3.

Industry Analysis: Overview of Other Mobile Phone

Operators in Bangladesh:
3.1 Grameen Phone

Grameen Phone launched its service on the independence day of Bangladesh on

26th March 1997.

Table 1: GrameenPhone At a Glance

Events Particulars

1 Obtaining License November 28,1996

2 Commercial Launching March 26,1997

Products Post-Paid and Pre-Paid

GP Regular: Both way BTTB Connectivity + ISD
connection

GP National: With BTTB Incoming Connectivity

Post-Paid
GP- anytime 300
3
GP- anytime 450
Easy Pre-Paid

Easy Gold
Pre-Paid
DJuice

Sales & Information GP has sales and information centers in 6

4
centers districts.

So far, GrameenPhone has covered 61 districts

5 Network Coverage
along with all divisional H/Qs.
6
GP uses GSM (Global System for Mobile)
Technology
technology

Potential of SME market for the mobile operators in Bangladesh 26

Source: Newspaper Clippings and Website

Table 2: Customer Growth of GrameenPhone

Year Customer Base Growth Rate Remarks

1997 18,000 100%

1998 30,000 67%

1999 60,000 100%

2000 193,000 222%

Average Growth Rate:
2001 470,000 144% 123 %

2002 750,000 60%

2003 1,050,000 40 %

2005 3,699,000 252%

Source: Newspaper Clippings

International Roaming
GrameenPhone became the first mobile phone operator in Bangladesh to offer its
subscribers International Roaming facilities in March 1999.

GP subscribers who have the International Roaming facility can use their mobile
phones in foreign countries where GrameenPhone has partner networks.
Subscribers of partner networks will also be able to use their mobile phones while
visiting Bangladesh.

Advertisement & Promotion

GP has managed to develop and design the A&P materials from in-house since GP
has its own DTP (Desktop Publishing) unit. However, at the early stage of service,
GP appointed Roop Adverting Agency as GPs adverting agency.

Branding

Potential of SME market for the mobile operators in Bangladesh 27

GP has a very affluent Branding team and already established an accountable
image in Bangladesh market as GrameenPhone in the hands of the people

3.2 Citycell:

CityCell was offered a cellular license in Bangladesh by the Ministry of Post and
Telecommunication on March 1990. In June 2005 45% share of City Cell has been
acquired by SingTel (Singapore Telecommunications Limited).

Table 3: CityCell At a Glance

Events Particulars

1 Obtaining License March 1990.

2 Commercial August 1993.

Launching

3 Products Post-Paid and Pre-Paid

Potential of SME market for the mobile operators in Bangladesh 28

 Shabar Phone (Mobile 250)
Post-Paid
CityCell500

Amar Phone

CityCell Premium

Pre-Paid Aalap 24, Aalap B, Aalap Call me

4 Sales and information 2 in Dhaka, 1 in Chittagong and 1 in Syhlet.

centers

5 Network Coverage Citycell has covered 47 districts along with all

divisional H/Qs

6 Technology CDMA

Source: Newspaper Clippings and Website

Table 4: Customer Growth of CityCell

Year Customer Base Growth Rate

1997 11,000 100%

1998 19,000 73%

1999 25,649 35%

2000 32,000 25%

2001 49,500 55%

2002 102,000 106%

2003 235,000 130%

2005 325,000 38%

May, 06 750,000 107%

Potential of SME market for the mobile operators in Bangladesh 29

Source: Newspaper Clippings

Benefits of CDMA
Superior voice quality and clarity by eliminating background noise.
Low power consumption; hence higher talk time, enhanced battery life.
Minimum health risks compared to other wireless technologies.
Increased security and privacy as none other then the called person can listen to your
conversation.
Higher data transfer rates.
Reduced interference on other electronic devices.

3.3 Bangla Link

Sheba was offered a cellular license in Bangladesh by the Ministry of Post and
Telecommunication on November 11,1996. Sheba launched its service on August
31, 1998. Later on Orascom took over the company, now it is called Banglalink.

Vision of Banglalink :

"Banglalink understands people's needs best and will create and deliver
appropriate communication services to improve people's life and make it easier"

Table 5: Banglalink At a Glance

Potential of SME market for the mobile operators in Bangladesh 30

 Events Particulars

1 Products
Pre-Paid M2M
Pre-Paid
Pre-Paid M2M Plus

Pre-Paid Standard
Post-Paid Standard (350 Tk. Monthly line rent + ISD)
Post-Paid
Post-Paid (350 Tk. Monthly line rent + PSTN-Incoming
+ outgoing)

Post-Paid Mobile to Mobile (150 Tk. Monthly line rent)

2 Sales and 2 in Dhaka, 1 in Chittagong and 1 in Sylhet

information centers

3 Network Coverage 40 districts along with all divisional H/Qs

4 Technology GSM

Source: Newspaper Clippings and Website

3.4 Tele Talk

State-owned TeleTalk Bangladesh Limited launched its commercial operation on

31st March 2005 as the countrys fifth cellular operator and first ever in public
sector. The company managed by fixed phone operator Bangladesh Telegraph and
Telephone Board (BTTB) would spend about USD333 for its 250,000 GSM mobile
phones.

Potential of SME market for the mobile operators in Bangladesh 31

 Table 6: Customer Base of TeleTalk

Year Customer Base

March, 06 100,000

Source: Newspaper Clippings and Website

3.5 Market Share of Mobile Phone Companies in Bangladesh:

Presently, AKTEL has a total market share of 25% with GrameenPhone having
62%, CityCell 7%, and Banglalink 5%. The new public company, TeleTalk, has a
share of 1% within the span of 1 month since its inception.

Table 7: Market share of the mobile operators

Operators Market Share

GrameenPhone 62%

AKTEL 25%

CityCell 5%

Banglalink 7%

Potential of SME market for the mobile operators in Bangladesh 32

 TeleTalk 1%+
Source: Newspaper Clippings

Chart 3: Market Share of Mobile Companies in BD

1%
5% 62% Gram een Phone

7% AKT EL

Bangla Link

City Cell

T eleT alk
25%

Source: Newspaper Clippings

Table 8: Strategies and slogans of mobile operators

Mobile Operators Strategy Slogan
CityCell Proven dependability Because We Care
AKTEL Modernity Clearly Ahead
Banglalink Making mobile affordable You, First
GrameenPhone Communication for every body In the hands of people
TeleTalk

Source: Company Website

Potential of SME market for the mobile operators in Bangladesh 33

 Table 9: A Comparative Study of the Mobile Phone Companies

Date of Equipment Nos of

Operators Technology Ownership
launching Suppliers subscribers
70% Telekom Alcatel,
November97 Malaysia, 30% Ericsson, 3,500,000
AKTEL GSM
AK khan Huawei
61% Telenor,
Grameen April97 39% Grameen Ericsson 6,000,000
GSM
Phone Telecom
55% Pacific
August93 Group, 45% Motorola 750,000
CityCell CDMA
SingTel
100% Orascom Siemens, 1,000,000
September98
Banglalink GSM Telecom Limited Huawei
Alcatel,
GSM March 2005 100% BTTB 100,000
TeleTalk Siemens

Source: Company Website

3.6 Barriers to Entry:

Analysis on the overall telecommunication industry in Bangladesh shows a high barrier to

entry in the industry.
The barrier is high because-
The entry involves a substantial capital requirement/initial investment (such as setting
up network towers, tower maintenance cost, government tax, administrative cost, HR
cost, promotional cost etc.)
Because of the high fixed cost involved in the operation, it is hard to achieve the desired
level of Economies of Scale.
Switching cost in this industry is very high and involves a large capital loss.
Bangladesh is a too risky market to penetrate successfully (high political and economical
risks, uncertain weather conditions etc.).
The industry faces high government restrictions due to their complicated policies such as
the enforcement of recent VAT policy of TK.900 on each SIM card.

Potential of SME market for the mobile operators in Bangladesh 34

 The brand identity/image of five present operators (GP, AKTEL, CityCell, Banglalink,
TeleTalk) is highly strong in the market, which will make it difficult for the new entrants
to make an individual identity.
Due to the absence of proper patent rules on technology, the practice of imitation is high
and there is no protection on intelligence flow from companies to companies.
The only factor making it easy for the new entrants is the access to distribution channels
(dealers, distributors), which is high.

3.7 Rivalry among Existing Firms:

Analysis on the overall telecommunication industry in Bangladesh shows a high level of

rivalry among existing firms due to the following reasons:
Telecommunication industry is a fast growing industry in Bangladesh. Therefore, the
level of competition is high since the companies have to cope up with the fast changing
needs of customers by offering new services on a regular basis.
The practice of aggressive marketing, which has created a promotional battle among the
companies, has intensified the rivalry.
Telecommunication is an industry with high fixed costs. This has enhanced the
competition among the operators, as the firms are forced to cut price to enable them to
operate at capacity.
Differentiation, both real and perceived, among competing offerings is low, which
further has boosted the rivalry in the industry.
Difficulty of exit from the industry has increased the level of competition.
However, comparing to the market size of mobile phone users in Bangladesh (the
potential market size is 15 million; source: newspaper), the number of competitors in the
industry is low. There are only 4 private and 1 public companies operating in the
industry. Among these companies, only 4 offer GSM technology and 1 offers CDMA
technology. Low number of competitors has narrowed the competition to some extent.

Potential of SME market for the mobile operators in Bangladesh 35