Your Cart Is Empty!
With slowing mobile growth Bangladesh looks to 3G for action
Wednesday, September 7, 2016 7:22:46 AM America/New_York
Bangladesh is one of the poorest, most densely populated, least developed countries in the world. Apart from its lowly economic status, major impediments to growth have included frequent cyclones and floods and the slow implementation of much-needed economic reforms. The country also has a reputation for the inefficiency of its state-owned enterprises.
In this context the telecom sector certainly has its challenges. But progress is being achieved. After deregulation of the mobile market and the entry of two new operators (bringing the total number of mobile providers to five) in 2005, Bangladesh witnessed a boom period in mobile subscriber numbers. While overall growth has slowed somewhat over the last two or three years, the market continues to expand in a healthy fashion. The issuing of 3G licences by auction in 2013 and the subsequent launch of 3G networks has given a huge boost to the mobile/internet segment. Foreign investment interest has also continued to be high. Strong growth of the mobile internet customer base is expected to continue into 2016 and 2017. LTE services are expected to be launched by 2017. In September 2015 Axiata Group and Bharti Airtel commenced merger discussions for their Bangladesh operations. The potential merger would boost the combined cellco to take second market place from Banglalink.
The strong growth in mobiles has certainly been helped by the deregulation of the country’s telecom sector. The rapid uptake of mobile services was no doubt at the expense of the struggling fixed-line sector, with low levels of teledensity and general shortcomings in fixed network infrastructure. Despite a progressive regulatory regime, the country was slow to move forward with 3G mobile services. The first 3G licence in the country was awarded to Teletalk, the state-owned operator launching a pilot 3G offering in 2012. The 3G licensing process for private operators was meant to follow quickly but became bogged down. The planned auction was finally held in September 2013. Four operators - GrameenPhone Banglalink, Robi Axiata and Bharti Airtel - acquired 3G spectrum in the auction, setting the scene for further developments in the market place. The operators moved quickly to launch their respective offerings and by July 2014 there were around 5 million 3G subscribers in total.
The internet came late to Bangladesh with the country gaining connectivity in 1996. In the last few years it has grown considerably, although obviously from a very low base. With an estimated internet user-base of just over 15 million coming into 2015, representing just under 10% user penetration by population, the local internet industry has been preparing to move into the next stage of its development. However, the country must work hard to overcome obstacles associated with the country’s lowly economic status and still developing ICT infrastructure, not least of which being an overly bureaucratic government.
The fixed-line segment of the local telecom market has had a very difficult time of late. For years teledensity has remained essentially stagnant at less than 1%, by far the lowest in South Asia. The country had been struggling with its underdeveloped telecommunications infrastructure and heavy bias towards the four main cities. Then, as the country struggled to put an effective telephone network in place, the fixed market experienced a major setback in 2010. The regulator shut down five of the country’s fixed-line operators because of alleged illegal activities. As a consequence, within a two month period the number of fixed services in operation had fallen from 1.7 million to around one million. The market has since recovered to some extent but it was nevertheless a major setback for the telecom sector and there were ongoing repercussions.
One initiative to note, the government has launched what it calls the Digital Bangladesh (DB) strategy; this is aimed at creating a digitised government, ICT-enabled services, nationwide internet connectivity, a high-tech park for businesses and ICT-trained human resources by 2021.
For more information see - Bangladesh - Telecoms, Mobile and Broadband