Load-shedding, higher cost of SIM retard cellphone growth

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Naim-Ul-Karim
The operating costs of the country's mobile phone companies have surged by at least 30-35 per cent in recent months primarily due to frequent power disruption that caused the growth of the sector to dip, industry insiders said Saturday.
They said the SIM tax worth Tk 800 for every new connection combined with high corporate and import taxes have also contributed to the rise in the cost of doing businesses in mobile phones.
The Association of the Mobile Telecom Operators (AMTO) in Bangladesh said cost of doing business increased to a large extent as over 20,000 Base Transreceiver Stations (BTS) located across the country are being compelled to use alternative source power supply to maintain their uninterrupted operations during load-shedding.
"Cost of doing businesses of the cell phone operators increased on an average by 30-35 per cent due mainly to the deplorable power situation and one-time SIM tax," secretary general of the association Khalid Hasan told the FE on Saturday.
He further said: "We get power supply for around eight to ten hours a day. So, we need diesel or battery operated back-up support to keep the BTS active during the remaining period."
Mr. Hasan, also a director of the country's leading mobile company Grameenphone, said a sharp rise in cost of doing businesses has already cast a negative impact on the industry that recorded high growth in the past years.
The monthly growth of the cell phone companies dropped in August for the first time, he said, adding the number of new subscribers in August compared to the previous month July was down by half a million.
According to Bangladesh Telecommunication Regulatory Commission (BTRC), six cell phone operators managed to add 600,000 customers in August against 1.1 million in July this year.
The operators warned the growth would stagnate this year, if they cannot woo more subscribers offering lucrative packages in the largely untapped rural areas, where more than 70 per cent of the country's nearly 150 million people live.
They said future growth will depend on the rural areas, as there are now lesser rooms for growth in the urban areas.
As cost of doing businesses increased, they said, mobile phone operators have reduced subsidy on SIM cards, putting their plan to connect people in rural areas at risk.
The top three operators Garmeenphone, Banglalink and AKTEL have hiked pre-paid SIM card prices to Tk 400 and post-paid SIM card prices to Tk 1,000 from the average sales price of Tk 150 two months ago.
Apart from the SIM tax, a spokesman of a leading mobile phone operator said, a cell phone operator also pays 45 per cent corporate tax and indirectly pays Tk 300 duty for every imported mobile phone set.
"Even a minimal cut in these taxes would make the connections cheaper, enabling the millions of rural people to have a chance to own a mobile phone for the first time," said Soliman Alam, a director of Banglalink said.