1. ETE 521: Telecommunication
Business and Management
Module 05: Overview of
Bangladesh’s Mobile Telecom
Sector.

2. 2
Dynamics of Bangladesh’s
Telecom Sector
• The Telecommunication sector of Bangladesh has been
experiencing substantial transformation and growth over
last ten years. Once it used to be monopoly of state
owned entity, Bangladesh Telegraph and Telephone
Board (BTTB).
• The liberalization of the sector allowing the entry of
private operators started in late 80’s. During the first 10
years of the liberalization, the sector did not experience
substantial improvement in terms of teledensity,
subscriber’s base, price reduction, customer service, and
revenue.
• The entry of private mobile operators in late 90’s
started the scenario to change.

3. 3
Mobile Sector:
• Over the last ten years, there has been
phenomenal growth in the mobile sector pushing
teledensity from less than 1% before 2000 to
more than 20% in 2007.
• Mobile subscribers’ base stands at more than 30
millions by the middle of 2007 with revenue of
the mobile sector alone more than US$1 billion.
• More than 95% of Bangladesh’s geography,
excluding three hill districts, is now covered by
networks of multiple mobile operators.

4. 4
• The intense rivalry among mobile operators has been
causing reduction in tariff, promoting innovations in
services, and improving the quality of customer care.
• Mobile tariff has been reduced by more than 300% over
last five years.
• During the same period, customer and revenue have
grown by more than 1600% and 500% respectively.
• Competition, technological innovations, and BTTB’s
persistent failure of providing fixed phone connections
are major factors of the remarkable growth of the mobile
sector in Bangladesh.

5. 5
Cellular Mobile Service License:
• Total 6 operators:
• In 1989, agreement was made with one operator
Bangladesh Telecom Ltd (BTL) for providing cellular
mobile service (along with other services) which was
ultimately taken over by Pacific Bangladesh Telecom Ltd
(PBTL, brand name CityCell).
• It started with Amps technology and from 1999 started
giving the service using CDMA system. Three Operators,
Grameen Phones (GP), TM International Bangladesh
(TMIB, brand name AKTEL) and Sheba (later, brand
name Banglalink) were given licenses in 1996, which
are giving services using GSM system.
• Later in 2004, the state owned company, Teletalk and in
2005 Warid Telecom were given licenses for providing
services using GSM system.

6. 6
Background Information of
Mobile Operators
• Pacific Bangladesh Telecom Ltd (PBTL)
– It started to give service through Amps system; CDMA System was
introduced in 1999. Licensed to give service in whole of Bangladesh;
Present coverage is about 85%. Brand name is Citycell.
– Originally BTL had the license for multiple services. From this the
Cellular mobile portion of the license later transferred to a company
HBTL (Hutchison Bangladesh Telecom Ltd.)
– Entire share (100%) of mobile phone service purchased by PBTL in
1994.
– 45% of this share purchased by ‘Singtel’ of Singapore in 2005 and 15%
more to be transferred subsequently.
– Type of Service: CDMA – Voice, Data & International Roaming from
2005
– Access Frequency: 825-835 MHz and 870-880 MHz for Dhaka & 825-
832.2 MHz and 870-877.2 MHz for Outside Dhaka
– Brand Name: CityCell
– Number of Subscriber 1.31 million (July’07)

7. 7
• Sheba Telecom (Orascom Telecom, Egypt)
– Has been giving service through GSM system. Licensed to give service
throughout Bangladesh; Present coverage is about 80%.
– Cellular mobile license received on 11 November 1996 with 49% share
by a local Co. ISL (Integrated Services Ltd), 51% share by a Malaysian
Co. TRI (Technology Resources Industries).
– Entire shares (100%) purchased by ‘Orascom Telecom’ of Egypt in
September 2004.
– Type of Service: GSM – Voice, international roaming from 2005
– Access Frequency: 895-900.2 MHz and 940-945.2 MHz & 1757.5-1765
MHz and 1852.5-1860 MHz
– Brand Name: BanglaLink
– Number of Subscirber 6.61 million (July’07)

8. 8
• Grameen Phone Ltd
– Licensed to give service throughout Bangladesh
– Biggest company with subscriber base of about 50% of the mobile
sector
– Cellular mobile license received on 11 November 1996 with 49% share
by TeleNor of Norway, 41% share by Grameen Telecom, 5% share by
Gonophone of USA, 5% share by Marubeni of Japan.
– After about 6 years, share of TeleNor rose to 62% & the rest 38%
remained with Grameen Telecom.
– Type of Service: GSM – Voice, Data & International Roaming from 2001
– Access Frequency: 907.6-915 MHz and 952.6-960 MHz & 1720-1727.2
MHz and 1815-1822.2 MHz
– Brand Name: GrameenPhone
– Number of Subscriber: 15.73 million (July’07)
– Area Coverage: 85% wihtin Bangladesh

9. 9
• Telecom Malaysia (Bangladesh) Ltd
– Licensed to give service throughout Bangladesh
– Cellular mobile license received on 11 November 96 with 60% share by
TMI (Telecom Malaysia International), 40% share by A.K.Khan & Co. of
Bangldesh
– After about 3 years, share of TMI rose to 70% and A.K.Khan & Co.
share reduced to 30%.
– Type of Service: GSM – Voice, Data & International Roaming from 2004
– Access Frequency: 900.2-907.6 MHz and 945.2-952.6 MHz & 1727.2-
1732.6 MHz and 1822.2-1827.6 MHz
– Brand Name: AKTEL
– Number of Subscriber: 6.67 million (July’07)
– Area Coverage: 85% wihtin Bangladesh

10. 10
• Teletalk Bangladesh Ltd
– Started as a project of BTTB and got the cellular
Mobile license for the company on September 2004
with 100% share owned by the Govt
– Licensed to give service throughout Bangladesh
– Type of Service: GSM – Voice, Data & International
Roaming from 2007
– Access Frequency: 890-895.2 MHz and 935-940.2
MHz & 1710-1720 MHz and 1805-1851 MHz
– Brand Name: TeleTalk
– Number of Subscriber: 0.91 million (July’07)
– Area Coverage: 80% within Bangladesh

11. 11
• Warid Telecom International
– Cellular Mobile License received on 20 December
2005 with 100% share by this Company from Abu
Dhabi
– Licensed to give service throughout Bangladesh
– Started to give connection from April 20, 2007
– Type of Service: GSM – Voice & International
Roaming from April 2007
– Access Frequency - 1732.6-1747.6 MHz and 1827.6-
1842.6 MHz
– Brand Name: Warid
– Number of Subscriber: 1.41 million (July’07)
– Area Coverage: Data not available

12. 12
Value Chain Elements of the
Mobile Sector :
•
Ringtone
Provider
Mobile Operator
Value Added
Service Provider
Distributor
Platform
Provider
Platform
Distributor
Erricson
Motorola
Siemens
Nortel
Huawei
Platform
providers
have their
own local
distributors
Value Chain Elements of the Mobile Sector

13. 13
• Mobile operators have been developing their networks by deploying
platforms distributed by major telecom equipment makers such as
Ericson, Motorola, Siemens, Nortel and Huawei.
• These equipments makers have their own offices in Dhaka to
distribute their platforms and provide services as shown in the
adjacent figure.
• Some value added service providers have just started to emerge to
offer mobile shopping services such as Cell Bazer and telemedicine
services.
• Some ringtone service providers have started to emerge as part of
the value chain.
• Ringtone providers business volume is negligible. Platform providers’
combined revenue is about US$400 millions/year.
• NOKIA, Sony-Erricson, Motora, Samsung, LG, and Huawei are major
mobile handset providers.

14. 14
Mobile Service Market
Environment Analysis:
• High growths in both subscribers and revenue
are major attributes of Bangladesh’s mobile
sector, despite the fact that intense rivalry
among operators is causing continuous
reduction in the tariff.
• There has been high growth in the sector over
last three years.
• Total number of mobile subscribers has
crossed 30 million marks by the middle of 2007
which is more than double the number as was
the general forecast in 2005.

15. 15
Subscriber, Revenue &
Penetration:
• Mobile telecom service has experienced dynamic growth
during last five years in every aspect.
• Subscribers base has been shoot upto 32.37 million in
2007 (upto July) form 1.91 million in 2003.
• As a result, mobile phone teledensity, has increased to
23.23%.
• The overall growth of the sector in terms of subscribers,
revenue, and mobile penetration per 100 people over the
period of 2003-2006.

16. 16
Figure 4.1: Total Subscribers, Revenue and Penetration of the Mobile Sector
1.909
4.15
9.26
21.77
1.39
3
6.6
15.6
19.405
31.22
47.54
73.14
2003 2004 2005 2006
Subscribers,ReevenueandPenetration
Subscribers in Millions
Mobile Penetration per 100
People
Revenue in Billion Taka

17. 17
Growth Rate:
• Rate of growth of
subscribers,
revenue, and
penetration over
the same period
is shown.
• The revenue
growth could not
keep the pace
with the growth of
subscribers’
growth due to the
fact that intense
price competition
has been
reducing the tariff.
Figure 4.2: Annual Growth Rate of Subscribers, Revenue and
Penetration of the Mobile Industry
115 120
136
117
123
135
60.88
52.27
53.84
2004 2005 2006
GrowthRatein%
Mobile
Penetration
Subscribers
Revenue

18. 18
ARPU:
• The continued price competition has been
reducing average revenue per user
(ARPU) of the industry as shown in
Figure.
• The overall ARPU of the industry has
fallen by almost 300% during last four
years.
• ARPU from mobile telecom service was
Tk 847 in 2003 and it reduced to Tk 280 in
2006. It has gone further down in 2007.

19. 19
Figure 4.3: Average Revenue Per User (ARPU) Per Month
847
626
427
280
2003 2004 2005 2006
ARPUinTaka

20. 20
Mobile Phone Service Users:
• Mobile service users have grown from 1.909
million in 2003 to 32.37 millions by July 2007.
• Growth of mobile service users over 2003-2007
period is shown in following Figure.
• It appears that the market is moving from mass
adoption to late adoption.
• At this stage of growth, incremental revenue
from each new user is usually lower than those
of early and mass adoption stages.

21. 21
Figure 4.4: Mobile Service Users' Growth
1.909
4.152
9.268
32.37
21.772
29.427
2003
2004
2005
2006
June.07
Jul-07
MobileSubscribersinMillions

22. 22
Interconnection Issues :
• As per Interconnection Regulation 2004, anyone
providing the Telecom service, is to arrange for ’any to
any Interconnection’ and while starting the service, it is
to make Interconnection agreement with other operators
within 3 months.
• Earlier the mobile operators made interconnection
arrangement within them without much difficulty but
faced tremendous problem with BTTB, as it could not
provide sufficient Interconnection ports to cater for the
inter-operator traffic with the mobiles.
• To deal with this constraint, GP introduced mobile to
mobile service with special tariff. This resulted in a high
percentage of mobile subscribers (as high as 80% with
GP) without having access to BTTB.

23. 23
• In such a situation, the 4 mobile operators (at that time)
jointly made investment to upgrade the BTTB installation
to increase the Interconnection facility. BTTB itself also
took some action.
• This has resulted in some improvement in the
Interconnection scenario with BTTB. At present all 6
mobile operators (including the new operators) except
GP, have all their connections with BTTB access.
• About 40% of GP subscribers still do not have BTTB
access, which GP claims that they are not giving it to
retain the quality of service by avoiding the congestion.
• It is expected that the situation will improve further after
completion of some up gradation work, going on now in
BTTB exchanges.

24. 24
• Provision of Interconnection is generally a bilateral issue
between two parties, which are effected after an
agreement between them on facilities, quality of service,
charging, etc.
• However, the access between various operators can be
arranged at a common point, i.e. Point of Interconnection
(PoI).
• Such provision has been made at Chittagong by the 4
mobile operators & BTTB, with arrangement that other
operators could also join there to get the access service.

25. 25
• Fixation of charges to be paid by an operator entering
into the network of another operator is a major factor in
which negotiation on interconnection fails or lingers.
• In the Interconnection Regulation, this has been left to
the negotiating parties with provision of intervention by
the Commission, if required, although it advocates for
cost based charging in the long run.
• At the moment, interconnection charges within all mobile
operators, between mobile and PSTN operators as well
as within PSTN operators has been fixed at Tk 0.66 per
call per minute. This charge has been recently reduced
to Tk 0.40 per minute.

26. 26
Mobile Service Users’ Service
Consuming Behavior:
• Mobile users in Bangladesh primarily consume voice
services.
• As indicated in Figure 4.5, the market leader GP’s voice
call charges accounted for 86.73% of total revenue.
• Messaging, data, and International services accounted
for only 2.3%, 0.70%, and 0.67% only respectively.
• For a new entrant like Warid the service consuming
scenario appears to be similar.
• In July 2007, out of Taka 88 millions revenue, SMS and
data accounted for only Taka 2 millions, which appears
to be less than 2%.

27. 27
Voice Traffic Leads the
GP’s Service revenue
breakdown Revenue
GP’s Service Revenue Breakdown:
Jan-June 2007
Call Charges:
Line rentals :
SMS & MMS:
Inter. Roaming:
Internet
(EDGE & GPRS) :
Interconnection :
Others:
86.73%
0.76%
2.30%
0.67%
0.70%
8.40%
0.44%
Service Consumption Pattern of GP
Subscribers

28. 28
• Through KII and IDI, we came to know that a substantial portion of
mobile users are subscribers of more than one connection. They
switch operator by just simple changing the SIM to enjoy the
promotional offer of a certain operator.
• It has been gathered that some users change SIMs multiple times
even in a single day. This SIM switching behavior is more prevalent
in GSM subscribers than that in CDMA subscribers; since CityCell is
the lone CDMA operator.
• This freedom of operator switching by having multiple SIMs, which
are now a days distributed by operators at nominal cost, is also the
main reason of high response to certain promotional offers of GSM
operators.
• This consumer behavior also contributes to artificial growth in GSM
subscribers’ base.

29. 29
• Field Survey found that almost 74% of subscribers have
more than 1 SIM cards and almost 75% respondents
have used more than 1 SIM cards in recent month.
• It is interesting to note that although Banglalink and
Teletalk are known to be low cost service provider,
Grameen is still the most preferred operator among
multiple SIM holders.
• The field survey also indicates that more than 75%
respondents rated the price of a new set as an important
barrier for availing promotional offer of certain operators.
• The price of SIM card appears to be a less barrier. This
is one of the causes of slow growth of subscriber base of
CDMA operator.

30. 30
Competitive Analysis of the Mobile
Industry: Subscribers Growth
• GP is the market leader with 15.73 millions
subscribers as in July 2007;
• while Warid being the youngest member of
mobile operators has already bagged 1.14
millions subscribers just within 4 months of
operation during April-July’07.
• Subscribers’ status of all these six operators
over last 5 years is shown in Figure.

31. 31
0
2
4
6
8
10
12
14
16
SubscribersinMillions
2003 2004 2005 2006 July'07
Figure 4.6: Mobile Phone Subscribers by Operators
Teletalk BD
Grameen Phone
Aktel(TMIB)
CityCell(PBTL)
BanglaLink (Sheba)
Warid Telecom

32. 32
• Banglalink experienced very high growth rate in
subscriber base, which was above 250% in 2006.
CityCell’s growth rate jumped above 100% in 2006 from
its slow growth of less than 50% in 2005.
• Aktel’s year to year growth was also impressive in 2006
which recovered from its fall in 2005. GP’s growth
appears to be modest less than 100% due to the fact
that GP’s subscriber base by the end of 2005 was
already high, 5.54 millions.
• The growth rates of all these top five operators over last
3 years are shown in Figure.

33. 33
Figure 4.7: Subscriber Growth Rate of Top Five Mobile Operators
0
50
100
150
200
250
300
2004 2005 2006
GrowthRate
Teletalk BD Grameen Phone Aktel(TMIB)
CityCell(PBTL) BanglaLink (Sheba)

34. 34
Revenue Growth:
• GP’s revenue jumped by almost 50% from
Taka 29,628 millions in 2005 to Taka
45,460 millions in 2006.
• Remaining four major mobile operators
also experienced high revenue growth
during this period.
• Operator-wise revenues and their growths
during 2003-2006 are shown.

35. 35
RevenueinMillionsTaka
2003 2004 2005 2006
Figure 4.8: Revenue of top Five Mobile Operators
Teletalk BD
Grameen Phone
Aktel(TMIB)
CityCell(PBTL)
BanglaLink
(Sheba)

36. 36
• It is worth of mentioning that GP’s revenue
growth rate remained almost flat at 50% during
this period. Banglalink’s revenue growth fell from
above 225% in 2005 to just above 150% in
2006.
• Both Aktel’s and CityCell’s revenue growth rates
have been falling during last three years and
came down below 40%.
• TeleTalk being the youngest player among top 5
operators showed impressive revenue growth
rate of almost 150%.

37. 37
Figure 4.9: Revenue Growth Rate of Mobile Operators
-50
0
50
100
150
200
250
2004 2005 2006
RevenueGrowthRate
Teletalk BD
Grameen Phone
Aktel(TMIB)
CityCell(PBTL)
BanglaLink (Sheba)

38. 38
Average Revenue per User
(ARPU) per Month:
• The result of intense price competition among
the operators is reflected in the key performance
parameter: Average Revenue per User (ARPU).
• All top operators experienced fall in ARPU,
except TeleTalk. Less Interconnection charge
payment to other operators due to the increase
of its own subscriber base appears to be the
reason for TaleTalk’s increase of ARPU.
• In 2006, AkTel’s ARPU suffered most, followed
by CityCell. Actual ARPUs and their rate of
changes of top five mobile operators are shown.

39. 39
Figure 4.10: ARPU/Month of Top Five Mobile Operators
0
200
400
600
800
1000
1200
1400
2003 2004 2005 2006
ARPU/Month
Teletalk BD
Grameen Phone
Aktel(TMIB)
CityCell(PBTL)
BanglaLink (Sheba)

40. 40
• It is interesting to note that although ARPU of all major
operators were continuously falling, but smaller
operators such as TeleTalk and Banglalink experienced
growth in ARPU in 2005 as shown.
• The underlying cause appears to be lesser
interconnection charges paid by these two operators to
other operators with the growth of their subscriber base.
• It’s worth mentioning that smaller subscriber base
requires higher per subscriber payment of
interconnection charges to operators having larger
subscriber bases.

41. 41
0
-23.4
-23.78
-6.97
-57.89
0
-35.22
-19.71
-16.24
17.61
18.4
-19.77
-53.45
-42.71
-28.01
RateofchangeofARPU
2004 2005 2006
Figure 4.11: Rate of Changes of ARPU/Month of Mobile Operators
Teletalk
GrameenPhone
Aktel
CityCell
BanglaLink

42. 42
Market Shares of Five Operators:
• GP is the market leader both in subscribers’ base as well
as in revenue. In 2006, GP leads the Revenue with 63%
market share followed by Aktel with 18%.
• Due to lower ARPU, Banglalink’s Revenue share is just
8% with 21% subscribers’ base. GP’s Subscriber share
has fallen from 62% in 2005 to 49% in 2006.
• But, it’s Revenue share remains almost same due to
relatively strong performance in ARPU. Market shares of
top five operators based on Revenue as well as
Subscriber in 2006 are shown.

43. 43
Figure 4.12A: Market Shares of Mobile Operators
based on Revenue in 2006
Grameen
Phone
63%
Aktel
18%
TeleTalk
2%
CityCell
8%
BanglaLink
9%
Figure 4.12B: Market Shares of Mobile
Operators based on Subscribers in 2006
CityCell
4%
BanglaLink
21%
TeleTalk
3%
Grameen
Phone
49%
Aktel
23%

44. 44
• On the entry of new operator, Warid
Telecom, above picture has been
changed slightly in July 2007: GP and
CityCell almost retained their market
share based on subscriber number, but
AKTEL and BanglaLink market share
fallen slightly and it goes to Warid
Telecom pushing down TeleTalk in the 6th
position.

45. 45
TeleTalk
2.81%Warid
3.52%
CityCell
4.05%
BanglaLink
20.42%
Aktel
20.61%
GrameenPhone
48.59%

46. 46
• Service Offerings: Pricing, Value Added Service
• Different operators have been offering diverse call rates
to their different packages.
• Based on the analysis of these diverse call rates, it
appears that on an average call rate in Bangladesh is
around Taka 1.40/minute or US$ 0.02/minute.
• On an average, the tariff has fallen by almost 400% over
last four years. The price of peak hour mobile voice
service has fallen from Tk 7.0/minute in 2002 to Tk
2.0/minute in 2007.
• It has been gathered that Bangladesh’s mobile tariff is
highly competitive with that of India and Pakistan;

47. 47
Bangladesh India Pakistan
Lowest Highest Lowest Highest Lowest Highest
Tk 1.90/min Tk 2.50/min Tk 0.20 Tk 3.20 Tk 0.90 Tk 1.40

48. 48
Business Strategy of Mobile
Operators
• The primary business strategy is to
develop large scale network and huge
customer base for enjoying the benefits of
economies of scale.
• Such strategy also reduces the
interconnection charges to be paid out to
other operators.
• Companies are investing in network
expansion and marketing.

49. 49
• Price cut appears to be the primary strategy for retaining as well as
attracting new customers. As a result, mobile call rate has fallen by
78% from that in 2004. The lowest call rate has fallen below Tk 1.00
per minute.
• Different incentive packages such as bonus talk time are being
exercised to retain customer base. Offering of products targeting
certain user group appears to be prevalent in the industry. GP’s
djuice is a product targeting youngsters with the subscriber base of
more than 10 millions.
• Aktel’s Joy is another segment specific product targeting couples.
• Special rate commonly known as F&F (friend and family) for
selected numbers appears to be an attractive means as well.
Banglalink’s products for SMEs and business solutions from GP are
also examples of customer segment specific product strategies.

50. 50
• It has been observed that all these major
mobile operators have identified data
segment as emerging growth markets.
GSM operators have been offering
GPRS/EDGE base internet services.
• It has been learned that CityCell’s internet
service, Zoom, has received quite strong
market response.

51. 51
Network Infrastructure:
• Mobile operators for coverage of the distant
areas with co-located/adjacent cells require long
distance circuits.
• Out of four, 3 mobile operators (PBTL, TMIB,
Sheba), initially took lease of the long distance
circuits from BTTB.
• GP on the other hand got the railway optical
fiber on long term lease basis from the Railway
authority to meet their own long distance circuit
requirement.
• For initial period they also leased out some of
the circuits to other 3 mobile operators.

52. 52
• However, since the leasing charges of both
BTTB and GP were quite high, those 3 operators
went for building up their own long distance
network by Microwave Radio Link as well as
optical fiber line.
• Presently, these operators are more or less self
sufficient with their long distance network and
will also be in a position to lease out some of
their circuits to other operators, in addition to
meeting their own future demands considering
their expansion plan.

53. 53
• Remaining other 2 Mobile operators (Teletalk
and Warid) who came late in the market, do not
have their own long distance network.
• Teletalk is using the long distance network of
BTTB and Warid is functioning after taking the
long distance circuits on lease from the other
Mobile operators.
• Warid, however has got the plan to build up their
own long distance network.

54. 54
• The network infrastructure of BTTB and the 4 mobile
operators are provided either by Microwave or by optical
fiber cable.
• Originally the long distance networks were built by
Microwave but later with the increase in capacity.
• In BTTB and Aktel, there are still some Microwave links
functioning but with other 3 mobile operators.
• Besides optical fiber cable networks, upto STM 64 have
been built or under installation/proposed by BTTB as well
as the mobile operators.
• STM -1: 1890 Channels