Developing Telecoms | Bangladesh has room for growth – but investment is required

17 May 2012

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Bangladesh has room for growth – but investment is required

Friday, 26 August 2011 11:40 | James Barton

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With a large population and a low penetration rate, Bangladesh’s mobile market offers significant growth potential. According to BMI, estimates for the end of 2010 for the mobile sector indicate that the country had a total of 72.992 million subscribers, with a penetration rate of 44%.

With 75% of Bangladesh's population residing in rural areas and with more than 30% of the population young, there is substantial room for additional growth in the sector: at the end of 2011, penetration rates could reach 56% following further strong double digit growth before ending 2015 on almost 118%.

Meanwhile, there continue to be no signs of 3G development in the sector, although operators continue to invest in developing value-added services. The latest are mobile banking services provided by Banglalink and Citycell for up to nine banks in Bangladesh. Meanwhile, Grameenphone, launched its web browsing service Opera Mini in April 2011, offering mobile internet services.

Despite the apparent room for growth, competition among the industry's six operators remains tough. This has been clearly demonstrated by the upcoming renewal of licences expected this November 2011, and could lead to higher fees being paid. The result would see many operators increasing their price plans to end users which could place them at a disadvantage to operators such as Airtel, which does not have to renew its licence until 2020, and thereby continue to offer competitively priced tariffs.

Bangladesh requires greater investment in its telecoms industry to attract greater foreign direct investment. It continues to push for the digitalisation of its ICT services although this will be insufficient if prices do not also decrease at the same time.

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