Competition between Grameenphone and other mobile operators in Bangladesh

August 1st, 2011 Posted in Computer . GPRS/EDGE In Bangladesh . Internet Marketing . Mobile Computing ByAbdul Momin Write comment

Grameenphone in Bangladesh started providing mobile telephony services in 1997 and is partlyowned by Telenor. In addition to core voice services, Grameenphone offers a number of valueadded services on both a contract and prepaid basis. Grameenphone is the largest of in total six mobile operators in Bangladesh. In Bangladesh, Grameenphone is the leading provider of mobile telecommunication services. Having started its operations in 1997, Grameenphone now provides voice, data and other value added services on prepaid and contract bases. Grameenphone has been a pioneer in bringing innovative mobile-based solutions to Bangladesh. Notable among these is the Healthline, a 24 hour medical call centre manned by licensed physicians. Other innovations include Studyline, a call centre-based service providing education related information, Mobicash, for electronic purchase of train tickets, Billpay, for paying bills through mobile phones and over 500 community information centres across Bangladesh. These centres bring affordable Internet access and other information based services to people in rural areas. As at 31 March 2011, Grameenphone had 32.0 million subscriptions, while the mobile penetration and number of inhabitants in Bangladesh were 46% and 158 million, respectively. Grameenphone became stock listed in November 2009, with, as at the date of this Base Prospectus, the largest public offering in Bangladesh. It is listed on both the Dhaka and Chittagong Stock Exchanges. As of 31 March 2011, Telenor held 55.8% of the shares in Grameenphone, while Grameen Telecom, the other main shareholder, held 34.2%. The remaining 10% of the shares were held by general retail and institutional investors. Network and licences: Grameenphone holds a mobile cellular licence with both GSM 900 MHz and GSM 1800 MHz spectrum. The mobile cellular licence expires in 2011, and is subject to renewal under a new licensing framework, which is not yet concluded. The government has also communicated its intention to appoint consultants to work on the proposal for introducing 3G in Bangladesh. The present Grameenphone network is EDGE/GPRS enabled and covers over 99% of the population. Competition:

As at 31 March 2011, Grameenphone had a market share of 43.8%. In addition to Grameenphone, there are five other mobile operators in Bangladesh. These operators and their market shares as at 31 March 2011 are: Banglalink (27.6%), Robi (18.2%), Airtel Bangladesh, previously Warid (6.3%), Citycell (2.4%) and Teletalk (1.6%). Competition among operators is intense and tariff levels are among the lowest in the world. Regulatory matters: The Bangladesh Telecom Regulatory Commission (BTRC) was established under the Bangladesh Telecommunication Act 2001 as an independent regulator. However, as per amendments to the Telecommunication Act 2001 in 2010, certain powers to regulate the telecommunication sector have been transferred to the Ministry of Post and Telecommunications. Presently, all mobile operators pay an annual licence fee of BDT 50 million, quarterly spectrum charges and 5.5% of revenues. A SIM tax of BDT 800 has to be paid for the purchase of a SIM and handsets have 12% duty at the import stage. Corporate income tax is 45% for mobile service providers, which reduces to 35% for a 10% listing on the countrys exchanges. Domestic interconnection calls are operated through Interconnection Exchange Licensees (ICX), while international interconnection calls are operated through International Gateway Licensees. For each outgoing call, operators will have to pay BDT 0.22 per minute (of which BDT 0.18 is payable to other operators and BDT 0.04 to ICXs), and will receive BDT 0.18 per minute for each incoming call, irrespective of peak and off-peak hours. Voice tariff levels are defined by a tariff circuit set by BTRC along with specific directives on promotions. Passive network infrastructure sharing is obligatory. As at 31 March 2011, Grameenphone has signed infrastructure sharing agreements with Banglalink, Robi, Airtel Bangladesh and Augere (a WIMAX operator) in line with the guidelines.