Telecom Industry of Bangladesh Essay

The telecom industry of Bangladesh has entered a phase of growing competition. Even though Bangladesh is regarded as one of the poorest, and a heavily populated country, it has found a way to grow its telecommunications sector. A flourishing mobile telephony business has brought out many positive changes in the country’s socio-economy. Foreign operators have been admiring Bangladesh as a budding high-growth mobile market, and have been in discussions with Bangladesh’s regulator, the Bangladesh Telecom Regulatory Commission (BTRC), about investing in the country.

In the near future, Bangladesh will become a huge investment hub for foreign companies. Service providers are spreading their wings and are optimizing their strengths and strategies to grab and retain their shares and enhance their subscriber base more aggressively. In a nutshell, Bangladesh’s telecom sector has a huge growth potential and is not going to leave any stone unturned. This tremendous growth is due to falling call rates, cheaper handsets, and rising disposable income. Market Sketch

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Six mobile phone companies currently operate in Bangladesh: Aktel, Banglalink, Grameenphone, Citycell, and Warid Telecom (private sector operators); and Teletalk (public sector operator). The Bangladesh Telecommunications Regulatory Commission (BTRC) has stated that the total number of mobile phone subscribers in Bangladesh reached 488 lakh at the end of July 2008. Grameenphone had the largest number of subscribers with 208 lakh followed by BanglaLink with 99 lakh subscribers. TMIB (Aktel) registered a subscriber base of 80 lakh, whereas the subscriber base for Warid Telecom reached 35 lakh.

According to BTRC figures, total number of PSTN phone subscriber reached 38. 12 lakh at the end of June 2008. BTTB, Ranks Telecom, Telebarta, Jalalabad Telecom, Onetel Communication, Dhaka Telephone, and Sheba Phone are some major operators in the PSTN phone space. With mobile phones becoming cheaper and affordable in the country people are moving towards new technologies like Internet services on mobile phones, games, etc. Also, the decline in duties and connection fees during the last few years has enabled low income groups to meet the expense of mobile phones.

Delighted with fascinating growth, mobile companies are now adding new and innovative technologies in their services. They are focusing on enhancing their portfolio of value added services, triggering sales of mobile phones. Other important factors that are boosting the growth in Bangladesh’s telecom industry include economic growth and better productivity in the country. Presently, the total tele-density (fixed and mobile phone) in Bangladesh stands at 16%, which is still very low compared to the global average tele-density of 50%. Key Developments Telecom operators in Bangladesh are putting in their best efforts to win the competitive race.

They are completely ready with winning strategies and are gearing up to accelerate the current pace of the telecom boom. Grameenphone, pioneer in innovative products and services in Bangladesh, is planning its own IPO. The company’s board of directors have approved a proposal for floating an IPO of its shares. To retain its present customers, Grameenphone has also undertaken Bangladesh’s biggest customer care campaign. The purpose was to interact with customers, help them solve their queries, and demonstrate Grameenphone’s commitment as a customer-oriented company.

Grameenphone’s recent “Stay Close” brand campaign, coupled with good value proposition and expansion of sales and distribution footprint around the country, greatly contributed in attracting new customers. This year they also came up with a new handset campaign for new prepaid subscribers. Apart from these initiatives, bringing in the next level of global connectivity for business, Grameenphone also launched BlackBerry wireless solution in Bangladesh. The Black Berry solution will be provided through Grameenphone’s business solution, which is focused on meeting special business needs.

Grameenphone is the first operator to launch the BlackBerry wireless solution in the country. Ericsson has signed a major deal with GrameenPhone to build and integrate a complete IP mobile backbone network for the introduction of layered architecture across Bangladesh. This marks GrameenPhone’s first step toward an all-IP network. Another key player, Banglalink, is ready to offer a complete package of attractive and eye-catching value added services to lure prospective customers. It has started a new service called “Voice adda”, a 24-hr voice-based service, which allows its prepaid and postpaid customers to voice chat with friends.

The company also came up with a new voice portal 4848. This is an IVR service which provides Banglalink users easy access to a host of value added services through speech browsing. Further, Banglalink has signed a fiber optic backbone bandwidth leasing agreement with Link3 Technologies. Under the agreement, Link3 will lease Banglalink’s nationwide underground fiber optics connectivity in all major districts in Bangladesh. In a go-to-harvest more market share strategy to strengthen its position, PBTL (Citycell) has significantly expanded its customer care capabilities with the rollout of customer care points across Bangladesh.

The expansion will enable customers to have their service requirements satisfied at these stop service desks equipped with online connectivity. Citycell has also signed a ‘Telehealth service agreement’ with Japan Bangladesh Friendship Hospital, which will enable its customers to contact specialized doctors of Japan Bangladesh Friendship Hospital. It has also initiated mobile banking and auto bill payment facilities for its customers. Citycell customers will be able to pay their mobile phone bills through Dutch Bangla Bank branches, ATMs Internet banking, auto bill pay, etc.

In a process to expand its horizon, Citycell launched its service on trial basis in the Bandarban district of Chittagong. Its network in Khagrachari and Rangamati hill districts will also be available shortly. Broadband: Not at Par The broadband market has not been able to make a big presence in Bangladesh. Though, operators and ISPs are pushing all possible efforts to touch the standards, broadband in Bangladesh is still unable to bridge the digital divide. According to industry sources, only 10 lakh people in Bangladesh have Internet connections.

There are lots of constraints hindering the proper growth of broadband in the country. Underdeveloped IT industry, lack of efficient use of existing network, poor telecommunication infrastructure, low level of computer literacy, widespread poverty, and limited point-of-presence and ISPs are some major barrier. The Bangladesh Telecommunication Regulatory Commission (BTRC) has recently published its draft guidelines for issuing three nationwide broadband wireless access (BWA) licenses, of which two will be in the 2. 3 GHz band and one in the 2. 5 GHz band.

In a drastic move, the incumbent operators have been banned from bidding and the new bidders have been limited to have 60% foreign shareholding only. BTRC will award three WiMax licenses by October-end in a bid as a part of their initiative to revitalize the country’s broadband market. The licensees will be authorized to develop and operate a telecommunications network to provide nationwide BWA services based on WiMax standards. It is expected that Bangladesh will soon witness a WiMax boom. AcessTel, Aftab IT, Agni System, BanglaNet, and Bangladesh Online are the major Internet providers in Bangladesh.

Access Telecom, one of the top broadband service providers recently completed its network upgrade that triples its network capacity, and ensures seamless and complete coverage in Dhaka, Narayanganj, and Gazipur. AccessTEL is in the process to extend its WBA network to Comilla, Chittagong, Sylhet, Bogra, and Khulna, and expects to launch services in these cities soon. Upon completion of the WBA network expansion in these five cities, AccessTEL will extend its WBA network to various other cities throughout Bangladesh in several phases. Also, mobile operator Aktel recently launched EDGE Internet services in Bangladesh.

Earlier, the company was providing this service using GPRS technology, but considering that GPRS is slower and that customers were depending on mobile Internet services more and more, they initiated the EDGE Internet service. Apart from this, AlwaysOn Network Bangladesh, a joint venture between AlwaysOn Network and an organization of non-resident Bangladeshi technologists, recently launched a new wireless network that will deliver free Internet access to Bangladesh primary schools and colleges, as well as competitively priced broadband services to underserved rural and urban areas.

This new nationwide telecommunications infrastructure is part of an agreement between AlwaysOn Network Bangladesh and the Government of Bangladesh. Recently, Ericsson launched a pilot project in Bangladesh to demonstrate the procedure to improve productivity and quality of life in the country with the use of high-speed Internet services through 3G/HSPA technology. The pioneering project, called Alokito Bangladesh, will demonstrate high-speed Internet access and a range of advanced services including mobile health and mobile learning.

Ericsson is seeking to showcase how the technology can be a major catalyst for social and economic empowerment by bridging the digital divide in this emerging market. Ericsson is also conducting 3G trials by using the site and transmission networks of three telecom operators-Warid Telecom International Bangladesh, Grameenphone and Aktel. Roadblocks The telecommunications sector in Bangladesh is undergoing fast structural change and vivid economic growth. The country is in an uncomfortable stage of moving from a monopoly to a liberalized telecommunications environment.

In this transition, there are numerous obstacles, which are hampering the growth of the industry to a large extent. According to a report published by ADB (Asian Development Bank), Bangladesh is struggling with inadequate PSTN infrastructure with more than 95% homes lacking a fixed-line telephone. About 80% of the fixed lines are in the four main cities, while 80% of the population lives in some 86,000 rural villages. Until recently, fixed-line services were mostly provided by the state-owned BTTB, which required a long waiting time for new connections.

Besides, efficient spectrum allocation for growing number of operators is another critical challenge for regulators. Licensing regulations and other regulatory guidelines need to be modernized to endorse a friendly investment environment. This will also encourage foreign investment in the country. Instead of increasing subscriber base, operators should focus on measures to retain customer loyalty. For this they have to ensure smooth, error free, and fast services delivery.

The challenge for operators is to maintain feasible business models, given that ARPUs fall as they follow subscribers in the rural areas where more than 80% of the population lives. All these developments are expected to put Bangladesh’s telecom growth on the fast track. According to industry sources, total subscribers in Bangladesh will increase from the projected 47. 1 mn in 2008 to 58. 4 mn in 2010. We, therefore, forecast that the level of wireless penetration will increase gradually in the country. But the upsurge in subscriber base could result in poor quality of services.

Hence, operators will have to ensure proper network expansion to meet quality standards. The country is on the verge of another big leap with huge foreign investments by telecom giants. Even though Bangladesh is doing tremendously well in the telecom space, broadband, 3G, WiMax, and telecom infrastructure are some key areas yet to be explored. And given the potential, it is expected that in coming years Bangladesh is going to witness a huge telecom revolution and emerge as a strong telecom hub in Saarc region. Arpita Prem [email protected] co. in


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