The Knot in the Mobile Market

The increase in currency prices, the registration plan, and the problems faced by importers in clearing their goods, alongside the hoarding of their stock by others, have created a deadlock in the Iranian mobile market. This knot may be somewhat loosened by the clearance of some goods from customs and a decrease in currency prices. The Minister of Communications and Information Technology announced earlier in August that efforts were being made to release confiscated phones into the market. One of the significant reasons for the increase in mobile prices is the profiteering by some importing companies. ISNA reported that 'the rise in currency rates led to an increase in phone prices, while some importers, having imported phones with government-subsidized currency, sold those phones at free market rates.' Mohammad Javad Azari Jahromi [Minister of Communications and Information Technology] published a list of these importers, revealing part of the reason for the high prices of phones. According to this report, the publication of this list indicated that many companies that received 4200 Toman currency for imports not only did not spend all the allocated currency for imports but also raised prices under the pretext of currency fluctuations in the free market. News sources in Iran have reported that 100,000 phones are being hoarded and another 100,000 phones are stuck in customs. The registration plan is another factor that some consider to be a reason for the high phone prices. According to the announcement from the Regulatory Authority for Communications and Radio, Samsung phones, as the most consumed brand in the Iranian market, were the last brand to join this plan, and with their registration, all phones available in the market are subject to the registration plan. According to this list, by the end of June 2018, approximately 2,225,000 mobile phones had been registered, with the highest numbers belonging to Huawei, Nokia, Apple, and Samsung. However, it should be noted that with Samsung joining this plan from early April 2018 and 324,000 registrations over two months, one cannot expect this number to undergo fundamental changes over time. By June 2018, the highest number of smuggled phones or phones that had not been registered after the one-month deadline belonged to Apple, Nokia, and Huawei, respectively. The current conditions in the mobile market are also a result of sanctions. The absence of representation for some well-known mobile brands in Iran due to sanctions, along with rising currency rates, has exacerbated the turmoil in the mobile phone market. The lack of oversight from parent companies and purchasing from other countries has led to prices differing from global rates. All these factors have prompted Azari Jahromi to react once again to the high prices in the mobile market, stating on his Twitter page in response to a user: 'Unfortunately, neither the issue of phone imports has been resolved nor have the phones in customs been cleared. Despite the decrease in currency prices, phone prices have not adjusted accordingly.' He stated, 'The resolution of the problem is in the hands of agencies whose authority is not under the Ministry of Communications.' Additionally, the recent decrease in currency prices has led some who hoped to sell their imported phones at higher prices to hold back, and the lack of mobile phone supply in the market has resulted in prices not significantly dropping despite the decrease in currency prices. Meanwhile, if the hoarded phones in customs are released and market supply increases—provided that currency prices do not rise again—the prices of these products in the Iranian market will decrease.