Illegal handset markets an open secret now

Traders blatantly post ads with replacement warranty

The alternative grey market for handsets is proving lucrative for traders, who no longer feel the need to conceal information about the illegally imported smartphones.

The traders now blatantly post ads of the illegal handsets at malls and on e-commerce sites as well as give a one-week replacement warranty for the same.

An investigation by The Independent revealed that most of these illegal handsets flooding Bangladeshi markets were mainly sourced from USA, Dubai, China, India and Hong Kong.

Earlier, illegal dealers hid such handsets in their luggage while entering the country. But now different strategies are being used. The illegal handsets are brought in as accessories with their upper and lower shells being kept separated, according to market insiders. These are then assembled here and delivered to the homes of customers, they added.

“There is a need to stop this channel otherwise the government will lose earning taxes. It will also pose a challenge to restrain the users of such illegally imported mobile phones,” said Bangladesh Mobile Phone Importers Association (BMPIA) vice president Rezwanul Haque. BMPIA president Ruhul Alam Al Mahbub informed that till 2017, the total amount of business of illegal importers was about Tk 7,000 crore and the amount of illegal importers was about Tk 3,000 crore. But in 2018, the amount of business of the smugglers increased to Tk 4,500 crore and the amount of illegal importers has felt to Tk 6,000 crore.

The legal import of mobile handsets in Bangladesh dropped by 17.85 per cent or 50 lakh units during January-September this as compared to the same period in 2017 due to the boom in handset sales in the grey market.

In January-September 2017, 2.8 crore handsets were imported, but the figure dipped to 2.3 crore units in the first nine months of this year.

The BMPIA president cautioned that unless the sale of illegal handsets was stopped and their import through under-invoicing was prevented, the authorised importers and local handset manufacturers would be in deep trouble.

Illegally imported handsets have already occupied more than 30 per cent share of the handset market, causing more than Tk 1,000 crore revenue losses for the government along with putting severe impact on the authorised importers and manufacturers, he added.

According to Mahbub, who is also the chairman of Fair Group (a distributor of Samsung phones), said around 90 per cent of total active i-phones were brought into the country illegally or by evading taxes. Xiomi handsets were also being imported in the same way.

“As many as 35 per cent of Samsung smartphones come to the market illegally through airports and land ports,” he added.

After the announcement of the budget, the import of handsets through illegal channels has increased, claimed Jakaria Shahid, managing director of Edison Group, the parent company of market leader handset vendor Symphony.

“The market is filled with illegal imports and low-quality counterfeit devices,” said Mohammed Mesbah Uddin, joint secretary of BMPIA.

There are also refresher handsets and customers are being cheated by buying the sets, he added.

 

Illegal handset markets an open secret now

Traders blatantly post ads with replacement warranty

The alternative grey market for handsets is proving lucrative for traders, who no longer feel the need to conceal information about the illegally imported smartphones. The traders now blatantly post ads of the illegal handsets at malls and on e-commerce sites as well as give a one-week replacement warranty for the same. An investigation by The Independent revealed that most of these illegal handsets flooding Bangladeshi markets were mainly sourced from USA, Dubai, China, India and Hong Kong. Earlier, illegal dealers hid such handsets in their luggage while entering the country. But now different strategies are being used. The illegal handsets are brought in as accessories with their upper and lower shells being kept separated, according to market insiders. These are then assembled here and delivered to the homes of customers, they added. There is a need to stop this channel otherwise the government will lose earning taxes. It will also pose a challenge to restrain the users of such illegally imported mobile phones, said Bangladesh Mobile Phone Importers Association (BMPIA) vice president Rezwanul Haque. BMPIA president Ruhul Alam Al Mahbub informed that till 2017, the total amount of business of illegal importers was about Tk 7,000 crore and the amount of illegal importers was about Tk 3,000 crore. But in 2018, the amount of business of the smugglers increased to Tk 4,500 crore and the amount of illegal importers has felt to Tk 6,000 crore. The legal import of mobile handsets in Bangladesh dropped by 17.85 per cent or 50 lakh units during January-September this as compared to the same period in 2017 due to the boom in handset sales in the grey market. In January-September 2017, 2.8 crore handsets were imported, but the figure dipped to 2.3 crore units in the first nine months of this year. The BMPIA president cautioned that unless the sale of illegal handsets was stopped and their import through under-invoicing was prevented, the authorised importers and local handset manufacturers would be in deep trouble. Illegally imported handsets have already occupied more than 30 per cent share of the handset market, causing more than Tk 1,000 crore revenue losses for the government along with putting severe impact on the authorised importers and manufacturers, he added. According to Mahbub, who is also the chairman of Fair Group (a distributor of Samsung phones), said around 90 per cent of total active i-phones were brought into the country illegally or by evading taxes. Xiomi handsets were also being imported in the same way. As many as 35 per cent of Samsung smartphones come to the market illegally through airports and land ports, he added. After the announcement of the budget, the import of handsets through illegal channels has increased, claimed Jakaria Shahid, managing director of Edison Group, the parent company of market leader handset vendor Symphony. The market is filled with illegal imports and low-quality counterfeit devices, said Mohammed Mesbah Uddin, joint secretary of BMPIA. There are also refresher handsets and customers are being cheated by buying the sets, he added.