'Half The Number Of Cellular Phones Smuggled In'

And this figure is expected to swell to Rs 645 crore by end of next year if smuggling of cellular phone handsets are not curbed.

Fifty per cent of the 1.5 lakh cellphones used in the country have been clandestinely brought in, said Ronald Thomas, director of the US-based giant Motorola.

In the recent Union Budget, the government not only slashed customs duty on cellular phones from the 72.5 per cent to 51.8 per cent but also shifted it to the open general licence category.

The move has not, however, discouraged the illegal operators. This is because the benefits have to be weighed against the zero duties imposed by countries such as Hong Kong from where most of the sets are being smuggled into the country. The price differential for a handset brought in the illegal market and through the official channels is as high as Rs 25,000.

 

This explains the reason why cell phone smuggling is rampant. All major players like Nokia, Ericsson and Motorola have repeatedly approached the government directly and recently through the CII to rectify this anomaly and bring duties down to single digit, said Thomas.

The cellular market is witnessing a major boom and from December onwards it will zoom due with the national coverage from the cellular service operators.

Though hand sets are sold in active collaboration with the cellular operators, Most of them show an inclination to sell the smart card which facilitates the phone.

The discouragement for smuggled sets is on the non-priority list of the cellular services operators, points out an industry source. This is because of cut-throat competition within each circle.