August 25, 2009

Mobile Operators Added 1.28m in July

Monthly mobile subscriber acquisition growth marked a 357 percent rise in July to 1.28 million compared to only 0.28 million the previous month, indicating a price war in the market against the backdrop of no SIM tax waiver in the 2009-10 budget.

The July customer acquisition by six mobile operators is the highest in one year. The third largest operator Aktel alone gained maximum customers adding 1 million in July, thanks to its hurried promotional offer just after the announcement of the new budget.

The total number of mobile phone customers stood at 47.97 million in July. GrameenPhone still leads the market with 21.15 million customers, followed by Banglalink's 11.27 million and Aktel's 9.90 million in July.

Industry insiders said the price war is already in place
with the Aktel's Tk 199 per connection offer. Then Warid came up with a Tk 250 offer for Tk 300 per connection, followed by Banglalink's Tk 200.

The top player GrameenPhone is completely absent from the new customers acquisition with the lowest price, as it is on retention stage with having 46percent market shares.

Although the government slapped SIM tax on new subscription, the operators used to pay the tax to add more customers to their networks amid a stiff competition in the market.

But as subsidizing had become a burden for the operators to touch breakeven, all of them demanded withdrawal of SIM tax and stopped pay for customers a year ago.

"Such price war is not good for the market. But most operators are compelled to join the race to keep their existing position in the market," said Zakiul Islam, president of the Association of Mobile Telecom Operators Bangladesh.

Islam said there was a consensus among operators on subsidising SIM (subscriber identity module) anymore. But when the budget ruled out any possible tax withdrawal on SIM, operators one after another came back to the price war.

The price war heavily supports the day-to-day sale, said the association leader, adding that the sales of new connections range from 50,000 to 70,000 per day.

Ashraful H. Chowdhury, general manager (government and corporate affairs) of Warid Telecom said, "As a small operator, we have to follow what big operators do. In such case, we have to do nothing but reduce the price, although SIM subsidy is nothing but a losing concept."

By the end of July Warid customers stood at 2.61million, when CityCell bagged 1.96 million and TeleTalk 1.10 million.

Source: The Daily Star


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