|
A Sketch of the
Telecommunication Sector in Bangladesh,
Updated July 2006
Telecom
Sector Organizational set up: The telephone sector was
strictly under Bangladesh Telephone and Telegraph Board
(BTTB) mainly operating in the field of landline
connections.
Currently
there are six cell phone operators and 15 private land phone
operators.
The first
private operator licenses was issued in 1989 to a company
operating as a monopoly till 1997 when telecom market was
opened up to three 15 year GSM mobile license operators.
These are
namely Citycell, Aktel, and Grameen Phone. Later on joined
in Sheba telecom, which sold out to Orascom operating as
Banglalink.
WorldTel Ltd.
was the lone license holder to provide land phone in Dhaka
and were supposed to start operation in March 2006. However,
Bangladesh Telecom Regulatory Corporation (BTRC) cancelled
its exclusive right terming it anti-competitive and volatile
of the Bangladesh Telecommunication Act 2001. WorldTel went
to court. The Appellate Division of the Supreme Court on
August 23, 2005 dismissed WorldTel’s petition for retaining
its four-year co-exclusive right with BTTB to provide land
phone in Dhaka. This paved the way for private companies to
compete for land phone license. There are now fifteen
private companies which obtained license for land phone
operation.
Very recently
Teletalk is providing mobile phone service under BTTB. Warid
Telecom International of Dhabi Group is likely to start
operation this year, 2006.
Teledensity:
0.6% landline phone and 10% mobile phone connection with 12
million covered by cell phone.
Thus,
the country’s telecom sector constitutes of:
Landline:
BTTB:
State-run landline
15 Private
companies received license. These are:
Bangla
Phone, Bashundhara Communication & Networks, Dhaka
Telephone, Dominox Technologies, GEP Telecom, Jalalabad
Telecom (Bijoy phone), National Telecom, Nextel Telecom,
One Tel Communication, Peoples Telecommunication and
Information Service, Ranks Telecom, S. A. Telecom
System, Square Informatix, Tele Barta (Jubok phone),
Westec (Bay phone).
Cell
phone: 5 private companies and one state- run
company.
City cell,
Aktel, GrameenPhone, Banglalink, Teletalk (state), Warid
telecom.
Five of
them use GSM (globalized system for mobile
communication) service in the country while one uses
CDMA (code division multiple access) technology.
Chronology
of Events:
|
>1972 |
: |
since
independence: BTTB landline operation under GOB |
|
>1989 |
: |
mobile
phone license given to Pacific Telecom (City Cell) |
|
>1997 |
: |
market
opened up to three more GSM mobile license
operators:
Grameen Phone (GP), Telekom Malaysia (Aktel), Sheba
Telecom (now Banglalink) |
|
>2002 |
: |
BTRC,
a licensing and regulatory body set up under the
provision of Bangladesh
Telecom Act 2001 came into effective operation. |
|
>2005 |
: |
Fifteen private companies received license for land
phone operation |
|
>2006 |
: |
Teletalk – BTTB started mobile phone service
|
|
>2006 |
: |
Warid
telecom a venture by Dhabi group of UAE is to start
telecom services in 2006 |
|
>2006 |
: |
SEA-ME-WE-4 (South East Asia, Middle East, West
Europe 4) submarine cable connection inaugurated in
May 2006 |
|
>2006 |
: |
BTTB
launched prepaid cards for land phones. |
Services
Available:
-
Fixed Phone Service:
Fixed phone or PSTN is
provided by BTTB. There are four types of telephone
exchanges operating: digital, analogue, central battery
(CB), and magneto with the transformation of these to
digital in near future. BTTB operated through four
satellites in Betbunia, Mohakhali, Sylhet, and
Kaliapur-Gazipur. Currently there are 15 private
companies which received license for land phone
operation. List in Annex.
-
Cellular Mobile Telephone Service:
Three are currently four
private operators: PBTL, Grameen Phone (GP), Telekom
Malaysia (Aktel), and Sheba Telecom (Banglalink),
Teletalk, Warid telecom. PTBL initially used AMPS
and CDMA system to provide service while the other three
operators are using GSM system. Among these GP has the
most coverage. Details of cell phone companies are
provided separately.
-
Nation Wide Dialing (NWD):
BTTB provided this service
all over the country through different transmission
links and TAX (Transit Automatic Exchange) and Sub-tax
system. More modern and sophisticated systems with
extended capacity like SDH Optical Fiber, SDH Microwave
and PDH Microwave System have replaced older versions.
Currently there are 16 TAX and Sub-TAX and 3 TAX cum
Local Switch (TLS) are providing NWD service. Private
mobile operators are establishing their own transmission
network. GP has taken lease from Railway Optical Fiber
System to establish transmission network through- out
the country. It also leases out to other operators.
-
International Dialing Service (ISD):
BTTB is the only operator,
which provides this service through two international
trunk exchanges (ITX), by Intermediate Data Rate System.
BTTB will hold monopoly over ITX till 2010. Bangladesh
has been linked to global network through submarine
cable SEA ME WE–4. Even though international voice
service is provided by BTTB alone, since 1998 it has
been opened up to the private operators through data
service VSAT.
-
Telex Service:
The sole provider of this service is BTTB
and this is losing its market to fax and internet
service.
-
Paging Service:
In 1989 a private operator
has obtained a license to provide this service which has
almost been wiped out with the introduction of cellular
mobile service.
-
Radio Trunk Service:
BTL got the license to
provide this service in 1989. However, it is being
almost wiped out for inefficient technical quality and
service.
-
Data Service:
BTTB provides this service locally and internationally.
But some private operators are being given license for
point two data circuit for corporate users inside the
country.
-
Internet Service Provider (ISP):
168 companies have been
issues license in the private sector to provide internet
service through using BTTB telephone lines and
international connection through VSAT. BTTB started
internet service since 1999.
-
Pay-phone service:
It is in operation since
1994 though BTTB. There are 1550 card phone booths in
the country but the quality of the magnetic cards are
sometimes not up to the standard. BTTB launched
pre-paid land phone card in mid July 2006.
Bangladesh
Telecom Regulatory Commission: The BTRC, a licensing and
regulatory body set up under the provision of Bangladesh
Telecom Act 2001, came into effective operation in 2002.
From the start, BTRC had a job on its hand to impose its
authority on a sector long dominated by BTTB, both as
regulator and sole operator.
BTRC has made
regulatory interventions as and when appropriate. Mobile
phone users and operators were charged for calls made from a
mobile phone to a BTTB fixed line; but the BTTB subscriber
was not similarly charged for calls made from BTTB to
mobile. BTRC introduced new legislation enabling all
operators to deal with each other on terms of parity. The
private operators are currently renegotiating their original
inter connectivity agreements with BTTB. The issuance of
fixed-line licenses to new operators goes to BTRC’s credit.
Tele-density: Tele-density in Bangladesh is very low.
The country's telecommunications services are inadequate.
Bangladesh devotes a mere 0.7% of its GDP to the telecom
sector as compared to the regional average of about 2.0%.
The government-run telephone service has approximately 9
telephone lines for every 1,000 people, giving it one of the
lowest penetration rates in the world. However, this rate
is improving fast with the introduction of private sector
involvement. Approximately, a little over 900,000 telephone
landlines are located in Dhaka, a city of over 12 million
people. Bangladesh's call completion rate remains under 50%
and its landline network barely supports modern telecom
accessories such as call waiting, call forwarding, and voice
mail.
Tele-density
of cellular phones has been growing and with 12 million
mobile phone clients’ cellular tele-density is now 10% and
landline density is 0.6%. The demand for fixed phones in the
capital is estimated to be around 10 lakh while the
registered demand with the state-run BTTB is about two lacks
only. BTTB does not have the infrastructure to meet the
growing demand for land phones. Therefore, land phone
operation has been opened for private operators to provide
service through competitive bidding in the Central Zone –
Dhaka Multi Exchange Area – consisting of Dhaka city,
Zinzira, Savar, Narayanganj, Gazipur and Tongi. This area
comprises of 60% demand of the country’s fixed phones.
Comparative
status in South Asia:
India’s low
rates owe much to its strong growth of mobile phone
services. Mobile phone calls cost US$ 0.03-0.04 per minute
in India against US$ 0.084 per minute in Pakistan, US$ 0.11
per minute in Sri Lanka and over US$ 0.014 in Maldives. In
Nepal and Bangladesh mobile phone calls cost US$ 0.065 per
minute.
Mobile phone
tariff in India is one of the lowest in the world and around
50% cheaper than tariffs in neighboring countries such as
Sri Lanka, Pakistan and Bangladesh, according to Telecom
Regulatory Authority of India (Trai). The tax of handset is
$25 per set. Duty on imported handset is substantially
higher than neighboring countries except Myanmar.
Government of
Bangladesh (GOB) took some good initiatives in this budget
of FY2006/07. It reduced tax on SIM (Subscriber identity
module) card or cell phone connection from Tk 900 to Tk.
800. Customs duty on imported telephone sets, both mobile
and fixed phones, has been cut to Tk. 200 per set from Tk
300. This year’s budget allocation is Tk. 1574 for this
sector, which is 10% higher than last year’s.
Cell Phone
Service:
The cell phone
is working very well here. Bangladesh is an attractive
market for mobile phone services due to its large population
of around 140 million but still the mobile phone penetration
rate here is very low, 4%. The potential of adding new
subscribers in Bangladesh is enormous. It is estimated that
the number of mobile phone subscribers in Bangladesh will
reach around 15 million by the end of 2007 (10%). There will
be scope to tap the untapped market!
Present
Scenario of Mobile Phone Sector in Bangladesh
As of June
2006
|
Name of the Operator |
Type of service |
Period of Service Launch |
Network Coverage |
Number Of Subscribers |
|
City
Cell
Pacific Bangladesh Telecom(PBTL) |
CDMA &
AMPS |
1991 |
54
districts |
0.35
million |
|
GrameenPhone Ltd.
(GP)
Telenor |
GSM-900 & 1800 |
26,
March 1997 |
61
districts |
8.5
million
(30
June 2006) |
|
Aktel
TMIB
(Malaysia) |
GSM-900 & 1800 |
November 15, 1997 |
61districts |
4 million
|
|
Bangla
Link
Sheba
Telecom Orascom |
GSM-900 |
September 1999 |
61
districts |
1.18
million |
|
TeleTalk
BTTB
Mobile
_____________
Warid
Telecom
Dhabi
Group |
GSM
Planned |
28,
March 2005
Last
qtr of 2006
Planned |
30
districts headquarters
__________
planned |
1.5
thousand
____________
5 million planned by 2007 |
Private
Land phone operation
Jubok Phone/Tele Barta has
target to reach around three lakh land phone subscribers
in four zones of the country by the end of 2006. Among
others, Dhaka phone, Jalalabad telecom, National
telecom, One telecom, Peoples telecom, Ranks have
started operation.
PBTL:
Bangladesh Telecom Limited (BTL)
was awarded a license to operate cellular, paging and other
wireless communication networks. In April 1990, BTL and
Hutchison Telecommunication (Bangladesh) Limited created a
joint venture in the name of Hutchison Bangladesh Telecom
Limited (HBTL). It began operation in 1993 using AMPS
technology. Interestingly it was the first cellular
operation in South Asia. However, it charged a price of TK.1
lakh per package which was for purely profit motivated and
not within the reach of general mass. In December 1993,
Morshed Khan (foreign Minister) acquired 50% share of HBTL
and named it PBTL launching cellular products with the brand
name CityCell Digital. This is the only operator
using CDMA technology.
However, it
has lost its market to GP and then AKTel. It dropped its
package by 95% to be competitive. It adopted advanced
customer service and choice of budget friendly packages.
CityCell was the first to introduce IDD and NWD for prepaid
subscribers. It covers 54 districts. It is trying to compete
in the market and has been exploring possibility for
investment from Signtel.
Grameen Phone: The countries
leading mobile cellular operator started operation in 1997.
It was Iqbal Quadir, a Wharton MBA, who in 1994
conceptualized the mobile-phone company called GP with the
help of micro-credit pioneer Dr. Yunus of Grameen Bank.
Quadir convinced Norway’s state-backed telecom company,
Telenor, to take a 51% stake in GP. Later, with Japan’s
Marubeni Corporation on board and $65 million in loans from
aid agencies.
The
international shareholder, Telenor AS owns 62% of the shares
of GP, brings technological and business management
expertise. The local shareholder is Grameen Telecom, which
owns 38% of the shares of GrameenPhone, and is a
not-for-profit company which works in close collaboration
with Grameen Bank. It understands the economic needs of the
rural population, in particular the women from the poorest
households, and provides a presence throughout Bangladesh.
At present (As
of 30 June 2006) it has 8.5 million subscribers across the
country having 62.01% market share in the mobile sector and
91% population under its network by the end of this year.
It was the
first Mobile Operator offered International Roaming service
to its valued subscriber and also the pioneer of introducing
prepaid service in this arena.
GP reaches the
remote rural area by its internationally acclaimed
Village Phone Program. It is an initiative, which
provides telephone services in remote rural areas where no
such facilities existed before. Village payphone is one of
the important products through which GrameenPhone is
empowering the poor village women. There are now more than
206,000 village phones in 55,000 villages. Grameen Telecom
is a non-profit organization and a sister concern of Grameen
Bank. Grameen Telecom with the help of Grameen Bank
administers Village Phone services to the villagers, trains
the operators as well as handles all service-related issues.
As of February 2006, Grameen Bank covers 62,089 villages
through its 1,161 branches.
AKTel:
Telecom Malaysia International Bangladesh (TMIB), a joint
venture between Telekom Malaysia Berhad and A. K. Khan & Co.
Ltd, was established in 1996 launching its services in 1997
with the brand name Aktel. Since its commencement,
AKTel soon became the second biggest operator and claims to
have the widest International Roaming service in the market
connecting 170 countries. It was first mobile operator to
connect Tetulia to Teknaf the North and South Pole of
Bangladesh and to provide seamless coverage along the Dhaka
Chittagong highway. With a strong network, coupled with
first Intelligent Network (IN) Prepaid Platform, Aktel is
geared to provide a wide range of products and services.
With TMIB/Aktel of Malaysia’s investment of $200
million, Aktel has invested $ 308 million between 1997 to
2005 and paid Tk. 8.500 million (8.5 billion) to the
Government on different heads including fees, taxes and VAT.
The company has a plan of investing $237 million during 2006
for expanding its network. It has signed a $200 million
equipment deal with Huawei of China to upgrade its network
to the GPRS system, which will support much higher data
transfer rates other than voice, multi-media messaging (MMS)
and faster mobile internet service.
Banglalink: Egyptian Telecom
Orascom acquired 100% Sheba telecom, a joint venture of
Malaysia and Bangladesh, in October 2004. Sheba had launched
its operation in 1997 but had poor performance. Orascom paid
a price of $60 million including $ 10 million in settling
outstanding loans to SCB, Dhaka. It inherited 1% market.
However, it took an aggressive approach to invest $250
million towards accelerated network deployment and launched
new prepaid packages in nine cities. It plans to extend
network coverage from 9 to 61 districts by the end of 2005,
using up–to–date telecom communications soured from Siemens
and Huawei. Its target is to make a difference by providing
affordable and reliable connectivity solution. It has
steered extreme competition in the market by offering Tk.
3,800 mobile-to –mobile package. Its
mission is to reduce the total cost of buying and using
mobile phones. Banglalink
currently operates a GSM network and provides a range of
prepaid and postpaid voice, data, messaging and value-added
services. It spread its network in record speed and covered
all of the 61 districts, 425 thanas.
Teletalk: Government decided to
start up a state-owned mobile company to provide cheaper
affordable cell service to people and to check excess profit
by the private operators. However, the inception of this
company has undergone a much-debated political process on
the transparency issues of BTTB. However, it has started
operation with an investment of TK. 2500 crores. Teletalk
created huge buzz in the sector with its free incoming
facility from fixed-line phones of Bangladesh Telegraph and
Telephone Board (BTTB).
The Post and
Telecom Ministry discloses that the government plans to sell
a total of one million cell phone connection in the country
in phases. In the first phase, 250,000 connections will be
provided to the users, of which 50,000 are being distributed
initially. The minister confirmed that a policy decision has
been taken to open up Voice Internet Protocol (VOIP). The
decision will be implemented after studying the operational
processes followed in the neighboring countries of India
Pakistan and Sri Lanka.
Warid
Telecom International Ltd. Its
initial plan is to acquire over 14 million customers in four
phases by December 2007. First, it will launch services in
26 districts with an aim to net 2.8 million subscribers by
October 2006. In the second phase ending in January 2007 its
plan is to expand the service coverage to 22 more districts,
targeting 3.1 million fresh customers. In the third phase,
13 more districts will come under its net-work by March 2007
with an aim to enlarge its subscriber base by 3.35 million.
Warid will cover the rest of the country in the fourth and
last step ending din December 2007 during which it expects
to add 5 million new clients. Given the political
uncertainties of the election period, it has the challenge
to decide to install microwave links for rapid deployment of
local and country wide transmission net works. It has
stipulated a few critical tasks like site acquisitions for
base stations and energizing these installations as the
suppliers’ responsibility. It is recruiting employees and
has taken an office site in Gulshan 2.
Equipment Suppliers: The major
equipment suppliers are: Alcatel, Ericsson AB, HUWAEI,
ZTE
Corporation.
Recent events: SEA-ME-WE 4 has
been inaugurated in May 2006 to connect Bangladesh to the
superhighway. It is the fourth cable of a series of cables
connecting the continents over almost 20000 km. The cable
has the design capacity of 1.28 tera bytes per second (tbps).
It connects the country with undersea fiber-optic cable
passing from Singapore through Malaysia, Thailand,
Bangladesh, India, Sri Lanka, Pakistan and a number of
Middle – Eastern countries to finally land in France.
Now the
country will have a 10-digabyte data –transfer capacity per
second. 68 times higher than the current speed. It will
facilitate high-speed data and voice transfer and also
increase the number of international communications circuits
that will ultimately lead to enhancement of revenue for the
government.
Huge foreign
exchange through leasing out the unutilized capacity of the
submarine cable.
It creates the
opportunity to introduce broadband data transfer and call
centre services at a very significantly cheap rate.
There will be
scope for software could be made at low cost for export
while e-governance, e-commerce and tele-medicine series
could be easily introduced at cheaper costs. Video
conferencing will enable better services for the above as
well.
BTTB launched
prepaid cards of Tk 500. Tk 200 for land phones on 17 July
2006. ISD and economy ISD (E-ISD) calls can be made from
BTTB’s phones across the country by dialing 010201 while NWD
calls only from Dhaka multi-exchange area.
Potential
Areas for Exploring Business Opportunity:
This sector
that has been emphasized in PSOM, signed Memorandum of
Understanding (MOU) between Royal Netherlands Embassy (RNE)
and External Resource Division (ERD), Ministry of Finance (MOF),
the Government of Bangladesh (GOB) on 7 May 2005. The
following areas hold business opportunities.
Telecommunication has been one of the fastest growing
sectors in Bangladesh. Many local and international
companies are taking advantage by tapping the emerging
market here. Bangladeshi mobile users spend 300 minutes of
talk-time on an average per month, the highest in South East
Asia. So the scope for further growth is immense.
Telecom is an
industry, which requires millions and billion dollars of
investments. Therefore, it may not be appropriate for PSOM
financing, the amount of which is small, up to €825,000.
However,
Telecom Specialists of IIFC (who are former BTTB and BTRC
personnel) had identified two areas which could be
undertaken with a small amount of investment. Due to
inadequate interconnection facilities for mobile phones,
only about 10% of mobile phones can actually call a
landline. A National Interconnection Exchange would solve
this problem.
Several
Internet service providers, featuring electronic mail and
World Wide Web services, now exist in Bangladesh.
Bandwidth, however, is very expensive since the country does
not have an Internet Exchange Point and is not yet connected
to a submarine fiber-optics cable system. Thus, NIX –
National Internet Exchange is the second area which could be
undertaken with a small investment.
Useful Contacts
Post and Telecommunication Ministry
Minister, Mr. Aminul Haque
BTTB
(Bangladesh Telephone and Telegraph Board)
Telecommunication
Bhaban
37/2, Eskaton Garden
Dhaka-1000
Tel:
8311500/8312525/8314200/8312300/8314060/8314570/8314230
Fax: 880 2 8322661-4
BTRC
(Bangladesh Telecom Regulatory Commission)
Name: Mr.
Rustam Ali, Director, Administration
Address: House 10, Rd. 135,
Gulshan 1, Dhaka 1212
Ph: 9893920Tel:9893917-19
Fax: 880 2 9890029
Bangla Phone
Name: Mr. Muhmmad Jamil
Designation: Business Development Advisor
Address: Road 23/A, House 3, Gulshan 1,
Dhaka
Phone: 880-2-9860352
E-mail:
info@banglaphone.net;
bphone@dhaka.net
Tele-Talk - BTTB
House 101, Road 13A,
Block C, Banani
Fax: 880 2 9888535
Grameen
Phone
Address: Road 113/A,
Plot 19/20
Building 5, 6th Floor
Gulshan 2
Tel: 9882990
Fax: 880 2 9882970
Website:
www.grameenphone.com
AKTel
Address: TM
International
BRAC Centre (9th Floor)
75 Mohakhali, CA
Dhaka 1212
Tel: 9887149-53/9885467-8
Fax: 880 2 9885464
City Cell
Pacific Bangladesh Telecom Ltd (PBTL)
Address: 4th Floor,
Pacific Centre
14 Mohakhali, CA
Dhaka-1212
Tel:
8822186/8822187/8825281/8825283
Fax: 880 2 8823575
www.citycell.com
Banglalink
Address: Land View, Level 13,
Commercial Centre
28 Gulshan North C/A
Ph: 880-2-8821256/8811976/8812037
Fax: 8827265
Website:
www.banglalinkgsm.com
Warid Telecom International LLC
168 Gulshan Avenue
Gulshan 2, Dhaka 1212
Phone: 880-2-8834551,
8834552,
Fax: 8802-9863247
Board of
Investment (BOI)
Address: Prime Minister’s Office, Government of Bangladesh,
Jiban Bima Tower, (19 flr), 10 Dilkusha
C/A, Dhaka 1000
Bangladesh
Ph: 880-2-9561430-1
Fax: 880-2-9562312
Website:
www.boibd.org
Infrastructure Investment Facilitation
Centre (IIFC)
IDB Bhaban (6th flr),
Sheer-e-Bangla Nagar
Agargaon, Dhaka 1207
Fax: 880-2-812 4266,
Website:
www.iifc.net
The Embassy of
the Kingdom of the Netherlands
Phn: 8822715-8
Fax: 8823326
Email:
dha-ea@minbuza.nl |
