July 14, 2009

Roundup: Bangladesh Mobile Subscription Growth Dims

Mobile phone subscription growth in Bangladesh dimmed this year as operators in the backdrop of global economic recession reduced subsidies on sales of new SIM cards thus pushing the prices higher, industry insiders said on Monday. They said higher SIM card fee had hurt the sales of new connections in the country's once booming market, as number of new subscribers dropped sharply in the first half of 2009.

According to the data of the Bangladesh Telecommunication Regulatory Commission (BTRC) released on Monday, the country's six operators in January-June period this year managed to have 2.05 million new subscribers, 78 percent lower than that in the same period a year ago. The statistics of the South Asian country's telecom regulator showed the operators added 9.33 million new users in the first half of 2008.

"This increase is much lower than that in the same period a year ago, meaning that the growth rate is still plunging due basically to price spike of SIM card," a senior official of an operator told on Monday requesting to be unnamed.

According to BTRC's latest data, the operators all together added 280,000 customers in June this year against the number of addition in the same month a year ago,
which was 1.66 million in. Association of Mobile Telecom Operators in Bangladesh (AMTOB), a platform of six operators in the country, said the higher connection fee was impeding the trade growth in the country. Retail prices of per SIM card in Bangladesh market is now ranging at around 200 taka (about 2.9 U.S. dollars) to 950 taka against 50 taka to 300 taka around six months ago.

Zakiul Islam, president of AMTOB, earlier said operators have to pay the government 800 taka per SIM card as tax. Over the last years, the operators were selling SIM cards at subsidized rate to attract more customers. But, he said, operators have downsized the subsidies on sales of SIM cards since January this year.

Another senior official of an operator said the global economic downturn is to be blamed for the reduction in new subscribers as operators cut subsidies on sales of SIM cards to reduce cost of doing businesses as their precautionary measures to fight with the recession impact.

Meanwhile, the AMTOB said the growth in sales of new connections in the country may dip further as the government in current fiscal year beginning from July 1 has imposed 12 percent duty on import of each mobile phone handsets instead of previously 300 taka flat rate.

"Imposition of higher duty might have adverse impact on sales of handsets and may slow down the sector's growth as price hike of handset will ultimately squeeze sales of new connections," Raquibul Kadir, managing director of a leading handset distributing company said on Monday. He said even a little price hike in handsets may cast impact on those who plan to buy a handset for the first time in rural Bangladesh, which is considered to be the future growth centers of the mobile industry as there is hardly any room in city areas.

The latest BTRC data showed the number of subscribers of the six cellphone operators -- Grameenphone, Banglalink, Aktel, Citycell, Teletalk and Warid -- at the end of June stood at 21.16 million, 11.04 million, 8.85 million, 1.96 million, 1.10 million and 2.58 million respectively. With new additions in the first half of this year, the BTRC data showed, the number of the country's total cellular users reached 46.69 million at the end of June, about 31.6 percent of the total population.

Source: TMCnet


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