Iran’s mobile phone market faces shutdown after five months of import uncertainty

Import approvals remain frozen

Iran’s mobile phone market is approaching a shutdown after five months without a government decision on handset imports or domestic production, according to Iranian technology publication Peivast. Mobile phone prices increased by between 30% and 80% in Iranian year 1405, while importers have been unable to register new orders.

Mehdi Asadi, a member of the Iran Chamber of Commerce’s board of representatives and import commission, said the price increases were not caused by stronger demand. He identified the suspension of order registration as the main factor, saying importers had not been allowed to bring phones into the country during 1405. The government has also given private companies no plan covering either imports or local manufacturing.

The limited volume of handsets still arriving in Iran relates to orders registered before 9 Esfand, Asadi said. Those shipments are nearing completion, leaving even large companies with little inventory. He described the market as already operating in a semi-closed state.

A smaller market faces higher costs

Iran’s handset market required $4 billion in foreign currency in 1400, but that amount had fallen to $1.8 billion by 1403. Asadi attributed the contraction to the country’s economic conditions and said consumers were no longer able to replace phones as frequently as before. Buyers who once changed their handset at least every other year are now postponing purchases.

Importers say they are not seeking access to subsidized foreign currency. Until approximately a year and a half ago, the sector received cheaper currency through Iran’s second exchange market. Companies subsequently asked the president to let them finance imports with proceeds from their own exports. That arrangement remained the source of currency for mobile imports through the end of 1404.

According to Asadi, some companies have already completed exports and purchased phones abroad but cannot bring the devices into Iran because new import orders cannot be registered. The policy delay has therefore blocked inventory that businesses say is already privately financed rather than dependent on cheap government currency.

Logistics and component prices add pressure

Costs have also risen outside the order-registration system. The head of the Iran Mobile Association said goods can no longer be shipped from the United Arab Emirates and must first move through other countries with which Iran has better relations. This alternative routing has increased logistics costs by 30%.

Global handset production costs are adding another layer of pressure. Higher chipset and memory prices have had a 20% impact on mobile phones, according to the industry representative. Combined with restricted supply and more expensive logistics, these increases are feeding into a market where household purchasing power is already weak.

Employment risks widen

Asadi warned that companies would begin reducing staff and closing if the uncertainty continued. He estimated that 20,000 direct jobs and 120,000 indirect jobs could be lost. The exposure extends beyond importers to distributors, retailers, logistics providers and other businesses connected to handset sales and servicing.

The immediate industry request is permission to register orders and use export-generated currency for imports. Without a decision, companies cannot plan purchases, replenish inventories or determine whether domestic production will form part of the government’s policy. Peivast reported that industry representatives increasingly regard closure, rather than reduced activity, as a realistic outcome for the sector.