Bangladesh's mobile market, which grew by 144% last year, is bracing itself for stiffer competition once new entrant UAE-based GSM operator Warid Telecom International enters the market as the sixth mobile operator.
Mobile phone customers will likely benefit as Warid is expected to offer lower prices to lure customers when operations go commercial in October in many regions. An industry source says Warid has little option but to offer attractive priced packages to compete with existing operators and acquire customers.
Warid is investing $800 million into its network and expects to have nationwide coverage by the end of 2007. Warid officials said the country has a huge addressable market to tap into, with a mobile penetration rate of less than 15%. The operator aims to have 2.8 million users in 26 districts by the end of October and an additional 3.1 million customers in 22 other districts by January 2007.
The officials said the operator aims to differentiate itself from the rest of the field by providing premium quality service and has awarded a managed service contract to Ericsson for its GSM/GPRS network.
The main competition will be with the leading operator GrameenPhone and competitive operator Banglalink, which has deployed satellite technology to connect many places as a part of its strategy to deploy the first network. Banglalink has already reduced its tariffs by up to 19% and offers free incoming calls to win new customers.
Bangladesh's cellular industry witnessed its first round of price competition after Egyptian Orascom acquired Sheba Telecom and launched the Banglalink brand. Other operators were compelled to reduce tariffs by 10% to 15%. Banglalink recently passed the two-million subscriber mark with its aggressive pricing strategy and fast network rollout.
Bangladesh's booming mobile phone industry has emerged as a key driver of the cash-strapped nation's economy, creating a total of nearly 240,000 jobs and adding $650 million annually to GDP, a recent study said.
GrameenPhone's sub base jumped by a record 55% or three million subs in the first six months of the year to hit 8.5 million because of its aggressive marketing campaign with new offers. The operator, which is majority owned by Norwegian Telenor, has more than 60% of the country's 16-million-plus mobile phone users. Its network coverage has been extended to nearly 90% of Bangladesh's 140 million population.
The rest of the market is shared by privately-owned AKTel, a subsidiary of Telekom Malaysia, Egypt's Orascom and SingTel-owned Pacific Bangladesh Telecom. The fifth operator is state-owned Teletalk Bangladesh.