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Mobile sets may be pricier

Md Hasan
Mobile phones can be costlier as the government may impose 25 percent duty on each mobile set import value in the upcoming budget, scrapping the existing provision of providing a flat rate of Tk 300 for such import, finance ministry officials said.
However there has so far been no indication to waive tax on SIM (subscriber identity module) card, and it may remain same at the existingTk800, the officials said.
If 25 percent duty is slapped on each mobile set import, the prices of the handsets, especially high-end sets, will shoot up. Prospective low-end customers will also feel the pinch hard as they will have to pay more for the market's lowest-priced handsets ranging now from Tk 2,000 toTk 3,000.
The mobile importers are now paying a fiat rate of Tk 300 for any handset, which will go up to Tk 500 in case of a Tk 2,000 handset if 25 percent tax is imposed.
The government earns around Tk 170 crore annually from mobile handset imports, while the earning from SIM tax is more thanTk 1,000 crore.
The possible tax structure for mobile set import and SIM cards will stand out clearly against the demands of the mobile industry stakeholders.
The mobile operators have been blaming their dwindling markets onTk800 tax on SIM cards over the last few months, especially when they have decided not to subsidise SIM tax anymore.
Following the operators' deci-sion to discontinue bearing the
SIM tax, the six mobile operators added a mere 0.94 million customers to their networks in the second half of 2008, which is 86 percent less than the same period a year ago. In the second half of 2007, they added 6.65 million customers.
Earlier a stiff competition and an obligatory subscriber acquisition target in line with licence agreement led the mobile operators to pay Tk 800 SIM tax on behalf of their new customers.
"SIM tax subsidising is no longer viable," said Ahmed Abou Dorna, chief executive officer of Banglalink, recently.
"Bangladesh has the potential for acquiring more than 55 percent penetration rate in the next five years. A high tax on the telecom industry is baring the development," Dorna said.
The mobile industry anticipates that the subscriber base will reach 95 million from existing 46 million by 2013 if the SIM tax is removed.
Mobile handset importers recently urged the government to cut import duty to Tk 100 from existing Tk 300 on each set in the upcoming budget, saying such a tax reduction will help users get quality products and discourage substandard handset imports.
Mobile handset imports increased by 92 percent to 60.82 lakh pieces in fiscal 2006-07, while the figure was 31.70 lakh in fiscal 2005-06. The imports shot up as the import duty on handsets was cut from Tk 300 in fiscal 2005-06 to 1 k 200 in fiscal 2006-07.
1 landsct imports in fiscal 2007-08 however witnessed a 13 percent downtrend as the government re fixed Ik 300 duty in that fiscal year when a total of 53 lakh handsets were imported.
hasan@thedailystar net