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New Media and Mass Communication                                                                        www.iiste.org
ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online)
Vol 4, 2012


         Problems and Prospects of Telecommunication Sector of
                    Bangladesh: A Critical Review
                                     Ms. Farhana Zamil1, Md. Miraj Hossen2
   1. Senior Lecturer, Department of Business Administration, IBAIS University, Dhanmondi, Dhaka – 1205,
                           E-mail: shaplafz@yahoo.com, Website: www.ibais.edu
    2. Lecturer, Department of Accounting and Information Systems, Faculty of Business Studies, Jagannath
                        University, Dhaka - 1100, Bangladesh, Website: www.jnu.ac.bd
                        * E-mail of the corresponding author: miraj_hossen@yahoo.com

Abstract:
Communication is an integral part of human life. From the very beginning of human civilization people were
tried to communicate each others to fulfill their social needs. Over the passes of time though the tools of
communication were changed but still it is exist in the society. Currently cellular phone has brought a revolution
in the field of communication. Telecommunication makes the whole world in a small village and by using this
service life become more comfortable and easier. This sector plays a vital role in the economy of Bangladesh
occupying the top positions among others. But recently this sector faces some crisis related to governmental SIM
tax, corporate tax and also the competition in the market. For these reasons, last few years both governmental
revenue as well as the growth rate of subscribers is decreasing. If the Government take necessary steps beside the
privatization, the sector could move forward quickly, which will also help Government to generate the revenues
and create job opportunity.Keeping all these issues in consideration, this paper discusses the present condition of
the telecommunication sector of Bangladesh (which give special emphasis on the cellular phone) , what are the
major challenges faces by the operators, and also tries to find out the prospects of this sector. It also provides a
set of recommendations based on this analysis. The study is explanatory in nature which is based on extensive
literature review and secondary data sources.
Keywords: Communication, Telecommunication, Cellular phone, Privatization, Civilization.

1.0 Introduction:
Telecommunication is the science of communicating information over distance by electronic transmission of
impulses, as by telephone, telegraph, television, satellites, and radio. Another way, it can be said,
telecommunication is any process or group of processes that allows the transmission of audible or visible
information or data over long distance by means of electronic or electric signals. But in our study, by
Telecommunication we want to mean only the service of both private and Government mobile phone or cellular
phone in Bangladesh. We totally separated cellular phone from other telecom services like telephone (land
phone), telegraph, television, radio and others to make our selected sector more specific and understandable.
     Once upon a time a “Telephone” was a symbol of status. It was quite difficult and lengthy process to have a
telephone connection at home. Think about the time of emergency when someone needs to talk in abroad! There
was so harassment in getting line, line was not clear, distance call rate was so high that sometimes poor people
could not avail it easily. But now the situation is totally changed. Now-a-days technology is available in the hand
of root level people. A drastically change has come in the life style of people. Life is very easy now.
Employment opportunity has been increased. Government has also been benefited by the revenue from this
sector. Information technology has got acceleration by mobile phone technology. New and modern technology is
coming in the near future. These rapid changes have been possible only for the mobile company. A research
institution in India reveals that if using of mobile phone increase by 10% in a developing country, government
revenue increase by 1.12 % in a year. This sector is also contributing much more in our country. Moreover the
call rate and the network of the telecom in our country is good enough and affordable for the customers. In 2006
the average call rate was tk 2.43/Minute. In 2011 it was reduced Tk.0.63 (Approximate) Minute which is the
lowest call rate in the world.
1.1 objectives of the Study:
The broad objective of the paper is to make an extensive study on the telecommunication sectors of Bangladesh
and also bring this sector near and familiar to the common people. The specific objectives are:
      • To identify the problems, challenges and prospects of the sectors (SWOT)
      • To find out the determinants that affects the expansion (growth) of the sector.
      • To appraise the performance of our telecom sector and its contribution the development of the whole
           economy.
      • To give some suggestions this may help to increase the govt. revenues and growth of the sector as well.
1.2 Rationale of the Study:

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New Media and Mass Communication                                                                        www.iiste.org
ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online)
Vol 4, 2012

Telecommunication is an important sector of any country which can play vital role in the nation’s economy. But
we the people of our country don’t know enough about the problems, roles, prospects, and challenges of this
sector. It is not possible to know by individual study because there is not enough comprehensive and well
organized study exist on it; this report is a small attempt to make the sector familiar to the common people and
also the related persons of this sector.
1.3 Research Methodology: Sources of Data/ Data use:
The present study is descriptive as well as suggestive in nature. This study basically covers a period of 12 years
starting from 1997 to 2008. An attempt has also been made to include the latest information whenever available.
Both primary and secondary data have been used. However, the major reliance is on secondary data at national
and international levels. Primary data were collected through interview and discussions with some officials and
experts of different telecom service providers. Moreover annual reports of different telecom, articles published in
newspapers, conference papers and seminars proceedings have been carefully studied to procure the needed
information. The report only presents simple frequency and quantitative tables. The findings of the study
should be viewed more in a quantitative focus than in absolute quantitative terms whenever necessary, various
statistical tools and techniques have been applied for the analysis and interpretation of data.
1.4 Limitations of the Study:
Major limitation of the study is lack of available information and previous workings on the topic. We don’t have
enough supportive articles to make an extensive literature review. Besides this the persons whom we interviewed
for primary data they also felt reluctant to provide the proper information. Moreover, most of the secondary data
we used were scattered.

2.0 Telecommunication Sector of Bangladesh: At a Glance
There is many ups and down in the mobile phone industry in Bangladesh. At present there are six mobile
operators in our country. According to the number of subscribes and profitability Grameen phone Ltd is in the
top position among six operators. Except teletalk though their local names are Grameenphone, Banglalink, Robi,
Airtel, Citycell but their main companies are the world’s famous and big organization. They have invested a lot
and also they have more plans for investment. There is no doubt that their key objective is to earn profit.
Government should create an environment and principles for profit. Besides these government should preserve
consumer’s right.
      At present there are six mobile operators in our country. According to the number of subscribes and
profitability Grameen phone Ltd is in the top position among six operators. Except teletalk though their local
names are Grameenphone, Banglalink, Aktel, Warid, Citycell but their main companies are the world’s famous
and big organization. They have invested a lot and also they have more plans for investment. There is no doubt
that their key objective is to earn profit. Government should create an environment and principles for profit.
Besides these government should preserve consumer’s right.
2.1 Market Share Analysis of Telecom in Bangladesh:
At present the total number of Mobile Phone Active Subscribers has reached 72.959 million at the end of March
2011. Among the operators at the end of March 2011, Grameen phone grab the highest subscriber with 31.982
Banglalink is in the second positions with the total subscriber base of 20.126million and then Robi with
13.259million subscribers stands as the third largest mobile phone operator in Bangladesh .Airtel, Citycell, and
Teletalk possess 4th, 5th and 6th position respectively. (Airtel Bangladesh had 4.607million subscribers, Citycell's
total mobile subscriber base is 1.787million, TeleTalk is the 6th largest mobile phone operator in Bangladesh
with 1.198million subscribers.
      The total number of Mobile Phone Active Subscribers has reached 72.959 million at the end of March
2011. The Mobile Phone subscribers are shown below:




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New Media and Mass Communication                                                                           www.iiste.org
ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online)
Vol 4, 2012

           Operators Name                  Active Subscribers     Active Subscribers   Active Subscribers
                                            (2011, March)         (December 2010)      (Dec 2009)
Grameen Phone Ltd. (GP)                           31.982                29.970                  23.26
Orascom Telecom Bangladesh                                                                      13.87
                                                  20.126                19.327
Limited (Banglalink)
Robi Axiata Limited (Robi)                        13.259                12.368                     9.29
Airtel Bangladesh Limited (Airtel)                 4.607                 3.956                     2.99
Pacific Bangladesh Telecom Limited                                                                 1.95
                                                   1.787                1.811
(Citycell)
Teletalk Bangladesh Ltd. (Teletalk)                1.198                1.211                      1.07

                Total                             72.959                68.643                    52.43
Source: http://www.btrc.gov.bd

The number of active subscribers as on March 2011 can be seen at a glance in the following table and graph:

Name of Operators                   Active Subscribers (2011, March), Million    Market Share (%)
           GP                                        31.982                                    44
           BL                                        20.126                                    28
          Robi                                       13.259                                    18
         Airtel                                       4.607                                    6
        City Cell                                     1.787                                    2
        Tele Talk                                     1.198                                    2
          Total                                      72.963                                   100


                                       Active S ub scribers (2011, March )



                                                 2% 2%
                                         6%




                            18%                                                                 GP
                                                                       44%                      BL
                                                                                                Robi
                                                                                                A irt el
                                                                                                City Cell
                                                                                                Tele Talk




                                       28%




Table and Figure 1: Market share analysis of telecommunication sector in Bangladesh
** This figure in March 2011(BTRC)

2.1.1 Forecasted Straight-line trend of Subscriber (Using Least square Time Series Analysis):

The following calculation present the total number of actual and forecasted subscribers of different mobile phone
company of Bangladesh for last five years:




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ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online)
Vol 4, 2012



  Year                Subscriber                   (x)                 xy               X2             Ye = a + bx
                    In million (y)
  2007                  34.37                     -2                  -68.74         4                  34.37
  2008                  44.64                     -1                  -44.64         1                  44.49
  2009                  52.43                     0                     0            0                  54.61
  2010                 68.643                     1                  68.643          1                  64.73
  2011                 72.959                     2                  145.92          4                  74.85
  N=5                ∑y=273.042                  ∑x=0              ∑xy=101.183     ∑x2=10             ∑ye=273.05


        a=
             ∑ y = 273.042 = 54.61 ,                     b=
                                                              ∑ xy = 101.183 = 10.12
              N           5                                   ∑x   2   10


   SL             Year        Expected Subscriber( in millions): ye = a + bx                  Here,
                                                                                              a = 54.61
   1       2007       54.61 + 10.12 × (-2) = 34.37
                                                                                              b = 10.12
   2       2010       54.61 + 10.12 × (-1) = 44.49                                            x = -2,-1,4,7,10
   3       2013       54.61 + 10.12 × 4 = 95.09
   4       2016       54.61 + 10.12 × 7 = 125.45
   5       2019       54.61 + 10.12 × 10 = 155.81
**The above subscribers' numbers are declared by the mobile operators

2.2 Investment perspective of telecom in Bangladesh:
Mobile phone sector is the top sector for foreign investment and source of government revenues. Enormous
investment is made as well as government earns huge revenues from this sector. The position of Bangladesh in
attracting the foreign investment is not in satisfactory level. But Bangladesh is one of the top ten countries in
the world for investment in this sector. From 1997 to June 2008 total investment in this sector is Tk. 229.56
billion. The scenario is as follows-
The actual and forecasted investment in the telecom sector of Bangladesh has got the following picture for the
last few years:
  Year      Actual Investment               Deviation from                 xy            X2            Ye = a + bx
               In Crore (y)                   2002 (x)                                                 Forecasted
1997 (1)           259.3                          -5                 -1296.5             25            -1347.641
1998 (2)           112.1                          -4                  -448.4             16            -712.8528
1999 (3)           181.3                          -3                  -543.9              9             -78.0646
2000 (4)           235.1                          -2                  -470.2              4             556.7236
2001 (5)           413.1                          -1                  -412.1              1            1191.5118
2002 (6)           395.1                           0                     0                0              1826.3
2003 (7)           533.3                           1                   533.3              1            2461.0882
2004 (8)          1583.3                           2                  3166.6              4            3095.8764
2005 (9)          4397.9                           3                 13193.7              9            3730.6646
2006 (10)         3788.8                           4                 15155.2             16            4365.4528
2007 (11)          81.90                           5                  40950              25             5000.241
 N=11          ∑y=20089.3                       ∑x=0               ∑xy=69826.7         ∑x2=110        ∑ye=20096.35
Here, ye = a + bx;

  a=
        ∑ y = 20089 .3 = 1826.3 ,                             b=
                                                                   ∑ xy = 69826.7 = 634.7882
         N               11                                        ∑x  2
                                                                            110




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New Media and Mass Communication                                                                           www.iiste.org
ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online)
Vol 4, 2012


                                           Trend Analysis of Investemnt

                10000


                8000


                6000
   Investment




                                                                                                        Series1
                4000
                                                                                                        Series2


                2000


                    0
                           1    2      3      4      5      6           7   8    9     10     11

                -2000
                                                          Ye a r


           •      Series 1 indicates the Actual investment where as series 2 is forecasted investment
           •      Using Least square Time Series Analysis

Table and Figure 3: Trend Analysis of actual and forecasted investment
  SL        Year     Expected Investment ( in crore): ye = a + bx
                                                                                                        Here,
    1                   1997    1826.3 + 634.7882 × (-5) = -1347.641                                    a = 1826.3
    2                   2000    1826.3 + 634.7882 × (-2) = 556.7236                                     b = 634.7882
    3                   2003    1826.3 + 634.7882 × 1 = 2461.0882                                       x = -5, -2, 1, 4,
    4                   2006    1826.3 + 634.7882 × 4 = 4365.4528                                       7, 10, 13, 16, 19,
    5                   2009    1826.3 + 634.7882 × 7 = 6269.821                                        ----
    6                   2012    1826.3 + 634.7882 × 10 = 8174.182
    7                   2015    1826.3 + 634.7882 × 13 =10078.545
    8                   2018    1826.3 + 634.7882 × 16 = 11982.911
    9                   2021    1826.3 + 634.7882 × 19 = 13887.311

From the above table and graph we can see the actual and projected investment of different telecom company for
the last few years. It indicates the actual investment cross the estimated investment after fourth year of their
operations. Actually it was out of our imagination that we will have any investment in this sector in the year of
1997-2000 that’s why it indicates the estimated investment is negative. By using the least square time series
analysis we just estimated some year ahead up to 2021 to assess what will happen to achieve the Government
vision 2021.
2.3 Government’s Revenues from Telecom Sector of Bangladesh:
The contribution of Telecom sector in country’s total GDP is around 1.46%. The major portion of the
contribution comes from mobile phone sector. Revenue is also increasing every year from this sector. Again this
sector is contributing about 10% of the total revenues.
The actual and the forecasted revenues from the telecom sector of Bangladesh can be shown in the following
table:




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New Media and Mass Communication                                                                                  www.iiste.org
ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online)
Vol 4, 2012

                      Revenue forecasting: Straight line trend (Using Least Square Time Series Analysis)

   Year                    Actual Revenue (y)       (x)               xy             X2        Forecasted: Ye = a + bx
   1997                            62               -5              -310             25                  -884
   1998                            53               -4              -212             16               -425.018
   1999                           109               -3              -327              9                 33.964
   2000                           288               -2               576              4                 492.95
   2001                           447               -1              -447              1                 951.93
   2002                           707                0                0               0                1410.91
   2003                           951                1               951              1              1869.892
   2004                           1846               2             3692               4              2328.874
   2005                           2174               3             6522               9              2787.856
   2006                           3250               4             13000             16              3246.838
   2007                           5639               5             28195             25                3705.82
   N=11                        ∑y=15520                          ∑xy=50488         ∑x2=110    ∑ye=155200.16


Ye = a + bx,                      a=
                                        ∑ y = 1410.91,                              b=
                                                                                         ∑ xy = (50488÷110) = 458.982
                                         N                                               ∑x  2




                                             Trend Analysis of Revenues

                10000
                    8000
                    6000
    R even ue




                                                                                                   Forecasted Trend
                    4000
                                                                                                   Actual Trend
                    2000
                       0
                             1      2    3      4   5      6      7        8   9   10 11
                -2000
                                                          Year


                              Table and Figure: Trend Analysis of actual and forecasted Revenues.

Expected (forecasted) Revenues from Telecom Sector of Bangladesh:

            SL               Year        Expected Revenues ( in crore): ye = a + bx
                1            1997        1410.91 + 458.982 × (-5) = - 884
                                                                                                        Here,
                2            2000        1410.91 + 458.982 × (-2) = 492.95                              a = 1410.91
                3            2003        1410.91 + 458.982 × 1 = 1869.892                               b = 458.982
                4            2006        1410.91 + 458.982 × 4 = 3246.838                               x = -5, -2, 1, 4,
                5            2009        1410.91 + 458.982 × 7 = 4623.784                               7, 10, 13, 16, 19,
                6            2012        1410.91 + 458.982 × 10 = 6000.73                               ----
                7            2015        1410.91 + 458.982 × 13 = 7377.676
                8            2018        1410.91 + 458.982 × 16 = 8754.622
                9            2021        1410.91 + 458.982 ×19 = 10131.568



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Vol 4, 2012

The above table, calculation and graph presents the actual revenues what Bangladesh Government has got form
the telecom sector and what were the expectation for last few years. It also indicates the actual revenues were
less than the forecasted revenue. By using least square time series analysis we also tried to forecast what will be
the Government’s revenue in the year of 2021 when the Government want to achieve their vision 2021.

3.0 Problems and Prospects of Telecom Sector of Bangladesh:
Actually problems and prospects of any business sector is related to its strengths, weaknesses, opportunities,
threats (SWOT) and also political, economical, socio-cultural and technological (PEST) issues of any country as
well as the organization. Though telecommunication sector of our country face a lots of problems, it’s also a
prospective field till now.
3.1 Problems of Telecom Sector of Bangladesh:
     a) High Competition: High competition in mobile or telecom sector in our country is one of the main
          problems. If we have a look in the primary stage of our telecom sector, we had only city cell and
          Grameen phone and they were operating their business in own way. They took the first mover
          advantages but when Banglalink, Robi, Teletalk, Airtel come to compete in the market then the market
          became more competitive and still there exist a high competition in this sector. So to face this
          competition/ challenge some of the operators are thinking to merge their business to survive in the
          market
     b) Poor Economic Background: As a least developed or developing country Bangladesh has a poor
          economic background where a major portion of our people are living under the poverty line. So it is
          difficult to operate such type of business in Bangladesh with making a remarkable profit. By
          considering this economic background, the telecom sector is to fixed the call rate, should reduce tax on
          SIM and sacrifice more to operate their business.
     c) Instable Political Situation: Our previous history tells that Bangladesh is not a politically stable country.
          Different types of political violence, pressure of army, corruption and many more problems make our
          country instable and also has made this sector insecure. If we have a look last few year our democracy
          had face many ups and downs, as we don’t have any foreign direct investment (FDI) in any of the
          sector.
     d) High Rate of Corporate Tax: As the economic condition is not good of Bangladesh, the
          telecommunication sector is not able to make profit. Moreover they are to pay high corporate tax which
          is 40%-45%. It is another major problem or challenge to operate challenging day by day
     e) SIM Tax: In Bangladesh the mobile operator is to pay Tk. 800-1200 as tax in each SIM from fiscal year
          2005-06. Firstly it was Tk 1200 and later on by considering different facts it is fixed as tk 800. Though
          tax is to paid by the subscribers directly but the company give incentive to continue the sell the SIM at a
          lower price in the competitive market to hold their position. But now it become impossible for their all
          the company to carry on this burden. As the growth rate of the subscriber has been declined, the
          companies are in challenging position.
     f) Import Tax: In case of technological perspective, Bangladesh is not good enough. So mobile phone
          operators is to transfer or import technologies, hand sets and other equipments related to the
          telecommunication and for this they are to pay 35% import tax on it. It is also a great problem for this
          sector to make profit and survive in the market.
3.2 The Telecom market of Bangladesh & Michel Porter’s 5 forces:
In Bangladesh telecom industry, there are already 6 giant companies trying to find their niche. It has been clearly
noticed that as the market is growing, proportionately all the companies are getting new subscribers depending
their nation wise coverage. So, it is assumed that if even the bargaining power of customer seem to be high due
to high growth rate of market each company is some how getting benefited. Bargaining power of supplier is low
as there are lot of telecom supplier is available. The presence of six competitors makes high competition.
Supplier power is low as there is available telecom supplier. The presence of 6 competitors in the market
makes high availability of substitute & competition as entry barrier is also low because of their high investment
& easy entry policy. The following way we can present the summary of the porter’s five forces compare with the
telecom industry in Bangladesh:




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New Media and Mass Communication                                                                      www.iiste.org
 ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online)
 Vol 4, 2012

                   Market forces                                Challenges
                   Entry barrier                                Low
                   Competitive Rivalry                          High
                   Threat of Substitute product                 Moderate
                   Power of buyer                               High
                   Power of supplier                            Low

 We can also present the Michel Porte’s five forces model in relation with our telecom industry like as follows-

                               New Market Entrants, eg:
                                  • entry ease/barriers
                                  • geographical factors
                                  • incumbents resistance
                                  • new entrant strategy
                                  • routes to market




                                                                        Buyer Power, eg:
Supplier Power, eg:                                                        • buyer choice
   • brand                         Competitive Rivalry, eg:                • buyers
        reputation                    - Number and size of                     size/number
   • geographical                     firms                                • change
        coverage                      - Industry size and                      cost/frequency
   • product/servi                    trends                               • product/service
        ce level                      - fixed v variable cost                  importance
        quality                       bases                                • volumes, JIT
   • relationships                    - Product/service                        scheduling
        with                          ranges
        customers                     - Differentiation,
                                      strategy



                               Product and Technology
                               Development, eg:
                                  • alternatives price/quality
                                  • market distribution
                                       changes
                                  • fashion and trends
                                  • legislative effects




                                  Figure: Michel Porter’s Five Forces Analysis
                  Source: Cahrles W. Hill, Book: International Business, Page 159, Fourth edition.

 3.3 Prospects (Growth) of Telecom Sector of Bangladesh:
 Though there are lots of problem exists in the telecom sector of Bangladesh; it is also a prospective sector both
 for the investors as well as the Government. Till now it has a potential market as more than two third of the
 population are out of this services. Let’s have a look on the rate for the last few years.
      The Growth Rate of Subscribers in 2004 was 117.57%, in 2005 123.31%, in 2006 124.44% and in 2007 it
 was 65.25%.but the worst situation is in 2008.in first quarter the growth rate was 13.27%, in second quarter it
 was 13.25%, in third quarter 3.18% and in last quarter of the year there was no growth rate rather it was


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downward. The scenario of progress indicates that such type of growth rate can be maintained within next 10-15
years Bangladesh will be a tele- density country.
     Previously it was that mobile phone users will increase by 10% every 100 people when government
establishes telecommunication principle. At that time mobile phone user was less than 1/100 people which
was .04. By analyzing the current growth rate of mobile phone of BTRC, it could be tell that by 2011, total
number mobile phone will be increase at above 5.5 crore and tele-density will be more than triple than
expectation which is 34/100 people. The obvious reason is only the mobile company and the users. The operators
expect that Bangladesh has potential to reach more than a 55% penetration rate in the next 5 years if Government
relaxes tax policy.

4.0 Role of Telecommunication Sector to Bangladesh Economy:
In Bangladesh the largest structure of privatization become possible due to the investment of different
telecommunication companies. The FDI in this sector till September 2008 was Tk. 30 thousand crore. Due to the
global recession it may slightly decrease in the financial year2009-10. According to a report of world famous
Auditing Institution Deloitto, “In developing country, if using of mobile phone increase by 10%, government
revenue will increase by 1.2% in a year.” Moreover it plays a significance role to develop the economic
condition of Bangladesh.
4.1 Job Creation and Reduced Unemployment:
To reduce unemployment problem telecom industry plays a vital role by creating employment opportunities in
Bangladesh. A study show, till 2008 6 lakh 75 thousand people of our country are directly or indirectly involve
in this sector for job and among them 15% are women. So it also can say this sector also help to empower the
women in our country.
4.2 Sources of Government Income and Revenue:
It is one of the largest sectors for government to get revenue. The contribution of telecom sector in our country’s
total GDP is around 1.46% and the major portion of this contribution comes from the mobile phone companies.
Till September 2008 the contribution of this sector to our economy was tk 20 thousands crore which was about 8%
of the total revenues.
4.3 Listed in Stock Market in Bangladesh:
Though telecom started its business in private sector but currently phone has been listed in stock market and
offered shares to the public about tk 486 crore which is a good sign of this sector. This will also help to operate
their business and increase public image to the mass people in our country. Shareholders of Grameen phone
became profitable which can also help our economy.
4.4 Dramatic Changes in Communication System:
Cellular phone has brought a dramatic change in the communication system in our society. Life has become fast,
easy and comfortable in terms of business and society. By using this device we can connect with all over the
world within short period of time and also can share information and sophisticated technology.
4.5: Develop Corporate Culture and Make more Competitive:
Telecom sector specially phone company is the pioneer to establish the corporate culture in Bangladesh. Now a
day, most of the private organization as well as some public organization are practicing this culture which make
the market more competitive and the employee, people and government can be benefited from this cultural
environment.
4.6 CSR and Telecommunication:
The telecommunication section also plays important role by contributing to health, education, environment
sports and all other social sector as corporate social responsibility (CSR).it is contributing to cancer hospital,
scholarship for the students and arranging different types of training programs for human development. It also
contribute to the beautification of our different cities, provide relief in different area, health line and service,
make people aware to the environment and doing different types of social works. This sector acts as a member of
society.

5.0: Conclusion and Recommendation:
From the above discussion it can be said that the Bangladesh telecom market has lot of potential to offer
considering strategically ignorable or somehow alterable threats. The market seems to be very potential &
prospective. Lots of opportunities are waiting. Bangladesh has cheap labor Communication infrastructure is in
good condition. Customer demand for telecom product is also high. Govt. policies are also becoming liberal.
Though telecommunication sector plays a vital role in our economy by creating job, generating revenues and
contributing different type of social programs but our tax system and market structure makes it a non-profitable
sector. So it is essential to establish an ICT industry immediately to get continuous support from this sector. To
expand this sector we need to ensure a friendly environment and monitoring and control system which will take


                                                       24
New Media and Mass Communication                                                                  www.iiste.org
ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online)
Vol 4, 2012

care and give suggestions to solve the problems of this sector. More over the aims and objectives of national
telecom policy (NTP)/1998 and Bangladesh telecommunication act (BTA)/2001 must have to apply properly to
ensure the friendly environment and solve the existing problem of this sector. Besides this the Government
should reconsider their tax policy. One study shows, if the tax on SIM and imported equipments is totally
reduced, the subscribers will increased 9.5 crore and business will increase form 30% to 56%. As result
government can earn additional tk 50 billionSo our government should think and reconsider the tax policy which
also can help to ensure their election commitment/ agenda of “Digital Bangladesh by 2021”

References:
Ahmed Jashim, Akhter Afsana & Dilshad Segufta (2007), “The Impact of Information Source on SIM Purchase
Behavior” D.U Journal of Marketing, Vol 10
Anand Nitin & Mukharjee, “A study on telecom market”
Cooper R.D & Schindler, P.S (2003). Business Research Methods. McGraw-Hill.International Edition.
Islam Ifti, “A study on Bangladesh telecom sector”
M Abul Eusuf, Mokammel Karim Toufique. -“Trade development & Poverty linkage: A case study of cellular
phone in Bangladesh”
Malakar Bipul, Khan Morshed, Ahmed Sabbir & Chowdhury Nusrat, “Factors Affecting clints buying behavior
towards mobile phone operator”
http://en.wikipedia.org/wiki/Airtel_Bangla
http://en.wikipedia.org/wiki/Citycell
http://en.wikipedia.org/wiki/Grameenphone)
http://en.wikipedia.org/wiki/Robi)[1]
http://en.wikipedia.org/wiki/Teletalk
http://www.btrc.gov.bd/
http://en.wikipedia.org/wiki/Banglalink)
“The Daily Prothom Alo” 11th May, 2009, P. 14
“The Daily Samokal”17th May, 2009, P. 10-14 (Special Supplement of World          Telecommunication and
Society Day-2009)




                                                     25
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Problems and prospects of telecommunication sector of bangladesh a critical review

  • 1. New Media and Mass Communication www.iiste.org ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online) Vol 4, 2012 Problems and Prospects of Telecommunication Sector of Bangladesh: A Critical Review Ms. Farhana Zamil1, Md. Miraj Hossen2 1. Senior Lecturer, Department of Business Administration, IBAIS University, Dhanmondi, Dhaka – 1205, E-mail: shaplafz@yahoo.com, Website: www.ibais.edu 2. Lecturer, Department of Accounting and Information Systems, Faculty of Business Studies, Jagannath University, Dhaka - 1100, Bangladesh, Website: www.jnu.ac.bd * E-mail of the corresponding author: miraj_hossen@yahoo.com Abstract: Communication is an integral part of human life. From the very beginning of human civilization people were tried to communicate each others to fulfill their social needs. Over the passes of time though the tools of communication were changed but still it is exist in the society. Currently cellular phone has brought a revolution in the field of communication. Telecommunication makes the whole world in a small village and by using this service life become more comfortable and easier. This sector plays a vital role in the economy of Bangladesh occupying the top positions among others. But recently this sector faces some crisis related to governmental SIM tax, corporate tax and also the competition in the market. For these reasons, last few years both governmental revenue as well as the growth rate of subscribers is decreasing. If the Government take necessary steps beside the privatization, the sector could move forward quickly, which will also help Government to generate the revenues and create job opportunity.Keeping all these issues in consideration, this paper discusses the present condition of the telecommunication sector of Bangladesh (which give special emphasis on the cellular phone) , what are the major challenges faces by the operators, and also tries to find out the prospects of this sector. It also provides a set of recommendations based on this analysis. The study is explanatory in nature which is based on extensive literature review and secondary data sources. Keywords: Communication, Telecommunication, Cellular phone, Privatization, Civilization. 1.0 Introduction: Telecommunication is the science of communicating information over distance by electronic transmission of impulses, as by telephone, telegraph, television, satellites, and radio. Another way, it can be said, telecommunication is any process or group of processes that allows the transmission of audible or visible information or data over long distance by means of electronic or electric signals. But in our study, by Telecommunication we want to mean only the service of both private and Government mobile phone or cellular phone in Bangladesh. We totally separated cellular phone from other telecom services like telephone (land phone), telegraph, television, radio and others to make our selected sector more specific and understandable. Once upon a time a “Telephone” was a symbol of status. It was quite difficult and lengthy process to have a telephone connection at home. Think about the time of emergency when someone needs to talk in abroad! There was so harassment in getting line, line was not clear, distance call rate was so high that sometimes poor people could not avail it easily. But now the situation is totally changed. Now-a-days technology is available in the hand of root level people. A drastically change has come in the life style of people. Life is very easy now. Employment opportunity has been increased. Government has also been benefited by the revenue from this sector. Information technology has got acceleration by mobile phone technology. New and modern technology is coming in the near future. These rapid changes have been possible only for the mobile company. A research institution in India reveals that if using of mobile phone increase by 10% in a developing country, government revenue increase by 1.12 % in a year. This sector is also contributing much more in our country. Moreover the call rate and the network of the telecom in our country is good enough and affordable for the customers. In 2006 the average call rate was tk 2.43/Minute. In 2011 it was reduced Tk.0.63 (Approximate) Minute which is the lowest call rate in the world. 1.1 objectives of the Study: The broad objective of the paper is to make an extensive study on the telecommunication sectors of Bangladesh and also bring this sector near and familiar to the common people. The specific objectives are: • To identify the problems, challenges and prospects of the sectors (SWOT) • To find out the determinants that affects the expansion (growth) of the sector. • To appraise the performance of our telecom sector and its contribution the development of the whole economy. • To give some suggestions this may help to increase the govt. revenues and growth of the sector as well. 1.2 Rationale of the Study: 16
  • 2. New Media and Mass Communication www.iiste.org ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online) Vol 4, 2012 Telecommunication is an important sector of any country which can play vital role in the nation’s economy. But we the people of our country don’t know enough about the problems, roles, prospects, and challenges of this sector. It is not possible to know by individual study because there is not enough comprehensive and well organized study exist on it; this report is a small attempt to make the sector familiar to the common people and also the related persons of this sector. 1.3 Research Methodology: Sources of Data/ Data use: The present study is descriptive as well as suggestive in nature. This study basically covers a period of 12 years starting from 1997 to 2008. An attempt has also been made to include the latest information whenever available. Both primary and secondary data have been used. However, the major reliance is on secondary data at national and international levels. Primary data were collected through interview and discussions with some officials and experts of different telecom service providers. Moreover annual reports of different telecom, articles published in newspapers, conference papers and seminars proceedings have been carefully studied to procure the needed information. The report only presents simple frequency and quantitative tables. The findings of the study should be viewed more in a quantitative focus than in absolute quantitative terms whenever necessary, various statistical tools and techniques have been applied for the analysis and interpretation of data. 1.4 Limitations of the Study: Major limitation of the study is lack of available information and previous workings on the topic. We don’t have enough supportive articles to make an extensive literature review. Besides this the persons whom we interviewed for primary data they also felt reluctant to provide the proper information. Moreover, most of the secondary data we used were scattered. 2.0 Telecommunication Sector of Bangladesh: At a Glance There is many ups and down in the mobile phone industry in Bangladesh. At present there are six mobile operators in our country. According to the number of subscribes and profitability Grameen phone Ltd is in the top position among six operators. Except teletalk though their local names are Grameenphone, Banglalink, Robi, Airtel, Citycell but their main companies are the world’s famous and big organization. They have invested a lot and also they have more plans for investment. There is no doubt that their key objective is to earn profit. Government should create an environment and principles for profit. Besides these government should preserve consumer’s right. At present there are six mobile operators in our country. According to the number of subscribes and profitability Grameen phone Ltd is in the top position among six operators. Except teletalk though their local names are Grameenphone, Banglalink, Aktel, Warid, Citycell but their main companies are the world’s famous and big organization. They have invested a lot and also they have more plans for investment. There is no doubt that their key objective is to earn profit. Government should create an environment and principles for profit. Besides these government should preserve consumer’s right. 2.1 Market Share Analysis of Telecom in Bangladesh: At present the total number of Mobile Phone Active Subscribers has reached 72.959 million at the end of March 2011. Among the operators at the end of March 2011, Grameen phone grab the highest subscriber with 31.982 Banglalink is in the second positions with the total subscriber base of 20.126million and then Robi with 13.259million subscribers stands as the third largest mobile phone operator in Bangladesh .Airtel, Citycell, and Teletalk possess 4th, 5th and 6th position respectively. (Airtel Bangladesh had 4.607million subscribers, Citycell's total mobile subscriber base is 1.787million, TeleTalk is the 6th largest mobile phone operator in Bangladesh with 1.198million subscribers. The total number of Mobile Phone Active Subscribers has reached 72.959 million at the end of March 2011. The Mobile Phone subscribers are shown below: 17
  • 3. New Media and Mass Communication www.iiste.org ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online) Vol 4, 2012 Operators Name Active Subscribers Active Subscribers Active Subscribers (2011, March) (December 2010) (Dec 2009) Grameen Phone Ltd. (GP) 31.982 29.970 23.26 Orascom Telecom Bangladesh 13.87 20.126 19.327 Limited (Banglalink) Robi Axiata Limited (Robi) 13.259 12.368 9.29 Airtel Bangladesh Limited (Airtel) 4.607 3.956 2.99 Pacific Bangladesh Telecom Limited 1.95 1.787 1.811 (Citycell) Teletalk Bangladesh Ltd. (Teletalk) 1.198 1.211 1.07 Total 72.959 68.643 52.43 Source: http://www.btrc.gov.bd The number of active subscribers as on March 2011 can be seen at a glance in the following table and graph: Name of Operators Active Subscribers (2011, March), Million Market Share (%) GP 31.982 44 BL 20.126 28 Robi 13.259 18 Airtel 4.607 6 City Cell 1.787 2 Tele Talk 1.198 2 Total 72.963 100 Active S ub scribers (2011, March ) 2% 2% 6% 18% GP 44% BL Robi A irt el City Cell Tele Talk 28% Table and Figure 1: Market share analysis of telecommunication sector in Bangladesh ** This figure in March 2011(BTRC) 2.1.1 Forecasted Straight-line trend of Subscriber (Using Least square Time Series Analysis): The following calculation present the total number of actual and forecasted subscribers of different mobile phone company of Bangladesh for last five years: 18
  • 4. New Media and Mass Communication www.iiste.org ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online) Vol 4, 2012 Year Subscriber (x) xy X2 Ye = a + bx In million (y) 2007 34.37 -2 -68.74 4 34.37 2008 44.64 -1 -44.64 1 44.49 2009 52.43 0 0 0 54.61 2010 68.643 1 68.643 1 64.73 2011 72.959 2 145.92 4 74.85 N=5 ∑y=273.042 ∑x=0 ∑xy=101.183 ∑x2=10 ∑ye=273.05 a= ∑ y = 273.042 = 54.61 , b= ∑ xy = 101.183 = 10.12 N 5 ∑x 2 10 SL Year Expected Subscriber( in millions): ye = a + bx Here, a = 54.61 1 2007 54.61 + 10.12 × (-2) = 34.37 b = 10.12 2 2010 54.61 + 10.12 × (-1) = 44.49 x = -2,-1,4,7,10 3 2013 54.61 + 10.12 × 4 = 95.09 4 2016 54.61 + 10.12 × 7 = 125.45 5 2019 54.61 + 10.12 × 10 = 155.81 **The above subscribers' numbers are declared by the mobile operators 2.2 Investment perspective of telecom in Bangladesh: Mobile phone sector is the top sector for foreign investment and source of government revenues. Enormous investment is made as well as government earns huge revenues from this sector. The position of Bangladesh in attracting the foreign investment is not in satisfactory level. But Bangladesh is one of the top ten countries in the world for investment in this sector. From 1997 to June 2008 total investment in this sector is Tk. 229.56 billion. The scenario is as follows- The actual and forecasted investment in the telecom sector of Bangladesh has got the following picture for the last few years: Year Actual Investment Deviation from xy X2 Ye = a + bx In Crore (y) 2002 (x) Forecasted 1997 (1) 259.3 -5 -1296.5 25 -1347.641 1998 (2) 112.1 -4 -448.4 16 -712.8528 1999 (3) 181.3 -3 -543.9 9 -78.0646 2000 (4) 235.1 -2 -470.2 4 556.7236 2001 (5) 413.1 -1 -412.1 1 1191.5118 2002 (6) 395.1 0 0 0 1826.3 2003 (7) 533.3 1 533.3 1 2461.0882 2004 (8) 1583.3 2 3166.6 4 3095.8764 2005 (9) 4397.9 3 13193.7 9 3730.6646 2006 (10) 3788.8 4 15155.2 16 4365.4528 2007 (11) 81.90 5 40950 25 5000.241 N=11 ∑y=20089.3 ∑x=0 ∑xy=69826.7 ∑x2=110 ∑ye=20096.35 Here, ye = a + bx; a= ∑ y = 20089 .3 = 1826.3 , b= ∑ xy = 69826.7 = 634.7882 N 11 ∑x 2 110 19
  • 5. New Media and Mass Communication www.iiste.org ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online) Vol 4, 2012 Trend Analysis of Investemnt 10000 8000 6000 Investment Series1 4000 Series2 2000 0 1 2 3 4 5 6 7 8 9 10 11 -2000 Ye a r • Series 1 indicates the Actual investment where as series 2 is forecasted investment • Using Least square Time Series Analysis Table and Figure 3: Trend Analysis of actual and forecasted investment SL Year Expected Investment ( in crore): ye = a + bx Here, 1 1997 1826.3 + 634.7882 × (-5) = -1347.641 a = 1826.3 2 2000 1826.3 + 634.7882 × (-2) = 556.7236 b = 634.7882 3 2003 1826.3 + 634.7882 × 1 = 2461.0882 x = -5, -2, 1, 4, 4 2006 1826.3 + 634.7882 × 4 = 4365.4528 7, 10, 13, 16, 19, 5 2009 1826.3 + 634.7882 × 7 = 6269.821 ---- 6 2012 1826.3 + 634.7882 × 10 = 8174.182 7 2015 1826.3 + 634.7882 × 13 =10078.545 8 2018 1826.3 + 634.7882 × 16 = 11982.911 9 2021 1826.3 + 634.7882 × 19 = 13887.311 From the above table and graph we can see the actual and projected investment of different telecom company for the last few years. It indicates the actual investment cross the estimated investment after fourth year of their operations. Actually it was out of our imagination that we will have any investment in this sector in the year of 1997-2000 that’s why it indicates the estimated investment is negative. By using the least square time series analysis we just estimated some year ahead up to 2021 to assess what will happen to achieve the Government vision 2021. 2.3 Government’s Revenues from Telecom Sector of Bangladesh: The contribution of Telecom sector in country’s total GDP is around 1.46%. The major portion of the contribution comes from mobile phone sector. Revenue is also increasing every year from this sector. Again this sector is contributing about 10% of the total revenues. The actual and the forecasted revenues from the telecom sector of Bangladesh can be shown in the following table: 20
  • 6. New Media and Mass Communication www.iiste.org ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online) Vol 4, 2012 Revenue forecasting: Straight line trend (Using Least Square Time Series Analysis) Year Actual Revenue (y) (x) xy X2 Forecasted: Ye = a + bx 1997 62 -5 -310 25 -884 1998 53 -4 -212 16 -425.018 1999 109 -3 -327 9 33.964 2000 288 -2 576 4 492.95 2001 447 -1 -447 1 951.93 2002 707 0 0 0 1410.91 2003 951 1 951 1 1869.892 2004 1846 2 3692 4 2328.874 2005 2174 3 6522 9 2787.856 2006 3250 4 13000 16 3246.838 2007 5639 5 28195 25 3705.82 N=11 ∑y=15520 ∑xy=50488 ∑x2=110 ∑ye=155200.16 Ye = a + bx, a= ∑ y = 1410.91, b= ∑ xy = (50488÷110) = 458.982 N ∑x 2 Trend Analysis of Revenues 10000 8000 6000 R even ue Forecasted Trend 4000 Actual Trend 2000 0 1 2 3 4 5 6 7 8 9 10 11 -2000 Year Table and Figure: Trend Analysis of actual and forecasted Revenues. Expected (forecasted) Revenues from Telecom Sector of Bangladesh: SL Year Expected Revenues ( in crore): ye = a + bx 1 1997 1410.91 + 458.982 × (-5) = - 884 Here, 2 2000 1410.91 + 458.982 × (-2) = 492.95 a = 1410.91 3 2003 1410.91 + 458.982 × 1 = 1869.892 b = 458.982 4 2006 1410.91 + 458.982 × 4 = 3246.838 x = -5, -2, 1, 4, 5 2009 1410.91 + 458.982 × 7 = 4623.784 7, 10, 13, 16, 19, 6 2012 1410.91 + 458.982 × 10 = 6000.73 ---- 7 2015 1410.91 + 458.982 × 13 = 7377.676 8 2018 1410.91 + 458.982 × 16 = 8754.622 9 2021 1410.91 + 458.982 ×19 = 10131.568 21
  • 7. New Media and Mass Communication www.iiste.org ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online) Vol 4, 2012 The above table, calculation and graph presents the actual revenues what Bangladesh Government has got form the telecom sector and what were the expectation for last few years. It also indicates the actual revenues were less than the forecasted revenue. By using least square time series analysis we also tried to forecast what will be the Government’s revenue in the year of 2021 when the Government want to achieve their vision 2021. 3.0 Problems and Prospects of Telecom Sector of Bangladesh: Actually problems and prospects of any business sector is related to its strengths, weaknesses, opportunities, threats (SWOT) and also political, economical, socio-cultural and technological (PEST) issues of any country as well as the organization. Though telecommunication sector of our country face a lots of problems, it’s also a prospective field till now. 3.1 Problems of Telecom Sector of Bangladesh: a) High Competition: High competition in mobile or telecom sector in our country is one of the main problems. If we have a look in the primary stage of our telecom sector, we had only city cell and Grameen phone and they were operating their business in own way. They took the first mover advantages but when Banglalink, Robi, Teletalk, Airtel come to compete in the market then the market became more competitive and still there exist a high competition in this sector. So to face this competition/ challenge some of the operators are thinking to merge their business to survive in the market b) Poor Economic Background: As a least developed or developing country Bangladesh has a poor economic background where a major portion of our people are living under the poverty line. So it is difficult to operate such type of business in Bangladesh with making a remarkable profit. By considering this economic background, the telecom sector is to fixed the call rate, should reduce tax on SIM and sacrifice more to operate their business. c) Instable Political Situation: Our previous history tells that Bangladesh is not a politically stable country. Different types of political violence, pressure of army, corruption and many more problems make our country instable and also has made this sector insecure. If we have a look last few year our democracy had face many ups and downs, as we don’t have any foreign direct investment (FDI) in any of the sector. d) High Rate of Corporate Tax: As the economic condition is not good of Bangladesh, the telecommunication sector is not able to make profit. Moreover they are to pay high corporate tax which is 40%-45%. It is another major problem or challenge to operate challenging day by day e) SIM Tax: In Bangladesh the mobile operator is to pay Tk. 800-1200 as tax in each SIM from fiscal year 2005-06. Firstly it was Tk 1200 and later on by considering different facts it is fixed as tk 800. Though tax is to paid by the subscribers directly but the company give incentive to continue the sell the SIM at a lower price in the competitive market to hold their position. But now it become impossible for their all the company to carry on this burden. As the growth rate of the subscriber has been declined, the companies are in challenging position. f) Import Tax: In case of technological perspective, Bangladesh is not good enough. So mobile phone operators is to transfer or import technologies, hand sets and other equipments related to the telecommunication and for this they are to pay 35% import tax on it. It is also a great problem for this sector to make profit and survive in the market. 3.2 The Telecom market of Bangladesh & Michel Porter’s 5 forces: In Bangladesh telecom industry, there are already 6 giant companies trying to find their niche. It has been clearly noticed that as the market is growing, proportionately all the companies are getting new subscribers depending their nation wise coverage. So, it is assumed that if even the bargaining power of customer seem to be high due to high growth rate of market each company is some how getting benefited. Bargaining power of supplier is low as there are lot of telecom supplier is available. The presence of six competitors makes high competition. Supplier power is low as there is available telecom supplier. The presence of 6 competitors in the market makes high availability of substitute & competition as entry barrier is also low because of their high investment & easy entry policy. The following way we can present the summary of the porter’s five forces compare with the telecom industry in Bangladesh: 22
  • 8. New Media and Mass Communication www.iiste.org ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online) Vol 4, 2012 Market forces Challenges Entry barrier Low Competitive Rivalry High Threat of Substitute product Moderate Power of buyer High Power of supplier Low We can also present the Michel Porte’s five forces model in relation with our telecom industry like as follows- New Market Entrants, eg: • entry ease/barriers • geographical factors • incumbents resistance • new entrant strategy • routes to market Buyer Power, eg: Supplier Power, eg: • buyer choice • brand Competitive Rivalry, eg: • buyers reputation - Number and size of size/number • geographical firms • change coverage - Industry size and cost/frequency • product/servi trends • product/service ce level - fixed v variable cost importance quality bases • volumes, JIT • relationships - Product/service scheduling with ranges customers - Differentiation, strategy Product and Technology Development, eg: • alternatives price/quality • market distribution changes • fashion and trends • legislative effects Figure: Michel Porter’s Five Forces Analysis Source: Cahrles W. Hill, Book: International Business, Page 159, Fourth edition. 3.3 Prospects (Growth) of Telecom Sector of Bangladesh: Though there are lots of problem exists in the telecom sector of Bangladesh; it is also a prospective sector both for the investors as well as the Government. Till now it has a potential market as more than two third of the population are out of this services. Let’s have a look on the rate for the last few years. The Growth Rate of Subscribers in 2004 was 117.57%, in 2005 123.31%, in 2006 124.44% and in 2007 it was 65.25%.but the worst situation is in 2008.in first quarter the growth rate was 13.27%, in second quarter it was 13.25%, in third quarter 3.18% and in last quarter of the year there was no growth rate rather it was 23
  • 9. New Media and Mass Communication www.iiste.org ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online) Vol 4, 2012 downward. The scenario of progress indicates that such type of growth rate can be maintained within next 10-15 years Bangladesh will be a tele- density country. Previously it was that mobile phone users will increase by 10% every 100 people when government establishes telecommunication principle. At that time mobile phone user was less than 1/100 people which was .04. By analyzing the current growth rate of mobile phone of BTRC, it could be tell that by 2011, total number mobile phone will be increase at above 5.5 crore and tele-density will be more than triple than expectation which is 34/100 people. The obvious reason is only the mobile company and the users. The operators expect that Bangladesh has potential to reach more than a 55% penetration rate in the next 5 years if Government relaxes tax policy. 4.0 Role of Telecommunication Sector to Bangladesh Economy: In Bangladesh the largest structure of privatization become possible due to the investment of different telecommunication companies. The FDI in this sector till September 2008 was Tk. 30 thousand crore. Due to the global recession it may slightly decrease in the financial year2009-10. According to a report of world famous Auditing Institution Deloitto, “In developing country, if using of mobile phone increase by 10%, government revenue will increase by 1.2% in a year.” Moreover it plays a significance role to develop the economic condition of Bangladesh. 4.1 Job Creation and Reduced Unemployment: To reduce unemployment problem telecom industry plays a vital role by creating employment opportunities in Bangladesh. A study show, till 2008 6 lakh 75 thousand people of our country are directly or indirectly involve in this sector for job and among them 15% are women. So it also can say this sector also help to empower the women in our country. 4.2 Sources of Government Income and Revenue: It is one of the largest sectors for government to get revenue. The contribution of telecom sector in our country’s total GDP is around 1.46% and the major portion of this contribution comes from the mobile phone companies. Till September 2008 the contribution of this sector to our economy was tk 20 thousands crore which was about 8% of the total revenues. 4.3 Listed in Stock Market in Bangladesh: Though telecom started its business in private sector but currently phone has been listed in stock market and offered shares to the public about tk 486 crore which is a good sign of this sector. This will also help to operate their business and increase public image to the mass people in our country. Shareholders of Grameen phone became profitable which can also help our economy. 4.4 Dramatic Changes in Communication System: Cellular phone has brought a dramatic change in the communication system in our society. Life has become fast, easy and comfortable in terms of business and society. By using this device we can connect with all over the world within short period of time and also can share information and sophisticated technology. 4.5: Develop Corporate Culture and Make more Competitive: Telecom sector specially phone company is the pioneer to establish the corporate culture in Bangladesh. Now a day, most of the private organization as well as some public organization are practicing this culture which make the market more competitive and the employee, people and government can be benefited from this cultural environment. 4.6 CSR and Telecommunication: The telecommunication section also plays important role by contributing to health, education, environment sports and all other social sector as corporate social responsibility (CSR).it is contributing to cancer hospital, scholarship for the students and arranging different types of training programs for human development. It also contribute to the beautification of our different cities, provide relief in different area, health line and service, make people aware to the environment and doing different types of social works. This sector acts as a member of society. 5.0: Conclusion and Recommendation: From the above discussion it can be said that the Bangladesh telecom market has lot of potential to offer considering strategically ignorable or somehow alterable threats. The market seems to be very potential & prospective. Lots of opportunities are waiting. Bangladesh has cheap labor Communication infrastructure is in good condition. Customer demand for telecom product is also high. Govt. policies are also becoming liberal. Though telecommunication sector plays a vital role in our economy by creating job, generating revenues and contributing different type of social programs but our tax system and market structure makes it a non-profitable sector. So it is essential to establish an ICT industry immediately to get continuous support from this sector. To expand this sector we need to ensure a friendly environment and monitoring and control system which will take 24
  • 10. New Media and Mass Communication www.iiste.org ISSN 2224-3267 (Paper) ISSN 2224-3275 (Online) Vol 4, 2012 care and give suggestions to solve the problems of this sector. More over the aims and objectives of national telecom policy (NTP)/1998 and Bangladesh telecommunication act (BTA)/2001 must have to apply properly to ensure the friendly environment and solve the existing problem of this sector. Besides this the Government should reconsider their tax policy. One study shows, if the tax on SIM and imported equipments is totally reduced, the subscribers will increased 9.5 crore and business will increase form 30% to 56%. As result government can earn additional tk 50 billionSo our government should think and reconsider the tax policy which also can help to ensure their election commitment/ agenda of “Digital Bangladesh by 2021” References: Ahmed Jashim, Akhter Afsana & Dilshad Segufta (2007), “The Impact of Information Source on SIM Purchase Behavior” D.U Journal of Marketing, Vol 10 Anand Nitin & Mukharjee, “A study on telecom market” Cooper R.D & Schindler, P.S (2003). Business Research Methods. McGraw-Hill.International Edition. Islam Ifti, “A study on Bangladesh telecom sector” M Abul Eusuf, Mokammel Karim Toufique. -“Trade development & Poverty linkage: A case study of cellular phone in Bangladesh” Malakar Bipul, Khan Morshed, Ahmed Sabbir & Chowdhury Nusrat, “Factors Affecting clints buying behavior towards mobile phone operator” http://en.wikipedia.org/wiki/Airtel_Bangla http://en.wikipedia.org/wiki/Citycell http://en.wikipedia.org/wiki/Grameenphone) http://en.wikipedia.org/wiki/Robi)[1] http://en.wikipedia.org/wiki/Teletalk http://www.btrc.gov.bd/ http://en.wikipedia.org/wiki/Banglalink) “The Daily Prothom Alo” 11th May, 2009, P. 14 “The Daily Samokal”17th May, 2009, P. 10-14 (Special Supplement of World Telecommunication and Society Day-2009) 25
  • 11. This academic article was published by The International Institute for Science, Technology and Education (IISTE). The IISTE is a pioneer in the Open Access Publishing service based in the U.S. and Europe. The aim of the institute is Accelerating Global Knowledge Sharing. More information about the publisher can be found in the IISTE’s homepage: http://www.iiste.org The IISTE is currently hosting more than 30 peer-reviewed academic journals and collaborating with academic institutions around the world. Prospective authors of IISTE journals can find the submission instruction on the following page: http://www.iiste.org/Journals/ The IISTE editorial team promises to the review and publish all the qualified submissions in a fast manner. All the journals articles are available online to the readers all over the world without financial, legal, or technical barriers other than those inseparable from gaining access to the internet itself. Printed version of the journals is also available upon request of readers and authors. IISTE Knowledge Sharing Partners EBSCO, Index Copernicus, Ulrich's Periodicals Directory, JournalTOCS, PKP Open Archives Harvester, Bielefeld Academic Search Engine, Elektronische Zeitschriftenbibliothek EZB, Open J-Gate, OCLC WorldCat, Universe Digtial Library , NewJour, Google Scholar