Nokia – a globally renowned handset manufacturer from Finland – is ready to launch its first production unit in Bangladesh, following other celebrated brands such as Samsung, Oppo and Realme.
Vibrant Software (BD) Ltd, a joint venture of UK based Vibrant Software and Bangladesh's Union Group, secured a provisional licence from the Bangladesh Telecommunication Regulatory Commission (BTRC) this March for manufacturing and assembling Nokia phones locally.
The conglomerate is presently waiting for clearance from the National Board of Revenue (NBR), and after getting it, they will open LC (letter of credit) for importing machineries and accessories to kick start the production process, industry insiders told The Business Standard.
It plans to invest around $40 million for setting up a factory and other infrastructure at Bangabandhu Hi-Tech City in Gazipur, said sources, adding that the production was set to begin before Eid-al-Fitr, but the company changed their plans amid the spike in Covid-19 infections.
Nokia made a comeback to the global smartphone market four years ago. HMD Global, the company behind Nokia's return, revived the brand by bringing new dimensions in the smartphone market and gradually developing its market share.
Nokia inarguably lags far behind its former legacy as the world's biggest phone brand, but its commitment to a bloatware-free user experience has helped it maintain a distinct identity, especially in the entry-level and budget segments of the smartphone market.
The brand will focus on the same segments in the Bangladeshi smartphone market too.
Grameen Distribution Ltd – a concern of Grameen Bank – applied for the vendorship of Nokia last year, but the BTRC had denied it, an insider with direct knowledge on the matter said.
After Nokia launched production in Bangladesh, the country will host production units from almost all of the world's renowned mobile brands, excluding Apple, Xiaomi and Huawei.
Responding to a query, Union Group Managing Director Raquibul Kabir said, "We will produce Bangladeshi made Nokia smartphones. If everything goes according to our plan, Bangladeshi customers will soon be able to grab locally made Nokia handsets.
But the Nokia country office in Bangladesh declined to comment on the matter.
Commenting on the issue, Posts and Telecommunication Minister Mustafa Jabbar said, "The BTRC has granted a provisional license to the Vibrant Software (BD) Ltd for producing Nokia mobile phones in the country.
"Some other brands have also expressed their interest in setting up factories here. I am optimistic that Bangladesh will be able to meet the local market demand with domestically manufactured handsets if other brands open factories here along with Nokia by 2022."
Nokia has been a very popular mobile phone brand from the very beginning of the brand's journey in Bangladesh due to the quality and durability of its devices.
Industry insiders had expected that the once top brand would open its production unit in Bangladesh much earlier when many newer brands set up their factories here. The brand has been trying to get the BTRC's approval for a few years but could not secure it due to internal issues.
On 24 May 2017, Vibrant Software (BD) Ltd signed a land lease agreement with Summit Technopolis Ltd – a subsidiary of Summit Group – to set up a mobile phone assembling plant along with two other facilities.
But it took four years to get the license for setting up the factory.
The BTRC finally granted a provisional certificate for Mobile Phone Handset Manufacturer and Vendor Enlistment Certificate to Vibrant Software (BD) Ltd for three years on March 23.
Under the certification, the vendor will be allowed to import four types of parts, including Printed Circuit Board (PCB) and Printed Circuit Board Assembly (PCBA), Complete Knock Down (CKD) and Semi Knock Down (SKD) parts, radio equipment and other machineries related to mobile phone handset manufacturing.
Vibrant will also import equipment to set up a testing laboratory as part of their plant.
Conditions for full certification
Vibrant Software (BD) Ltd will have to follow 25 terms and conditions to get the full approval – Category-A certification – from the BTRC.
Some of these conditions are – the vendor must build its own testing lab, at least 3% of the locally assembled or manufactured mobile phone handsets must be sent to an internationally recognised testing lab to assess the quality, and the technical and quality assurance certificate must be submitted to the commission.
Apart from these, to ensure the after sales service, the enlisted manufacturer has to establish a minimum of four service centers in Dhaka, three in Chattogram, two each in all other divisional cities and one service center each in every district across the country.
The conditions also state that export and import of radio communication equipment related to mobile phone handset manufacturing and testing laboratory is strictly prohibited without prior permission from the BTRC.
The commission may appoint inspectors by order in writing to inspect the testing lab/factory/radio communication equipment store/office from time to time without prior notice.
The enlisted vendor also has to make necessary arrangements for e-waste management. All information of e-waste and recycling should be recorded in a register by the organisation and a bi-annual report must be submitted to the BTRC.
The commission also put a bar on importing old or used PCB or PCBA accessories.
Local manufacturing industry
The local mobile handset manufacturing industry began its journey back in 2017 when electronics brand Walton launched production in Bangladesh.
Since then, a total of ten brands – including global smartphone vendors Samsung, Symphony, Oppo, Realme – began production here. These brands produce 85% of the smartphones in the local market and meet 55% of local demand for both smartphones and feature phones.
According to the BTRC, the total number of handsets manufactured and imported in the country in the 2019-20 fiscal year was 29.48 million units. Of which, 16.21 million units were manufactured locally by 10 companies, whereas 13.27 million units were imported.
Locally manufactured handsets of international brands cost around 30% less than the imported ones, Bangladesh Mobile Phone Importers Association's (BMPIA) Joint Secretary Mohammad Mesbah Uddin pointed out.