Smartphone imports through legal channel shot up 45.72 percent to 82 lakh pieces in 2016 from a year earlier, driven by the expansion of 3G services in Bangladesh.

Mobile imports through the legal channel crossed the three-crore mark for the first time, said Ruhul Alam Al Mahbub, president of the Bangladesh Mobile Phone Importers Association (BMPIA), at a press conference held at it headquarters in the capital yesterday.

It stood at 3.1 crore, up 11 percent year-on-year, with the total value of the imports coming to about Tk 8,000 crore. Smartphone imports accounted for Tk 6,500 crore.

Local brand Symphony, which happens to be the market leader in both the smartphone and feature phone segment, imported the highest number of handsets in 2016: 1.16 crore. Of the 1.16 units, 34 lakh are smartphones.

Samsung, which has been in the second position in the smartphone category, brought in 15 lakh units in 2016. Walton, another local brand, imported about nine lakh smartphones, to round off the top three spots.

“Our handset market is still dominated by feature phones, but smartphones will rule in future,” Mahbub said.

The importers are expecting that smartphones will account for 60 percent of the total mobile imports in 2017 and 80 percent in 2018, according to Mahbub.

“Although the sales of smartphones in 2016 did not meet expectations, we are optimistic about this year,” said Rezwanul Hoque, general secretary of BMPIA.

He went on to tip the smartphone market to treble in the next five years.

The official smartphone import figure would have been higher: a big chunk of the smartphones that are sold in Bangladesh enters the country through the illegal channels.

For instance, almost 90 percent of the Apple handsets available in the market at present are brought into the country through illegal channels and 40 percent of the Samsung handsets, according to Mahbub.

The reason for the big chunk of illegal smartphone imports is that there is about 25 percent tax to be paid if brought in through the legal channel.

“If the government reconsiders the tax issue then smartphone penetration will be huge over the next few years,” the BMPIA president said.

In 2016, the government logged in Tk 1,300 crore in duty and value-added tax from mobile phones.

“We can give the government this amount of money if they reduce the tax even more as sales will increase then,” he said.

Meanwhile, many local and international companies have shown interest in establishing an assembly line in Bangladesh but are put off by the tax structure, said Mohammed Mesbah Uddin, joint secretary of BMPIA.

Symphony and Walton, although registered as local companies, source their handsets from China and do not have any production facilities in Bangladesh.

Currently, the average price of a smartphone in Bangladesh is about Tk 3,000, and it is Tk 1,000 for basic and feature phones.

Bangladesh's mobile phone industry got a boost in 2012 and 2013 -- especially in the smartphone segment -- after the roll-out of 3G services.

In 2012, only 3 percent of the total mobile imports were smartphones, which climbed to 7.88 percent in 2013, 19.7 percent in 2014 and 21 percent in 2015, according to BMPIA.

Raquibul Kabir, senior vice-president of BMPIA, and ATM Mahbubul Alam, treasurer of the association, were also present at the event.