accessing digital services. As a result, ordinary consumers will bear the brunt of any price increase.

Speaking to Prothom Alo, Fahim Mashroor said increasing smartphone prices would make access to digital services more expensive. He argued that smartphones should be treated as part of the country's digital infrastructure and that the tax burden on them should therefore be reduced.