Strong greenback leaves mobile handset prices constant
KATHMANDU, DEC 08 -
Prices of mobile handsets, which used to drop after the entry of fresh models, have remained constant in recent days.
According to traders, the strengthening of US dollar against Nepali rupee has prevented them from slashing the prices. This has also made new models expensive as domestic importers have to make payments in dollars.
We are not in a position to reduce the prices,” said Sanjay Golchha, managing director of Neoteric Nepal, which markets Nokia mobile phones. “The strengthening of dollar and stiff competition has forced us to maintain old prices.”
Due to Indian rupee’s depreciation against US dollar, Nepali currency, which is pegged with India’s, is getting weaker against the greenback. The exchange rate for the Nepali currency has increased to Rs 82 from Rs 72 in the last three months—an increment of around 15 percent.
According to Golchaa, even the prices of existing models may go up further. “The way the dollar is rising, importers should have already raised the prices,” Golchaa said. “However, the fierce competition in the market has discouraged them from doing so.”
Golchaa added that the company has slightly raised prices of a few models as it was not possible for them to sell at existing prices.
Dealers are also not being able to increase the prices as they are required to maintain the prices in accordance with the Indian market price, according to Golchha. “Increasing the prices above the Indian market price may lead to smuggling from India,” he said.
Dipak Malhotra, chairman of International Marketing Services (IMS), Samsung’s authorised dealer, said his company has slashed prices of a few handsets, but it is not possible now onwards.
Malhotra, however, admitted his company had to increase prices of five models fearing heavy looses. “Leaving a few handsets, we are selling other products at loss,” said Malhotra. The company has hiked the price of Samsung Galaxy S2 by Rs 1,000 to Rs 56,000.
According to Malhotra, prices of three-month-old handsets used to go down by 5 to 10 percent. “However, it is impossible for us to slash prices now,” Malhotra said, adding that the company has already incurred a loss of $150,000.
“We are not in a position to reduce the prices for at least next two months,” said Ramesh Shrestha, general manager of CG Electronics that deals with LG mobile handsets. “If the dollar’s value remains the same, it may force us to hike the prices.”
According to the Department of Customs, around 125,000 mobile handsets enter the Nepali market every month.
Source: Kantipur
