3 Industry Analysis

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3. Industry Analysis: Overview of Other Mobile PhoneOperators in Bangladesh:

3.1 Grameen Phone

Grameen Phone launched its service on the independence day of Bangladesh on

26th March 1997.

Table 1: GrameenPhone At a Glance

Events Particulars

1 Obtaining License November 28,1996

2 Commercial Launching March 26,1997

3

Products Post-Paid and Pre-Paid

Post-Paid

GP Regular: Both way BTTB Connectivity + ISDconnection

GP National: With BTTB Incoming Connectivity

GP- anytime 300

GP- anytime 450

Pre-Paid

Easy Pre-Paid

Easy Gold

DJuice

4

Sales & Information

centers

GP has sales and information centers in 6

districts.

5 Network CoverageSo far, GrameenPhone has covered 61 districts

along with all divisional H/Qs.6

TechnologyGP uses GSM (Global System for Mobile)

technology

Potential of SME market for the mobile operators in Bangladesh 26


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Source: Newspaper Clippings and Website

Table 2: Customer Growth of GrameenPhone

Year Customer Ba se Gr owth Rate Remarks

1997 18,000 100%

Aver age Growth Rate :

123 %

1998 30,000 67%

1999 60,000 100%

2000 193,000 222%

2001 470,000 144%

2002 750,000 60%

2003 1,050,000 40 %

2005 3,699,000 252%

Source: Newspaper Clippings

International Roaming

GrameenPhone became the first mobile phone operator in Bangladesh to offer its

subscribers International Roaming facilities in March 1999.

GP subscribers who have the International Roaming facility can use their mobile

phones in foreign countries where GrameenPhone has partner networks.

Subscribers of partner networks will also be able to use their mobile phones while

vis it in g Bang lade sh .

Advertisement & Promotion

GP has managed to develop and design the A&P materials from in-house since GP

has its own DTP (Desktop Publishing) unit. However, at the early stage of service,

GP appointed Roop Adverting Agency as GPs adverting agency.

Branding



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GP has a very affluent Branding team and already established an accountable

image in Bangladesh market as GrameenPhone in the hands of the people

3.2 Citycell:

CityCell was offered a cellular license in Bangladesh by the Ministry of Post and

Telecommunication on March 1990. In June 2005 45% share of City Cell has been

acquired by SingTel (Singapore Telecommunications Limited).

Table 3: CityCell At a Glance

Events Particulars

1 Obtaining License March 1990.

2 Commercial

Launching

Augus t 1993 .

3 Products Post-Paid and Pre-Paid



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Post-Paid

Shabar Phone (Mobile 250)

CityCell500

Amar Pho ne

CityCell Premium

Pre-Paid Aalap 24, Aalap B, Aalap Call me

4 Sales and inf or mation

centers

2 in Dhaka, 1 in Chittagong and 1 in Syhlet.

5 Network Coverage Citycell has covered 47 districts along with all

divisional H/Qs

6 Technology CDMA


Table 4: Customer Growth of CityCell

Year Custom er Ba se Gro wth Rate

1997 11,000 100%

1998 19,000 73%

1999 25,649 35%

2000 32,000 25%

2001 49,500 55%

2002 102,000 106%

2003 235,000 130%

2005 325,000 38%

May, 06 750,000 107%



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Benefits of CDMA

Superior voice quality and clarity by eliminating background noise.

Low power consumption; hence higher talk time, enhanced battery life.

Minimum health risks compared to other wireless technologies.

Increased security and privacy as none other then the called person can listen to your

conversation.

Higher data transfer rates.

Reduced interference on other electronic devices.

3.33.3 Bangla Link

Sheba was offered a cellular license in Bangladesh by the Ministry of Post and

Telecommunication on November 11,1996. Sheba launched its service on August

31, 1998. Later on Orascom took over the company, now it is called Banglalink.

Vision of Banglalink:

"Bangla link understands people's needs best and wil l create and del iver

appropriate communication services to improve people's life and make it easier"

Table 5: Banglalink At a Glance



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Events Particulars

1 Products

Pre-Paid

Pre-Paid M2M

Pre-Paid M2M Plus

Pre-Paid Standard

Post-Paid

Post-Paid Standard (350 Tk. Monthly line r ent + ISD)

Post-Paid (350 Tk. Monthly line rent + PSTN-Incoming

+ outgoing)

Post-Paid Mobile to Mobile (150 Tk. Monthly line rent)

2 Sales and

information centers

2 in Dhaka, 1 in Chittagong and 1 in Sylhet

3 Network Coverage 40 districts along with all divisional H/Qs

4 Technology GSM


3.4 Tele Talk

State-owned TeleTalk Bangladesh Limited launched its commercial operation on

31st March 2005 as the countrys fifth cellular operator and first ever in public

sector. The company managed by fixed phone operator Bangladesh Telegraph and

Telephone Board (BTTB) would spend about USD333 for its 250,000 GSM mobile

phones.



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Table 6: Customer Base of TeleTalk

Ye ar Custo mer Ba se

March, 06 100,000


3.5 Market Share of Mobile Phone Companies in Bangladesh:

Presently, AKTEL has a total market share of 25% with GrameenPhone having62%, CityCell 7%, and Banglalink 5%. The new public company, TeleTalk, has a

share of 1% within the span of 1 month since its inception.

Table 7: Market share of the mobile operators

Operators Market Share

GrameenPhone 62%

AKTEL 25%

CityCell 5%

Banglalink 7%



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TeleTalk 1%+


Chart 3: Market Share of Mobile Companies in BD

25%

7%

5%1%

62% Gram een Phone

AKTEL

Bangla Link

City Cell

TeleTalk


Table 8: Strategies and slogans of mobile operators

Mobile Operators Strategy Slogan

CityCell Proven dependability Because We Care

AKTEL Modernity Clearly Ahead

Banglalink Making mobile affordable You, First

GrameenPhone Communication for every body In the hands of people

TeleTalk

Source: Company Website



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Table 9: A Comparative Study of the Mobile Phone Companies

Operators TechnologyDate of

launchingOwnership

Equipment

Suppliers

Nos of

subscribers

AKTEL GSMNovember97

70% TelekomMalaysia, 30%

AK khan

Alcatel,Ericsson,

Huawei

3,500,000

Grameen

PhoneGSM

April97

61% Telenor,

39% Grameen

Telecom

Ericsson 6,000,000

CityCell CDMA August93

55% Pacific

Group, 45%

SingTel

Motorola 750,000

Banglalink GSMSeptember98

100% Orascom

Telecom Limited

Siemens,

Huawei

1,000,000

TeleTalkGSM March 2005 100% BTTB

Alcatel,

Siemens100,000

Source: Company Website

3.6 Barriers to Entry:

Analysis on the overall telecommunication industry in Bangladesh shows a high barrier to

entry in the industry.

The barrier is high because-

The entry involves a substantial capital requirement/initial investment (such as setting

up network towers, tower maintenance cost, government tax, administrative cost, HR

cost, promotional cost etc.)

Because of the high fixed cost involved in the operation, it is hard to achieve the desired

level of Economies of Scale.

Switching cost in this industry is very high and involves a large capital loss.

Bangladesh is a too risky market to penetrate successfully (high political and economical

risks, uncertain weather conditions etc.).

The industry faces high government restrictions due to their complicated policies such as

the enforcement of recent VAT policy of TK.900 on each SIM card.



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The brand identity/image of five present operators (GP, AKTEL, CityCell, Banglalink,

TeleTalk) is highly strong in the market, which will make it difficult for the new entrants

to make an individual identity.

Due to the absence of proper patent rules on technology, the practice of imitation is high

and there is no protection on intelligence flow from companies to companies.

The only factor making it easy for the new entrants is the access to distribution channels

(dealers, distributors), which is high.

3.7 Rivalry among Existing Firms:

Analysis on the overall telecommunication industry in Bangladesh shows a high level of

rivalry among existing firms due to the following reasons:

Telecommunication industry is a fast growing industry in Bangladesh. Therefore, the

level of competition is high since the companies have to cope up with the fast changing

needs of customers by offering new services on a regular basis.

The practice of aggressive marketing, which has created a promotional battle among the

companies, has intensified the rivalry.

Telecommunication is an industry with high fixed costs. This has enhanced the

competition among the operators, as the firms are forced to cut price to enable them to

operate at capacity. Differentiation, both real and perceived, among competing offerings is low, which

further has boosted the rivalry in the industry.

Difficulty of exit from the industry has increased the level of competition.

However, comparing to the market size of mobile phone users in Bangladesh (the

potential market size is 15 million; source: newspaper), the number of competitors in the

industry is low. There are only 4 private and 1 public companies operating in the

industry. Among these companies, only 4 offer GSM technology and 1 offers CDMA

technology. Low number of competitors has narrowed the competition to some extent.


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3 Industry Analysis