Mobile industry: growth, challenges and the road ahead

Over the past decade, the mobile phone industry has been a driving force in Bangladesh's economic and digital transformation. From creating thousands of jobs to empowering millions of users, it has become much more than a consumer electronics sector. Local manufacturing has grown significantly, supported by investments from both global and domestic brands. Today, smartphones are not just communication tools—they power mobile banking, e-commerce, online education, ride-sharing, and access to vital services across both cities and rural communities. This ecosystem has helped bridge the technology gap and enabled the rise of a new generation of digital entrepreneurs and tech-savvy consumers.

Opportunities ahead

The global manufacturing landscape is evolving, and Bangladesh is well-positioned to benefit. With rising production costs in China, the spotlight is shifting toward cost-effective alternatives, and Bangladesh offers a strategic advantage. With the right policy support and timely action, the country could realistically capture up to 10 percent of global mobile phone manufacturing, generating around $4 billion in annual exports and creating over 60,000 new jobs.

One key enabler of this growth is the expansion of the artificial intelligence of things (AIoT) ecosystem, which encourages the development of backward linkage industries, fosters innovation, and drives broader economic progress. Bangladesh has already achieved self-sufficiency in meeting local demand, opening the door for a new phase centred on exports. With targeted incentives and strong infrastructure, mobile phone manufacturing can follow in the footsteps of the readymade garment (RMG) sector. Just as garments have become a global success story, mobile phones have the potential to do the same—fuelling exports, creating employment, and placing Bangladesh firmly on the global tech map.

Key challenges

Despite the growth and potential, the industry is facing several serious challenges that threaten its momentum.

First, the grey market has emerged as the most critical threat to fair competition. With over 40 percent of mobile devices entering the country through illegal channels, compliant businesses are struggling to compete. This not only results in a significant revenue loss for the government but also undermines the confidence of legitimate investors and players in the ecosystem.

Second, inconsistent policies are driving up the total tax burden on officially manufactured devices. As a result, products in official channels are becoming less price-competitive, pushing consumers toward unofficial alternatives. Additionally, there is currently no clear policy for the manufacture of the AIoT devices, leaving a significant gap in a rapidly evolving segment.

Third, 4G adoption in Bangladesh remains slow despite the presence of adequate infrastructure. Factors like poor network quality, limited digital literacy, and costly data hinder usage, especially in rural areas.

Finally, Bangladesh lags behind in leveraging the global manufacturing shift, focusing mainly on local demand amidst the absence of export-driven policies and infrastructure to compete internationally.

What needs to be done

To move forward, a few focused policy actions are essential.

Neighbouring countries like India and Pakistan are gradually reducing total taxation to support their mobile industries, while in Bangladesh, the tax burden continues to rise. This imbalance needs to be addressed with a more balanced and competitive tax structure to ensure the sustainability of our market. Additionally, a solid, well-defined policy is urgently needed for the expansion of the manufacturing of the AIoT devices and mobile accessories. This will be crucial for unlocking growth in this emerging segment and attracting investment.

Most importantly, the government must introduce a comprehensive export-oriented policy, supported by the necessary logistics, infrastructure, and long-term vision to help the industry scale globally.

To control the grey market, the National Equipment Identity Register (NEIR) system must be activated without further delay. This will help enforce market discipline, protect legitimate businesses from unfair competition, and significantly boost revenue generation for the government.

With the right reforms and a shared vision, Bangladesh's mobile phone industry has the potential to become a key pillar of the national economy by driving innovation, boosting exports, and enabling sustainable growth for years to come.

The writer is CEO of ISMARTU Technology BD Limited and vice president of Mobile Phone Industry Owners' Association