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Bangladesh Telecommunications Report Q4 2010

Bangladesh Telecommunications Report Q4 2010

Management Report
Published: September 2010
Pages: For full details, please email keithw@cmsinfo.com
Research from: Business Monitor International
Sector: Networks & Infrastructure

From: GBP 331.25
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This quarter sees the provision of mobile subscriber figures for the period ended March 2010 and for fixed-line ended May 2010. For both mobile and fixed-line, the publication of new data has led to a revision in their respective forecasts, while internet and broadband forecasts remain unaltered. There were a total of 57.514mn mobile subscribers in the first quarter, following 2.497mn net additions, which was above that of Q109, in which there were 1.116mn net additions. Some of this robust growth may be attributed to continued price competition, but also to improved network coverage, through either operators' individual network roll-outs or network sharing agreements, which have become increasingly commonplace in the industry. However, for the quarter ended June 2010, reliance on data published by the Bangladesh Telecommunications Regulatory Commission (BTRC) remains untrustworthy as it has, in the past, significantly underestimated the numbers of subscribers using Robi (owned by Axiata) services. For this reason, we have based our current forecasts on Q110 data. This quarter sees the provision of mobile subscriber figures for the period ended March 2010 and for fixed-line ended May 2010. For both mobile and fixed-line, the publication of new data has led to a revision in their respective forecasts, while internet and broadband forecasts remain unaltered. There were a total of 57.514mn mobile subscribers in the first quarter, following 2.497mn net additions, which was above that of Q109, in which there were 1.116mn net additions. Some of this robust growth may be attributed to continued price competition, but also to improved network coverage, through either operators' individual network roll-outs or network sharing agreements, which have become increasingly commonplace in the industry. However, for the quarter ended June 2010, reliance on data published by the Bangladesh Telecommunications Regulatory Commission (BTRC) remains untrustworthy as it has, in the past, significantly underestimated the numbers of subscribers using Robi (owned by Axiata) services. For this reason, we have based our current forecasts on Q110 data.

During 2010, BMI estimates that the number of subscribers will reach 67.136mn, following year-on-year (y-o-y) growth of 22.03%. This is not all that dissimilar to growth experienced in both 2009 and 2008, at 21.8% and 28.49%, respectively. However, it does mark a significant decline from the 61.86% y-o-y increase experienced during 2007. The slowing rate of growth relates to a maturing market with penetration rates set to reach 46% by the end of 2010. We do believe that future growth will remain more or less steady, so that by the end of our forecast period in 2014, penetration rates will have reached 102.6%.

As for the fixed-line market, statistics published by the BTRC reveal that the number of fixed-line subscribers declined by over 700,000, from 1.75mn in March 2010 to 1.03mn at the end of May. The reduction has been attributed to the Bangladeshi government's efforts to shut down unlicensed activities at five fixed-line operators in the country. The government had alleged that RanksTel, Dhaka Phone, People's Tel, WorldTel and National Telecom were illegally terminating calls through VoIP.

Such a dent has meant that there now just eight operators in the fixed-line market. Of these, most have not seen changes to their fixed-line subscriber bases for some time; a prime example being incumbent operator BTCL, which has retained the same number of fixed-lines for a number of years. This has led BMI to significantly revise downwards its fixed-line subscriber forecast, which we believe will reach 1.013mn fixed-lines in 2010, representing a penetration rate of 0.69% We expect this rate to remain flat over the remainder of our forecast at 0.77%.

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