A nail in the coffin for mobile phone dealers


While stating that the import ban imposed by the Government will result in a shortage of mobile phones in the near future, President of the Sri Lanka Mobile Phone Importers and Dealers Association, Samith Senarath said, a sharp increase in the price of mobile phone accessories has also been reported.

Speaking to the media recently, Senarath stressed that imports of every type of battery, including the lithium-ion battery are banned. He added that Sri Lanka does not produce mobile phone batteries. Therefore, there is no way one can obtain a battery even to repair a phone in the future, he lamented.

It can be said with certainty that due to the shortage of mobile phones in the future, there will also be a scarcity of mobile phone accessories such as batteries, earphones, handsfrees, and speakers.

Senarath said, the main reason for the above situation is the sudden import restrictions that were imposed by the Government.

He further added that ‘solar’ batteries fall under the same category as mobile phone batteries. Senarath said, if solar batteries are also not imported, people using solar panels will have to switch to electricity.

Mobile phones have had a major impact on the way people work, socialise, organise, and entertain themselves.

Phones are now used in almost every aspect of our lives including business, research, browsing the Internet, listening to music, setting alarms, watching videos, and playing games.

One can be riding the bus and replying to work emails. Living in a society where a message can be sent in a second, communication has become instant. However, with the import ban on mobile phones and accessories, the Government has put both the customer and the dealer in jeopardy.

When Ceylon Today queried about the present situation from several mobile phone and accessory dealers, they all seemed to be very disappointed about the Government’s decision.

M.I.M. Asurdeen, the owner of Phone Palace, a phone shop situated in Borella town, lamented that the ban was imposed due to the forex crisis and that no type of mobile phone can be imported at present. He said, well-known brands such as Samsung, MI, and vivo do not come direct from China, but through Dubai. The phones that are imported through Dubai are much better than the ones that are directly imported from China, he said. He added that Dubai’s standards are very high. However, business has now come to a standstill.

“A majority of phone shops are rented. Most of the dealers at Liberty Plaza and Majestic City are also on rent. Therefore, operating costs are very high. Due to the shortage in the market and the fact that only a very few people can afford to buy mobile phones at the moment, our lives are in a precarious position,” he stressed.

He said, prices have soared over the past couple of months like he has never seen before. He added that a mobile phone which used to cost around Rs 23,000, now costs around Rs 47,000. Not only the mobile phones, but also the covers, batteries, earphones, and chargers cost more. 

“There was an increase in the prices before the ban was imposed recently. That was due to the forex crisis that suddenly arose, the prices went up then, but the ban has exacerbated the situation,” he said.

He also said, importers are facing difficulties because letters of credit are not being issued. He said, the Government, salespersons, and customers are all facing losses.

Customers are now repairing their broken phones without buying new ones, he lamented. However, there are phones that cannot be used even after repairing, but the customer would not understand that and because they cannot afford to buy new ones, they keep on facing difficulties, he said.

“For example, there are phones that do not support the ‘Zoom’ application. But the customer comes to the shop and requests to repair their phone to use the application. It used to cost around Rs 2,000 to repair the phone to use the app, now it costs around Rs 7,000. But it is not guaranteed that the application will work. The customer’s money will be wasted and the repair will serve no purpose,” he added.

Cut-throat competition

He said nobody in the mobile phone industry is banding together to seek solutions from the Government. It is always about cut-throat competition between the shops.

“Everyone is trying to sell a phone or repair them or trying to sell accessories of phones. Nobody will waste their time or lose their customers by going out of their shops,” he pointed out.

He said, a storm is brewing and thousands of people risk losing their jobs. He said as a result of the ban, mobile phones will not be available in the market in the future. “Then the phone shops will be closed down and everyone in the industry will lose their jobs. Disgruntled persons will then turn to theft.”

He contended that the only solution to resolve the crisis in the country is banning the use of unauthorised systems to obtain dollars, such as Undial and Hawala for at least eight months. He said, dollars should only be obtained through State banks. 

Mohommed Nakash, an employee of Mobile Point, another phone shop, also expressed his views on the present situation in the mobile phone industry.

“Due to the shortage of mobile phones and accessories, prices have been increased. Business is not yet affected because customers are still coming. Everyday there are people who need to buy phone covers, earphones, chargers, and speakers.

They frequent our shop and buy those items. It is a good thing that the mobile phone business is not seasonal. They need it in their everyday lives,” Nakash said.

“If we buy one item for Rs 100 from a wholesale vendor, we sell it for Rs 250. Because they urgently need the item, they buy it. Therefore, as long as customers frequent our shop, our business is saved,” he said.

He added that wholesale prices have increased fivefold and the only issue they have at present is the shortage of items.

“We used to buy one phone cover for Rs 120 from the wholesale vendor, however, now it is Rs 400. A battery used to be Rs 150 and it has increased to Rs 500. We buy items at these rates, we also have to sell these to the customers.

However, we cannot make a healthy profit. Some items now come without warranty cards, therefore, we also have to sell them without warranty cards, otherwise, we will be on the hook for the repair or replacement,” he stressed.

Nakash said the Government has imposed this ban only for four months. He said, the Government has done it to clear the stocks in the market. He added that if the Government does not lift the ban after four months, they will have to close down.

“Sri Lanka does not have the technology to produce items such as displays, tempered glasses, and earphones. We do not have the required machines to manufacture these items. If we had these machines, we could have been successful in the mobile industry. There are brainy citizens who can produce these items.”

The import ban also covers electrical and electronic goods. Ceylon Today spoke to the Manager of Singer Borella branch. He said refrigerators, air conditioners, hair dryers, and many more items that they deal in have been banned.

“These items aren’t produced locally. We import every item, but now, we won’t be able to meet customer demand. That will result in sales plummeting,” he stressed.

However, he said, the company still has stocks, therefore, they are managing. He said, there are over 500 branches islandwide, and a large quantity of items were imported to stock them. He added that prices have increased over the past few months due to the forex crisis.

He said, daily wage earners have dropped out and middle-class customers choose to pay in instalments. However, affluent customers seem to have no issue, he added.

When inquired about the company’s contingency plan should the import ban be extended, he said, the senior management of the company will decide on the next move.

By Aloka Kasturiarachchi