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This report provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in Bangladesh. Subjects covered include:
Scenario forecasts (fixed, mobile, internet subscribers)
Market and industry overviews;
Major players (fixed and mobile);
Infrastructure development – national and international;
Mobile voice and data market;
Internet, including VoIP services;
Regulatory environment and developments.
With slowing mobile growth Bangladesh looks to 3G for action
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.
the number of fixed-line operators has greatly diminished, despite ‘revalidating’ of licences.
The fixed line subscriber based continued to decline in 2015, with this pattern likely to continue into 2016 and 2017.
e-services start to build as country pushes towards a ‘Digital Bangladesh’ by 2021.
The mobile subscribers grew strongly by 11% for the year to September 2015 reaching 131 million by that stage.
Over the same period Airtel Bangla was the fastest growing mobile operator, up by over 20%.
The mobile internet – broadband and narrowband - customer base continues to grow strongly, reaching 32% penetration by September 2015;
The number of fixed broadband internet subscribers remained low, however.
It was yet to be seen how much impact 3G services would have on the broadband market.
After banning the selling of pre-activated SIM cards without proper subscriber identification, the BTRC continued to follow up with a strong enforcement policy.
The BTRC plan to hold auctions in the 700MHz spectrum frequencies for mobile Long Term Evolution (LTE) services during 2016.
Companies mentioned in this report:
Bangladesh Telecommunications Company Limited (BTCL); Peoples Telecom (formerly Bangladesh Rural Telecom Authority (BRTA)); GrameenPhone; CityCell (PBTL); Orascom Telecom Bangladesh (formerly Sheba Telecom); Banglalink; Robi (formerly Aktel); Teletalk (Bangladesh Telegraph and Telephone Board); Airtel Bangla (formerly Warid Telecom); Bangladesh Railway (BR); Power Grid Company Bangladesh (PGCB); Fibre @ Home; Bangladesh Submarine Cable Company Limited (BSCCL); Summit Communications; Grameen Cybernet; Integrated Services Network (ISN); Teleglobe; InTech Online (IOL); AlwaysOn Network Bangladesh (AONB); Augere (Qubee); BanglaLion; Ollo; New Generation Graphics Limited (NGGL); Bangladesh Internet Exchange Limited (BIEL); Bangladesh Internet Exchange Trust; Novocom