Thursday, February 23, 2006

Bangladesh: The next big mobile phone revolution

Bangladesh is very famous to the outside world for its natural calamities and there are plenty to feel the international media. However, Bangladesh now deserves to catch the attention of world media for a different news- growth in the market of cellular phone. In the last 3-4 years an explosive growth has taken place in this sector in Bangladesh, one of the poorest countries in the world and there is still room for more growth in the coming years too as not even 10% of the population are to own have a mobile phone.

The history of mobile phone is not very new in this poor country. In the early part of 1990s mobile phone came to Bangladesh. However, that time, license was given to just one company and naturally, the rate of owning a phone was too high and very few people owned a phone until 1996. From 1997 this sector was opened to some other companies and competition started. However, it was from 2000 that the number of mobile phones saw an upsurge. At first the mobile phone companies focused on high price both for connection and per minute call charge. Thus the increase in number of connections was not very high until 2003. But 2004 saw tough competitions among the operators after Orascom Telecom (OTH) purchased 100% of the shares of Sheba Telecom in Bangladesh. The name of the company was changed to Banglalink from Sheba and in order to get new users Banglalink gave one after another offers in the whole of 2005. For example, in one offer it gave 6 prepaid cards with its every connection. The other companies were forced to react and intense competition took place in whole of 2005. AKTEL, another mobile phone operator, gave 2 sim cards free with the purchase of a prepaid phone card in Internet Fair 2005. This special offer instantly became super hit. Towards the end of 2005 Grameen Phone offered the new subscribers to talk at almost free of cost after midnight. Soon Aktel followed Grameen phone too in this matter. City Cell also came up with same kind of offer. Thus in 2005 the mobile phone market grew 137% in Bangladesh. In 2004 the growth was 100%.
UAE-based Warid Telecom is the latest company to enter in Bangladesh market and they have already declared their intention to pursue a very aggressive strategy to capture a decent market share within in the next 3 years.

BIS Shrapnel, a world famous research organization has predicted that by 2007 the number of mobile phone users can grow to 18 million from the current figure of 7-8 million. It is expected that more foreign investment will come in this sector. Telenor, Telekom Malaysia (TM), Orascom, SingTel, and UAE-based Warid Telecom are the foreign telecom companies who are in the Bangladeshi mobile phone market now.
With a population of 140 million, there is still room for growth in the mobile phone sector in Bangladesh. The mobile handset producers should seriously consider setting up a factory in Bangladesh since the country is strategically located in the gateway between ASEAN and SAARC.