By Syed M. Aslam
July 28 - Aug 03, 2003




MUHAMMAD NAQI has been associated with electronics market for over two decades. He has witnessed the blossoming of the electronics market along, and around the Abdullah Haroon Road in Karachi from hundreds of shops to nearly 4,000 retail outlets today. He claims that the market is the biggest electronics market anywhere in Asia, including Japan, as far as number of shops is concerned. However, he laments that despite contributing billions in revenues under various heads; Income tax, professional tax, sales tax, etc., it has not accorded the recognition that it deserves officially. Naqi, better known as Chand by friends and acquaintances, is a former vice chairman of Pakistan Electrical and Electronics Merchants Association and is currently a member of the Executive Committee of Karachi Electronics Dealers Association. He is pleased by the directive recently issued by the Governor of Sindh, Ishrat-ul-Ibad declaring Abdullah Haroon a VIP Road deserving special spic and span treatment and whitewashing of the buildings along it to enhance its looks.

PAGE: What's the most significant change the market has witnessed in the recent past?

MUHAMMAD NAQI: The mobile phones have totally changed the mosaic of the market during last 7 years. Two decades ago there were a cluster of around 1,000 big shops the sizes of which have shrunk to accommodate four-time more retail outlets today. Besides selling a range of electrical and electronics items the majority of these shops also sell mobile phones primarily due to high sales of sets, accessories and peripherals. Karachi has become the largest sales point of mobile phones in the country. The market is flooded with not only used phones but also by new ones finding their way into the country both legally as well as illegally.

PAGE: Will you please elaborate?

MUHAMMAD NAQI: According to estimates over two-third or around 1 million of the total 1.5 million mobiles sets operative in the country were issued in Karachi. In last six weeks alone, an estimated 125,000 mobile connections were provided by a single mobile operator in the city. Actually the number of mobile phone connections given in the city would be higher as two other operators are also giving the connections in the city.



PAGE: Why mobile phones have become such a saleable item?

MUHAMMAD NAQI: Karachi has become a dumping ground of used and refurbished sets, the primary source of which are Hong Kong, Mexico and the US. Hong Kong itself has become an international market of refurbished cellular phones followed by Mexico and the US. The demand for used and refurbished mobile phones in Karachi, and for that matter the rest of the country, is due primarily to the reason that Pakistan is one of the few countries in the world where Ems system is still operating. Though two of the four mobile operators are providing GSM technology the other two are still operating on the Ems system. However, one of them will be converting to GSM in September. While Hong Kong, Mexico and the US have become the major sources of these Ems mobile phones. The UK has recently emerged as a supplier of used GSMs sets. Lately, the Philippines has also started to emerge as the latest source of refurbished cell phones. The demand for used and refurbished cell phones itself is driven primarily by two factors, affordability and the fact that expensive phones become redundant with incessant introduction of newer models. Over two-third or around 65 per cent of all the mobile phones sold in Karachi are used while expensive and new sets are bought only by the aflluents.

PAGE: How do you view the role of dry ports up country?

MUHAMMAD NAQI: Across the world dry ports serve as 'sub stations' to facilitate exports. Here they are permitted to perform an entirely opposite function purpose, that is to serve as warehouses for imports. They are encouraging unethical practices the most hurting being mis-declaration and under-invoicing. The fact that many Karachi-based importers are using dry ports up country clearly proves that something is gravely wrong. Or why else these importers prefer to use dry ports instead of seaports in Karachi near their operational base. The practice defies any and all logic. Not only Karachi is deprived of substantial revenue by losing billions in customs and duties but the rampant unethical practices at these dry ports is also depriving the national exchequers of massive revenues.



PAGE: There is a plethora of complaints that mobile phone dealers never honour the warranty. Why?

MUHAMMAD NAQI: Individual dealers in the electronics market have started to issue their own guarantee at a cost to the buyers. They have followed the example of the four mobile operators who issue a one-guarantee at a cost which are meant not to be honoured. For instance, one-warranty for a Rs 5,000 set costs a buyer Rs 500. The dealers too have find it to sell a similar guarantee at a cost with intention not to honour it. Such useless guarantees are nothing but rip-offs and the menace need to be stopped by the authorities.