Fdi Situation of Telecommunication Sector in Bangladdesh

Topics: Mobile phone, Mobile network operator, Investment Pages: 7 (2363 words) Published: October 19, 2012
Current DFI situation of Telecommunication Sector in Bangladesh The almost remarkable growth in the Telecoms sector in Bangladesh in the last 5-10 years has had the same transformative impact on Bangladesh's economy as the growth of Ready Made Garments and Remittances. As well as being the largest contributor to Foreign Direct Investment and tax revenues, the effect of rapid mobile entrance on increasing the quality of life of ten millions people has been significant. As of September 2010, the BTRC has reported that there are 65.14 million mobile subscribers in Bangladesh and the competition in this sector is increasing rapidly. Many foreign investors are now interested to do business in telecom sector in Bangladesh which reveals that Bangladesh has become a significant hub for telecoms. It has been forecasted that the average revenue from telecoms sector will be Tk1500crore a year. Bangladesh is a country which is densely populated and also is a flat and easily extends able coverage. The infrastructure and Tele-density is low which on the other hand made the market a perfect place for telecom business. According to the World Investment Report (WIR), increased reinvestment and intra-company loans offered by existing foreign companies, including those in telecom, energy and financial sectorshelped boost the FDI flow to Bangladesh in 2011. Bangladesh secured 15th position in the WIR ranking in 2010 with the country receiving $ 910.33 million, while the ranking was 24th in 2008. The report said the annual growth in FDI was 24.42 percent, which was just higher than the 23 percent worldwide growth, on an average, in 2011. It was the second time the country's foreign direct investment crossed the $1.0 billion mark and it was possible due to different policy supports provided by the present government. The FDI flow would increase further if the government followed a more stable tax policy. According to the report, the garment sector attracted the highest $271 million last year followed by the banking sector with $249.3 million and energy sector with $238.2 million. The telecommunications sector got only $18.09 million However, Bangladesh still lags a majority of other countries in the region in terms of mobile penetration. The potential to cross 100 million subscribers by 2013 is not unrealistic, particularly if the relatively high level of taxation on SIMs is reduced by the Government. The telecommunication sector was until early 1989 the sole monopoly of the public sector corporation known as Bangladesh Telegraph and Telephone Board (BTTB). It was the only provider of telecommunication network services in the country. However, in 1989 the government for the first time issued a license to a private operator for provision of cellular, paging and radio tracking services with exclusivity for five years. While it is true that the Public Switched Telephone Network (PSTN) market has been dominated by BTTB and there has been no significant competition in the fixed-line access market, the cellular market has recently featured more competitive elements than in the past. The major companies that are now involved in the telecommunication sector of Bangladesh are BTTB, Teletalk, Robi, Grameenphone, Citycell, Airtel, Banglalink, Dhakaphone and Worldtel. Currently there are 6 mobile operators in Bangladesh. They are namely- * Grameenphone – Joint venture ownership 62%Telenor and 38%Grameen Telecom . * Banglalink – Joint venture with Orascom Telecom Co. originated from Egypt. * Robi – Axiata Group Berhad 70%, NTT Docomo 30%

* Bharti Airtel – Airtel 70%, Warid Telecom 30%
* TeleTalk – Public limited company but 100% share have been owned by the government of Bangladesh. * Citycell – Joint venture with SingTel Asia pacific investment Pvt. limited. .
Grameenphone is a GSM (global system of mobile communication)-based cellular operator in Bangladesh. It has started operations on March 26, 1997. It is...
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