Kenya's First Smartphone, Telcos To Set Up phone Factory ,To Retail From Ksh.11,500

Kenya’s First Smartphone, Telcos To Set Up phone Factory ,To Retail From Ksh.11,500

Post by : Hillary Musyoki

Kenya’s first smartphones, telecommunication companies based in Kenya are planning to begin manufacturing mobile phones locally, with an expected annual output of between 1.3to 1.8M devices.

Safaricom’s head, Karanja Gichiri, appeared before the parliamentary finance and planning committee on Tuesday, he said the cheapest device will retail at Ksh.11,500.

The phones price, however, is more than double what the President had promised last year when he said the government is working on a plan to have locally manufactured mobile phones retailing at below Ksh.5000.

“A 40% increase in cost will be driven by import duty and exercise duty. We anticipate incurring a cost of only about Ksh.300 which also includes the profit margin. the output VAT for that device is Ksh.1,500,”he told legislators.

“I have moved my components from around Ksh.4,500 to a final price of Ksh.11,000 and I, as the manufacturer I’m only taking home about Ksh.300.The role of taxation in lowering the component cost is critical to ensure we have affordable phones.”

November Speech

During his November speech, President Ruto stated that the move to manufacture locally would see Kenya boast of the cheapest smartphone in Africa.

“The real last mile in technology is the gadget and already we are working with Telcos so that we can have a smartphone that is going to be less than Ksh.5,00 and that can do everything you want,” President Ruto said on November 10.

“We want to see if we can get it to Ksh.3,654($30) or Ksh.4,872($40).I want to promise the country that in the next 8to12 months we will have the cheapest smartphone in Africa manufactured in Kenya,” he added in his speech.

However, according to Gichiri, it is impossible to achieve the target price because the proposed taxes will raise the cost of locally assembled smartphones by around Ksh.4000.

“If we were to work towards the vision of a 50-dollar phone, we would need to address import duty, excise duty and output VAT. The final cost of a phone would be between Ksh.6,500 to Ksh.7,000 at most,” he said.

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