2013 Bangladesh - Telecoms, Mobile, Broadband and Forecasts

As Bangladesh’s mobile growth slows, regulator issues series of new licences, including 3G

Note: This report had a revision and update of the statistical information in November 2013, bringing tables up to 2012 as a far as possible, and where information was available, up to June/September 2013. Some new information was also added to the report.

Bangladesh remains one of the poorest, most densely populated, least developed countries in the world; yet it has somehow managed to show considerable spirit in the development of its telecom sector. Bangladesh has discovered a way to grow the sector in spite of the odds. This nation of more than 150 million people, with its comparatively low GDP per capita, has been involved in the creation of a very competitive mobile telephone market. Most noticeable has been the willingness of Bangladesh to encourage foreign participation in these endeavours.

Following a number of boom years of expansion, the Bangladesh mobile market started showing signs of growth moderating in 2009. This easing has continued through 2012 and into 2013. There had been a truly stellar year in 2007 with the mobile subscriber base increasing by 70%. Growth eased to around 30% and eased further to less than 20% by 2012, with the country’s mobile subscriptions reaching almost 100 million by end-2012.

The strong growth in mobiles has been helped enormously 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. The success of the mobile market, however, has been achieved in a country that continues to struggle with its lowly economic status, its frequent natural disasters such cyclones and floods and the slow implementation of much-needed economic reforms.

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 late 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 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 their 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.

The internet usage has been growing quickly in Bangladesh, although obviously this was happening from a very low base. With an estimated internet user-base of close to 10 million (a 7% user penetration) coming into 2013, the number of people using the internet had more than doubled in just three years. The local internet industry was obviously preparing to move into the next stage of its development. The country must work hard, however, to overcome obstacles associated with the country’s lowly economic status and still developing ICT infrastructure. Broadband internet is in its infancy, but the country has started moving on a number of fronts into wireless based services and has embraced mobile internet in a big way. This is important because the range of technologies on offer help overcome some of the infrastructure limitations and left the nation into a broadband regime.

Key highlights

• Bangladesh’s mobile market passed 100 million subscribers in early 2013;
• The five-year period prior to this had seen mobile subscriber numbers grew almost 20 times;
• Of the mobile operators, GrameenPhone was far and away the leader, claiming 42% of the total mobile subscriber base by mid-2013, despite the best commercial efforts of its five competitors;
• Airtel Bangladesh and Robi Axiata had both seen rapid growth in their respective mobile subscriber bases during 2012;
• The first 3G licence was awarded to the state-owned operator, Teletalk, which launched a pilot 3G offering in late 2012;
• The 3G licensing for private operators was seriously delayed but finally took place in September 2013, with four operators winning licences;
• Coming into 2013, internet user penetration remained relatively low and internet subscription rates were even lower.
• Although the number of fixed broadband internet subscribers remained low in Bangladesh, the number of mobile internet services had grown rapidly to dominate the online market;
• Essentially narrowband offerings, these 2.5G-based services were very popular by 2013;
• The fixed-line market experienced a major setback in the first half of 2010 when the regulator shut down five operators in major move against illegal VoIP services;
• This market segment had effectively recovered from the setback by 2013 but it remained a depressed market with little growth.

Data in this report is the latest available at the time of preparation and may not be for the current year