Mobile phones and digital divide

As expected, mobile phone imports have continued to retain their growth spree. In the Jul-Feb period of this fiscal, data from Pakistan Bureau of Statistics (PBS) show that handset imports had grown by 52 percent year-on-year to $1.31 billion. Thus far this fiscal, about $450 million more in forex has been spent on these imports. In February alone, imports had increased by 68 percent year-on-year to $176 million.

The significantly higher forex burn on mobile imports is a cause of concern. But there is another side to the argument. A lot of these imports are said to be in the category of smartphones, from low-end to medium-end. Considering the 35 to 40 percent smartphone penetration in the country, there is a need to put more smartphones into people’s hands so that benefits of digital economy can be exploited.

While local mobile phone assembly has taken off in recent years, the fact that those facilities are churning out mostly 2G-enabled handsets underscores the necessity of importing smartphones. Even if 4G-enabled smartphones suddenly start coming out of those facilities, it wouldn’t necessarily bring down the import bill, due to the requirement for imported kits, parts and accessories, as well as potential demand.

Nevertheless, while feature phones are inferior in terms of advanced connectivity, the importance of smartphones alone in enabling digital economy shouldn’t be exaggerated. Productivity in digital space also requires access to computers, laptops, decent internet connection, along with knowledge of how to use such channels. The latest Pakistan Social & Living Standards Measurement (PSLM) Survey (2018-19) from PBS shows a dismal landscape on those counts.

For instance, the PSLM data show that only 14 percent of households in Pakistan had access to a computer or a laptop. Besides, only 34 percent of households had access to Internet (including DSL and 3G/4G). Mobile phone ownership among individuals 10 years and older was reported at 45 percent. Those numbers become even worse when one steps into the rural areas. Gender gap is also palpable.

If the pandemic hasn’t raised this issue already, one of the complex problems for the government and the private sector in the coming years will be how to resolve the digital divide, which is exacerbated by income inequalities and gender disparities. It is high time to think about how to make computing devices (be it computers or smartphones) and internet widely available as well as affordable for the masses.