Iran Government Rolls Out Measures to Regulate Cellphone Market

EghtesadOnline: During the recent weeks, the prices of mobile phones have gone on a bullish run in Iran’s technology market. The exorbitantly high prices have enraged buyers and disrupted business. In order to bring the derailed market back on track, the ICT Ministry is rolling out measures to regulate the sector.

News ID: ۷۸۳۱۳۱

01 July 2018

Late on Sunday, mobile phone sellers shuttered their shops at Tehran’s major technology shopping centers Charsou and Aladdin, gathering in a protest calling on the government to step in.

ICT Minister Mohammad Javad Azari-Jahromi met with the protesters to address their concerns. He tried to reassure both the sellers and customers saying that soon a plan to regulate the market will be introduced.

Over the past weeks, with the Iranian rial falling sharply to unprecedented lows, the prices of electronics have skyrocketed in the country. Furthermore, visiting shops many customers face empty racks with sellers telling them that due to fluctuations in the foreign exchange market, importers have bottlenecked supply, according to Financial Tribune.

In talks with the shopkeepers, Azari-Jahromi tried to reassure the businesspeople saying that “I will do all that is in my power to provide importers with the required subsidized currency to bring electronics into Iran.”

He also noted that the market needs to be regulated and legal action will be taken against profiteering and avaricious individuals.

In a push to bring the unbalanced market back on the rails, Azari-Jahromi listed measures to restore calm to the market and buyers.

In order to boost market transparency, Azari-Jahromi said the ICT Ministry was to release the list of mobile phone importers which have received subsidized hard currencies to bring cellphones into Iran.

He added that a smart system has been launched through which customers can check whether a handset has been brought into Iran by one of the listed importers. In case a business overprices the cellphones, customers can register a complaint against the importer and seller with the “Tazirat” organization (a judiciary-affiliated ombudsman dealing with trading offenses).

As a third measure, authorities are conducting market investigations so as to detect any irregularity. Azari-Jahromi also promised that the legal action will be taken against profiteers.

Transparency Boost

In the face of intense criticism from the public over the soaring prices, the ICT minister told reporters on Sunday, “Making use of the subsidized currency provided by the state at the rate of 42,000 rials to the US dollar, some entities have brought handsets into Iran. However, in an underhand move, some of these firms are selling the mobile phones at exorbitant prices as if they have imported the goods using hard currencies purchased at higher rates.”

The greenback is changing hands in the open market at whopping rates of over and above 75,000 rials.

Making good on his promises, later on, Sunday, Azari-Jahromi released the list of importers who have already received the subsidized currency.

The list included names of 40 registered mobile importers stating that “since the beginning of the current fiscal [which started on March 21] until June 19, the listed firms have received subsidies foreign currencies.”

The statement further says, “Thirty firms out of the named companies have already brought mobile phones into Iran.”

The listed companies have been provided with €220,643,206 collectively to import handsets into Iran. Mobile phones with the total value of €75,283,860, which have been imported using the subsidized currency, have been cleared from customs.

Going Smart

The minister also praised the recently launched Mobile Phone Registry Scheme under which importers are required to upload detailed data of each handset they import on a database created by the government.

The scheme has been launched in a bid to curb smuggling of cell phones, by the ICT Ministry, Islamic Republic of Iran Customs Administration, the Communication Regulatory Authority and the Industries Ministry. As per the scheme, local operators are barred from offering services to unregistered phones.

Azari-Jahromi said through the system, officials have access to on-demand up-to-date information about the number and value of the mobile phones imported.

According to the minister, 54 firms initially requested import permits for bringing 7,229,646 handsets into Iran with the total value of €580,629,283.

After the requests were processed, 40 firms were provided with €220,643,206 at the subsidized rate of 42,000 rials.

He noted that between March 21 and June 19, a total of 140,399 mobile phones worth €75,283,860 were imported into Iran. The handsets have already been cleared by the customs administration. The average price of the imported handsets is €536.

Market’s Demand

Head of Iran Mobile Phone Importers Association Mahmoud Saffar says, “The amount of subsidized currency provided by the government cannot meet the Iranian market’s demand.”

“There is a huge demand for mobile phones in Iran’s market, with the total value of the goods that need to be imported annually standing above $2 billion, which means that during the past three months, importers should have been provided with $500 million of subsidized currency.”

The number deemed the bare minimum by Saffar is almost twice what the government has provided the importers with.

However, he notes that the current market upheaval is not due to the depreciation of the rial, but is the result of unscrupulous dealers’ activities.