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Mobile phone operators in Bangladesh

Mahmud Hasan
CAN Bangladesh accommodate a few more mobile phone operators in the near future, when the country is expected to sustain 6% to 7% economic growth per year? Is the presence of six mobile phone operators in the country consistent with the growth of mobile phone penetration? This question comes up as the chief executive of one of the cell phone companies claims that the Bangladesh market is crowded with operators. However, the present six operators do not seem to be experiencing any difficulties doing business in Bangladesh.
Bangladesh, an impoverished country with 45% of its total population earning less than one dollar a day. has been experiencing impressive mobile phone growth in the past few years. Limited purchasing power, corruption, and inadequate telephone infrastructure have kept
the land phone market stagnant for many years. This created exceptional opportunities for the cell phone operators to capitalise on the situation.
The companies are investing a lot of money to build a network system covering the entire country’. The newcomer, WaridTelecom, has alone promised to spend one billion dollars in the coming years. The operators have discovered an excellent opportunity in Bangladesh to make profit quickly and easily in the shortest period of time.
Ten years old Grameen Phone, 60% owned by the Norwegian company Telenor, is estimated to be worth three billion dollars, while some analysts put the figure at four billion dollars. Last year. Grameen Phone achieved more than 50% growth in customer acquisition.
A country with a population of 150 million inhabitants, and continued economic growth, appears to be a highly lucrative market, both for the mobile phone opera-
tors and network system manufacturers. A recent market survey conducted by a Swedish research institute reveals Bangladesh to be the biggest potential telecom market in Asia after China and
Internationally reputed Ericsson, a Swedish ceil phone as well'as network system manufacturer, has opened a special cell at the head office in Stockholm just to concentrate on the Bangladesh market. Bangladesh is one of the fastest growing cell phone markets in the world. Major network companies are providing the operators in Bangladesh with low-cost offers, in an attempt to reach a new segment of the population that previously was unable to afford cell phones.
The operators are designing a cost effective network system to deliver services to grass-root level customers in rural Bangladesh, and focusing on extended services as well.
In Bangladesh, mobile phone
penetration has reached 20 percent from an insignificant number. At the end of2004, the total number of mobile phone users was around 4 million. At the end of 2007, this figure had jumped up to an incredible number -- 30 million subscribers! The number of mobile phone users is expected to exceed 60 million by 2012, bringing the penetration to 40%.
The well-known investment bank, Morgan Stanley, anticipates an expansion to 40 percent mobile phone penetration in the country within a few years. By 2015, Bangladesh will witness an even greater growth of penetration -- it is estimated to be around 50 mobile sets per 100 inhabitants. An increasing number of mobile phonb' opdrtTtors are showing eagerness to invest in the Bangladesh market, which demonstrates the country's huge potential in mobile phone growth for many years to come.
The operators in Bangladesh have become extremely aggressive in their quest to find more users by providing competitive prices, quality services, and good-looking phone sets. The operators are expecting to strengthen the present trend and retain their own market shares.
Since the operators are focusing on low-cost solutions, the network manufacturers are also committed to providing the operators with a system accessible for
everyone in Bangladesh. Bangladesh's booming mobile phone market has created more than a quarter million jobs, and has annually contributed a substantial amount of capital to its GDP growth. It has also created an opportunity for the young, qualified engineers and MBA graduates to get well-paid jobs in the urban areas.
The cell phone sector is a boon to industrial development in the country. Within 10 to 15 years it may contribute as much to the economy as the garment industry, and Bangladesh will most likely head towards being a middle level income country.
In view of the above, the government of Bangladesh should Consider 'awarding an additional two or three licences in the near future. In this connection, it is not inappropriate to look at Pakistan's cell phone market. Pakistan, with 160 million inhabitants, has almost similar socio-economical features to Bangladesh. Nine companies have been given licences to operate in the country. Currently, there are 71 million subscribers, with a mobile phone density of 44 phones per 100 inhabitants.
The extended mobile phone market in Bangladesh will bring more foreign investment to national development, increase employment, and play a key role in alleviating poverty. A robust and flourishing economy will support the government in accomplishing its national objectives. Eventually, it will boost economic growth and add to the GDP.
In the future, the mobile phone operators will have to equip themselves to encounter intense competition and offer more low-cost effective
solutions, improved customer services etc. In addition to the call services, the operators need to highlight intriguing products like internet and TVand satellite services.
The government should push the operators to list their companies in the stock market so that local investors, including financial
institutions and private persons, can be part of the ownership. Right now, only two of six operators are planning to register their companies in the Dhaka Stock Exchange. The country will be benefited from havin g more local investors.
Mahmud Hasan is an IT specialist and is currently working at a bank in Stockholm, Sweden.