Bus Assignment Mobile Market

8/3/2019 Bus Assignment Mobile Market

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The market of mobile phone of Bangladesh is a stiff competition market. There

are lots of competitions among the service provider in this sector. And people

have the query to know the current situation in the market. To know the current

situation of the market I collect some raw data, like the amount of subscriber of

different operators, from the Bangladesh Telecommunication Regulatory

Committee (BTRC) website and interpreted them to find out the performance of

the various operators operating in this sector. Some other information is collected

from the official website of the various companies. I use trend analysis and BCG

matrix and other tools to find out performance of the companies using the raw

data. At last by considering my analysis I draw a conclusion


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The telecommunication sector, specially the mobile phone sector, in Bangladesh is one of the

fastest growing business segments of the country which provide a lot of value addition to thesociety with its service and creation of employment opportunities. At present there are six

mobile phone operator in the country with GrameenPhone, Banglalink, Robi (Aktel), Teletalk,

Warid and Citycell. Except the GrameenPhone, none of the operator can make little profit till

now. Now there are lots of questions and queries on the growth, prospects and performance of

these companies, specially the first three GrameenPhone, Banglalink and Robi, like who is

the present best performer, whose future prospects is high etc.

Objective:

The objective of preparing this paper is to measure the performance of the mobile phoneoperators of the country, specially the first three, in terms of

1. Market share.

2. Market growth.

3. Product line; and

4. Investment

And find out the best operator in the market in these terms.

Methodology:

The raw data of the paper are collected from the website of the Bangladesh

Telecommunication Regulatory Committee (BTRC) and some other report of the various

operators website. But the analysis is done by the author himself. The analysis done based on

the process of trend analysis, BCG matrix analysis and etc. As the information is collected from

the secondary sources, actual information may differ from presented information.


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Overview of Mobile Phone Operators of Bangladesh:

Before going to the analysis, I want to give a simple overview on the each of the company,operating in the mobile phone sector in the country. The overviews of the operators are as

follows

GrameenPhone Grameenphone was offered a cellular license in Bangladesh by the Ministry

of Posts and Telecommunications in November 28, 1996. In March 26, 1997 Grameenphone

launched its service on the Independence Day of Bangladesh. Since its inception in March 1997,

Grameenphone has built the largest cellular network in the country with over 10,000 base

stations in more than 5700 locations. Presently, nearly 98 percent of the country's population is

within the coverage area of the Grameenphone network. Grameenphone was also the first

operator to introduce the pre-paid service in September 1999. It established the first 24-hourCall Center, introduced value-added services such as VMS, SMS, fax and data transmission

services, international roaming service, WAP, SMS-based push-pull services, EDGE, personal

ring back tone and many other products and services. (Source Grameenphone website)

Banglalink- When Banglalink entered the Bangladesh telecom industry in February 2005, the

scenario changed overnight with mobile telephony becoming an extremely useful and

affordable communication tool for people across all segments. Within one year of operation,Banglalink became the fastest growing mobile operator of the country with a growth rate of

257%. This milestone was achieved with innovative and attractive products and services

targeting the different market segments; aggressive improvement of network quality and

dedicated customer care; and effective communication that emotionally connected customers

with Banglalink. Banglalink is today the 2nd largest mobile operator in the country and we have

recently celebrated with 1 crore customers. This has been achieved in just three and a half

years. . (Source Banglalink website)


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Robi- Axiata (Bangladesh) Limited is a dynamic and leading countrywide GSM communication

solution provider. It is a joint venture company between Axiata Group Berhad, Malaysia and

NTT DOCOMO INC, Japan. Axiata (Bangladesh) Limited, formerly known as Telekom Malaysia

International (Bangladesh), commenced its operation in 1997 under the brand name Aktel

among the pioneer GSM mobile telecommunications service providers in Bangladesh. Later, on

28th March, 2010 the company started its new journey with the brand name Robi. With itsstrengths and competencies developed over the years, Robi aims to provide the best quality

service experience in terms of coverage and connectivity to its customers all over Bangladesh.

Together with its unique ability to develop local insights, Robi creates distinct services with local

flavor to remain close to the hearts of its customers. . (Source Robi website)

Warid Warid Telecom is a joint venture between Abu Dhabi Group & SingTel Group. Abu

Dhabi Group entered into a strategic alliance with Singapore Telecom. Subsequent to this

transaction in July 2007, telecom giant SingTel acquired 30% percent equity stake in Warid

Telecom, Pakistan, for US$758 million. This partnership is part of a strategy to support Warid

Telecoms continued growth and to enhance its market position. . (Source Warid Telecom

website)

TeletalkTeletalk Bangladesh Limited (the Company) was incorporated on 26 December,

2004 as a public limited company under the Companies Act, 1994 with an authorized capital of

Tk.20,000,000,000 being the only government sponsored mobile telephone company in the

country. On the same day the Company obtained Certificate of Commencement of Business. It

is the only governmental mobile phone operator of the country. . (Source Teletalk website)

Citycell- Citycell (Pacific Bangladesh Telecom Limited) is the first mobile communications

company of Bangladesh. It is the only CDMA network operator in the country. As of 1 March,

2008, Citycell's total mobile subscriber base is 1.56 million, up 137 per cent or 680,000 from

two years ago, giving it the best growth rate of the company till date. Citycell is currently


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owned by Singtel with 45% stake and the rest 55% owned by Pacific Group and Far East

Telecom. By the end of 2007 Citycell had refurbished its old brand identity and introduced a

new logo and corporate identity; the new logo is very reminiscent of the old logo. However the

slogan has remained unchanged "because we care". (Source Wikipedia)

Market Share Analysis:In starting of the analysis of the companies in the telecommunication sector in Bangladesh, first I

would like to analysis the current scenario of the market. The current market share of the various

mobile phone operators are displayed in the following figure, based on the information provided by

the Bangladesh Telecommunication Regulatory Committee (BTRC) website

On the above mentioned figure, we found that the total market of the mobile phone is with 56.36

million subscriber where Grameenphone still dominated the market with 43.56% market share


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which is far higher than its follower Banglalink, with 26.51%, and Robi, with 19.20%. The rest of the

operator are not in competition with these three operators and hold much low market share

compared to them.

But the market share of these companies only in April 30, 2010 is not sufficient enough to judge

them. In order to judge the true performance of the organization we should go for analyzing the

market share trends of these operators. To best judge the performance of the companies in terms

of market share, I choose the data of last 12 months data on the market share of these companies.

The data are presented in graph below

Form that graph we can easily identify that, the al time topper Grameenphone lose some of its

market share to its follower Banglalink throughout these last twelve months. The third highestoperator Robi also gain some market share July, 2009 to October, 2009 but lose the market share at

the end of the year and remain in the same position at the beginning of the year. The change in the

market share of the other operator is so much insignificant that it have no influence in the market.

Thats why in the later part of the paper, sometimes I will skip the last three player of the mobile

phone operator market


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Customer Growth Analysis:To reach the desired conclusion, only market share analysis cannot provide the appropriate

result. To make the result more accurate and viable we should go for some other analysis.

After the market share analysis, anyone can want to know about the total customer around this

time. Before going to the customer gain analysis of different operators, I wish to give some

overall idea about the customer trends in the mobile market of the country. This will give the

base of comparison of the later analysis.

The following figure shows the total active customer of mobile phone throughout the last twelve

months

Fig; Customer base in 12 months


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From the given figure it can easily identifiable that the customer base has increased month to

month. To find out a more clear picture following graph are presented

Fig; Increase in customer in 12 months

So, this graph gives us the clear picture of increase of customer in the mobile phone sector. But

the scenario suggests that the rate of increase is not constant over that time. The main reason

behind that is the SIM tax. Whenever the mobile phone operator companies give subsidies and

make the SIM available at reduced rate the number of subscriber increased at higher rate and

when the subsidies are not given customer are increased at lower rate.


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Now the discussion will be made on more border view of the market growth. Information of last

three years will be considered to find out the total growth rate of the market in these three years.

The following figure shows the growth rate of the market in last three years.

Fig; Market growth in last 3 years

By assuming the May, 2007 as the base year, it is seen that the market has grow almost 57.69%

from May, 2008 to May, 2008, but the market growth fall drastically from May, 2008 to May,

2009 at 10.39% because of imposing a huge tax on SIM. But somehow in the last one year the


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companies give some subsides to make the SIM available at lower price again doubled the

market growth.

Now, to reach the conclusion, the individual performance of the operators will be analyzed based

on the above mentioned market performance. First we will saw the individual market growth of the

three big player of the market in these last three years. The following figure shows the market

growth of Grameenphone, Banglalink, and Robi in the last three years of their operations

Fig: Market growth of the individual company

The figure dictates that in last three years the Banglalink was the leader in gaining of market

share and the big player Grameenphones performance is always lower, even form the Robi, inthese three years. In last two years, performance of the Banglalink is much higher than

performance of Grameenphone.Now this measure has one problem, as the customer base of the Grameenphone is much higher

than the other two operators, Grameenphone should gain huge amount of subscriber compared to

the Banglalink and Robi to gain more market share over them. For instance if Banglalink has 2

subscribers and it gains another 2 new subscribers this year it will be 100% increase but if GP has 10


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subscribers and it gains another 4 new subscribers this year it will only be 40% increase. So it is seen

that customer increase rate is much lower in case of GP compared to Banglalink because of its large

customer base, though it gain more subscriber than Banglalink.

This problem can be resolved through seeing the total customer gain for each individual company

for the last three years. So following figure can give us the opportunity to resolve this problem

Fig: Customer Gain in last 3 years

From this figure it is shown that though in 2008 Banglalink gain almost half amount of customer

compared to the GP, but it perform lot better than the GP in last two years. But Here GP is also far

above than the Robi, which is above GP in the previous figure.


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Product Line:Another way to measure the performance of various organizations is to analyzing their product

line. Because product line is import to retain the customer when the substitute product is very

available and switching from the one product to another is so easy. But in this analysis it plays

an insignificant roll, because

1. All of the mobile phone operator company in Bangladesh has much diversified product line,

except the Teletalk. But the performance of the Teletalk has insignificant roll in our analysis.

2. As the call rate and other services of various operators are comparatively same, people little

go for switching now-a-days.

3. The companies are always trying to develop new product to gain and retain customer.

4. The tariff or the call rate in Bangladesh is already very low, probably the lowest in the world.

5. The competition among the top operators is so high that they launch product in competition.

For above reasons I do not want to describe the product line of the operators.


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Market Position Analysis:The mobile phone market of the Bangladesh are in the maturity stage as there are almost 6

crore subscriber in the market which is the more or less 35% of the total population. But it is

just started this stage and demand of such type of products has less chance to decrease, so it

has long way to go.

To analyze the position of various operators in the market BCG Growth Share can be used. So the

matrix of mobile phone operators of Bangladesh are presented below

Fig: BCG Matrix of Market

The top segment of this matrix is the Star with high market growth and high market share,

where mainly the Banglalink and Robi have. But there is one problem with Robi, it has low

market growth compared to Banglalink and GP. However the Banglalink and Robi required

high amount of investment to retain the growth and turned into cash cow.

The big segment of the matrix is the cash cow, with high market share and low market growth,

where the GP situated. The GP already has a strong customer base and year by year its growth rate


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are going down. But already it produces lot of cash, and it is the only profitable company among the

mobile phone operators in Bangladesh. So it also need high investment to hold its market share.

The rest of the operators are in the dog place, with low market growth and low market share.

They have little chance to achieve large amount of market share. They better need to think

about more product diversification to shift their business.

And none of the operators are in the question mark segment. Because none of the company

posses high market growth with low market share.

Problems of Growth:There are a few obstacles of growth in this market. The problems that have can be described

under two parts

1. External Problems:

a. High amount of tax on SIM card.

b. Strict Governmental rules and regulations.

2. Internal Problem:

a. Less investment in R & D.

b. Less emphasis for the village customers which reduce the chance of grow.


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Conclusion:Based on the analysis it is easily said that Banglalink plays a much greater role in terms of market

performance than the other operators in the last 3 years. It is a great thing of pleasure that

Banglalink reach the second highest position in the market within its third year of operation and its

growth is still now satisfactory. If the Banglalink continue its performance in the future it can one

day reach the GP. But it requires time and heavy investments. In these years though the

performance of the Robi is not so much satisfactory, still it has good opportunity to back in the

performance because it has already a huge customer base and infrastructure. It is still not a subject

to compare Banglalink or Robi with GP. Still the full conclusion cannot be drawn, as the financial

performance of these companies are not measures here. It may require another paper to measure

their financial performance. But an interesting game is on in the mobile phone operators market in

Bangladesh. We can just wait and see for the result.

Reference:

1. Official website of BTRC http://www.btrc.gov.bd

2. Official website of Grameenphone - http://www.grameenphone.com

3. Official website of Robi - http://www.robi.com.bd

4. Official website of Warid - http://www.waridtel.com

5. Official website of Teletalk http://www.teletalk.com.bd

6. Official website of Citycell.

7. Wikipedia

Bus Assignment Mobile Market

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