Introduction to Telecom Business & Management (ETE 521 L2)
ETE 521: TelecommunicationBusiness and ManagementModule 1: IntroductionFaculty: Dr. M. Rokonuzzamanzaman.firstname.lastname@example.orgReference book: Management of telecommunications,H.H. Carr and C.A. Snyder
What is the Focus? Technology? Generic Business? Management? What are the challenges ofmanaging telecom business? Why should it be taughtseparately? etc
What are Major Players? Component Manufacturers Network operators Solution providers End users Regulators etc How does each of them influencethe landscape oftelecommunication business?
Structure of BD’sTelecommunication Sector? BTTB Private PSTN Mobile Data communication Overview of the dynamics ofthe sector? What are major forcesshaping the industry?
Forthcoming Reshaping of BD’sTelecom Sector: Merger? Acquisition? Entry of new operators? Integration of data and voice service Integration of PSTN operators withmobile operators? Future of BTTB? etc
A Quick history of Telecom The telegraph and Morse code, 1837 The telephone Handcrank, 1900 Rotary dial candlestick, 1919 Rotary dial handset, 1937 Cellular radioAMPS, 800 Mhz (advanced mobile phone service), 1983 GSM (Global system for mobile communications) CDMA
• Before 1972:T&T department to enjoy theexclusive authority torun and regulate thetelecom serviceindustry.• Feb 1979: Change ofthe Govt. T&T Deptt.into a Govt. Board(BTTB) through anOrdinance in 1979.July 1989: First entry of privatesector in telecombusiness through anagreement of BTTBwith:(a) BTL for cellular Mobile,Radio trunking, Radiopaging and Riverinecomm. services.(b) BRTA for digitaltelephone service in 200Thanas.• Aug 1994: Agreement madeby BTTB with ISL forproviding digital telephoneservice in remaining 195Thanas.• 1995: Take over of theregulatory functions ofTelecom sector by MoPTfrom BTTB.• 1995: Transfer of cellularmobile portion of license ofBTL to PBTL.• Nov 1996: Licenseagreement by MoPT with 3private mobile companies:GP, TMIB, Sheba• March 1998: Declaration(publication) of NationalTelecom Policy 1998• 2000: License agreementwith WorldTel by MoPT forproviding telephone servicein Dhaka city.• Jan 2002: Formation ofBTRC to take over theregulatory functions fromMoPT as per Telecom Act2001.• 2004/2005: PSTN licensingopened by issuing openlicenses to 15 privatecompanies for giving fixedtelephone service.• Dec 2005: Cellular mobilelicense issued to a foreigncompany: Warid Telecom.• Sep 2007: ILDTS Policy2007Before 1972 -1980 1981 -1990 1991 -1999 2000 – 2007Key Milestones for Development of Telecommunication Sector in Bangladesh
• 1947: Manualtelephone service,Morse telegraphservice, LD networkthrough open wireline.• 1949: International &inter wingcommunicationthrough HF radiosystem.• 1952: Teleprinterservice.• 1954: First FI typeauto exchange atDhaka.• 1962: VHF Radiosystem in the LDnetwork betweenDhaka-Ctg route.• 1969: First EMD typeauto exchange atDhaka• 1970: Microwaveradio system in theLD network betweenDhaka-Chittagong• 1975: Internationalcommunication bySatellite systemthrough earthstation at Betbunia• 1978: National Telexnetwork with Telexexchanges at Dhaka,Ctg & Khulna• 1985: National dialingsystem withinstallation of trunkauto exchange atDhaka, Chittagong,Khulna & Bogra• 1986: Overseascommunication throughInternational trunkexchange (ITX) at Dhaka• 1990: First digitalexchange at six places inDhaka multi-exchangearea• 1991: Digital exchanges infew Thanas by a privateoperator BRTA• 1993: First cellular Mobileservice in private by HBTL(from BTL), in 1993 withAmps system and withCDMA (2G) by PBTL in1999.• 1996: Internet serviceopened by some privateservice providers usingVSAT for Internationalconnectivity. BTTBstarted the service from1999.• 1997: Cellular mobileservice GSM systemopened by privateoperator GP, followed byTMIB & Sheba.• 1998: Optical fiber lines(leased from BR) all overBangladesh in the LDnetwork by GP. BTTBlaid optical fiber linesbetween Dhk-Ctg in2000.• 2000: WLL system inlocal telephone servicein some district & Thanatowns by BTTB. Anumber of private PSTNoperators started theirmain service with WLL in2005.• 2006: Internationalconnectivity in the globalcommunication highwaythrough SEA-ME-WE4submarine cable byBTTB.1947-1965 1966-1985 1985-1995 1996-2007Evolution of Technical Systems and Services inBangladesh Telecommunication Sector
Sheba Telecom Ltd(Banglalink)• Cellular mobile license received on 11 November 1996 with 49% share by alocal Co. ISL (Integrated Service Ltd), 51% share by a Malaysian Compnay,TRI (Technology Resources Industries).• All shares (100%) purchased by ‘Orascom’ of Egypt in Sept. 04 within thesame license, taking the brand name of Banglalink.Pacific Bangladesh Telecom Ltd(City Cell)• Original Cellular Mobile service license along with other 3 services receivedby BTL (Bangladesh Telecom Ltd) through an agreement with BTTB in August1989.• Cellular Mobile portion of the license later transferred to a company HBTL(Hutchison Bangladesh Telecom Ltd.)• Entire share (100%) of Mobile operation purchased by PBTL in 1994.• 45% of total share purchased by ‘Singtel’ of Singapore in 2005, with option for15% more to be transferred subsequently.Grameen Phones Ltd(GrameenPhone)• Cellular mobile license received on 11 November 1996 with 49% share byTeleNor of Norway, 41% share by Grameen Telecom, 5% share byGonophone of USA, 5% share by Marubeni of Japan.• After about 6 years, Gonophone and Marubeni sold their shares and share ofTeleNor rose to 62% and Grameen Telecom share reduced to 38%.TM International Bangladesh Ltd (Aktel) • Cellular mobile license received on 11 Novmber 1996 with 60% share by TMI(Telecom Malaysia International), 40% share by A.K.Khan & Co. ofBangldesh.• After about 3 years, share of TMI rose to 70% and rest 30% remain withA.K.Khan & Co.History of Ownership Transformation in the Mobile Sector
OperatorCategoryOper-atorsOperators’ Names License Time LicenseAreaStatus oflicenseStart ofoperationManagementStructureOwnershipTypePSTN, NLD,IGW, Telex1 BTTB Before1947Country Valid Before 1947 Board Govt.PSTN 17 Bashundhara Com. 13.05.04 NE,SE,NW,SW Cancelled NA Limited Co PrivateRanks Telecom 07.06.04 NE,SE,NW,SW Valid July, 05 Do DoBangla Phone 22.06.04 NE Valid NA Do DoJalalabad Telecom 22.06.04 NE Valid Jan. 06 Do DoWestec (Bay Phone) 08.07.04 SE Valid April 05 Do DoTele Barta 09.08.04 NE,SE,NW,SW Valid July 05 Do DoDominox Tech. 09.08.04 SE Cancelled NA Do DoGEP Telecom 09.08.04 NE,SE Valid NA Do DoOne Tel Com. 02.09.04 NE Valid Sep’05 Do DoDhaka Telephone Co 09.10.04 NE,SE,NW,SW Valid Nov’06 Do DoSquare Informatix 13.01.05 NE,SE,NW,SW Valid NA Do DoNational Telecom 17.01.05 NE,SE,NW,SW Valid Jan 06 Do DoPeoples Telecom 25.01.05 NE,SE,NW,SW Valid Jan 06 Do DoS.A. Telecom 27.03.05 SE Valid July 06 Do DoNextel Telecom 13.04.05 SE Valid NA Do DoISL 19.08.94 SE, SW Valid NA Do DoWorldTel 20.08.01 Central Valid NA Do ForeignMobile 6 Teletalk BD Ltd. 01.09.04 Country Valid 30.03.05 Do PublicGrameen Phone Ltd 11.11.96 Country Valid 26.03.97 Do Local+ForeignTMIB (Aktel) 11.11.96 Country Valid 11.08.97 Do Local+ForeignPBTL (City Cell) 26.07.89 Country Valid 10.08.93 Do Local+ForeignSheba (Bangla Link) 11.11.96 Country Valid 03.09.98 Do ForeignWarid Telecom 20.12.05 Country Valid 01.04.07 Do ForeignSource: BTRC: Telecommunication Operators in Bangladesh
What is the role of management study withinthe context of technology? Finding and nurturing opportunity of developing businessmaking use of emerging technology? Example? Analysis of application of location-based servicesPushadvertisingPulladvertisingTracking EmergencyservicesBilling Social/EntertainmentBusinessmodelStrength ofvaluepropositionIncrementalprofitabilityMarket size
Role of Regulator: Why has BTRC put floor on call rate? What is its implication on competition? Why should operators be restrained fromlowering rates? Etc. Why should not BTRC allow moreoperators to enter in the mobilemarket?
What is the effect oncompetition if intraoperator mobile chargeis lower than theinterconnectioncharge?
Figure 4.4: Mobile Service Users Growth1.9094.1529.26832.3721.77229.4272003200420052006June.07Jul-07MobileSubscribersinMillions
Figure 4.3: Average Revenue Per User (ARPU) Per Month8476264272802003 2004 2005 2006ARPUinTaka
Voice Traffic Leads theGP’s Service revenue breakdownRevenueGP’s Service Revenue Breakdown: Jan-June 2007Call Charges :Line rentals :SMS & MMS :Inter. Roaming:Internet(EDGE & GPRS) :Interconnection :Others :86.73%0.76%2.30%0.67%0.70%8.40%0.44%Service Consumption Pattern of GPSubscribers
Figure 4.7: Subscriber Growth Rate of Top Five Mobile Operators0501001502002503002004 2005 2006GrowthRateTeletalk BD Grameen Phone Aktel(TMIB)CityCell(PBTL) BanglaLink (Sheba)
Figure 4.10: ARPU/Month of Top Five Mobile Operators02004006008001000120014002003 2004 2005 2006ARPU/MonthTeletalk BDGrameen PhoneAktel(TMIB)CityCell(PBTL)BanglaLink (Sheba)
TeleTalk2.81%Warid3.52%CityCell4.05%BanglaLink20.42%Aktel20.61%GrameenPhone48.59%Market Share of Mobile OperatorsBased on Subscribers in July 2007
Figure 5.4: Subscribers Growth of Private PSTN Operators112,420147,707205,355June 2006 December 2006 June 2007SubscribersinThousand
Where is the future growth opportunity inBD’s telecom service market? Voice Data, what kind of data? Video Audio/Video on demand Data storage and management services. Rural voice market SMS Value added services etc
Competition in BD’s telecomsector: Competition strategy? Implications of practiced competitionstrategy? Do you recommend better strategy tobring sustainable long term benefit? etc