Revenue losses due to cyclone won't be too big: GP CEO
Wednesday, 21 November 2007
FE Report
As mobile telephony titan, GrameenPhone (GP), races ahead with robust revenues, driven by a strong subscriber base, its top executive has insisted that the savage storm that lashed the country's southwest coastal belt last week will not drag down its revenues.
"We're still calculating … But revenue losses will not be too big," Anders Jensen, chief executive officer of GP, said Tuesday in a group interview.
Even though a large number of its base stations located in coastal districts are still being run on back up electricity generators, he said that his company would be able to generate good revenues in the coming months.
GP's network collapsed by half to 100 per cent, due mainly to the power blackout as fallout of the powerful cyclone, Jensen said, adding an estimated 2000 of its 6000-strong base-station sties are running on backup generators.
Keeping the post-disaster devastation in future, the Swedish-born GP executive noted his company is looking into the possibility of using solar energy in its base-stations dotted across the coastal belt, where there exists no national power grid.
Mobile network collapsed in more than 20 districts in Khulna-Barisal region when the SIDR struck the Southwestern coastline, causing immense sufferings for the survivors.
Jensen, who replaced his predecessor in September, noted that the country's biggest cellphone operator is going to float shares sometime next year, offloading up to 10 per cent of its stake in the capital market.
"The listing should take place sometime next year and the shares may be 10 per cent," he told newsmen at his corporate office at Gulshan.
"It will be a large IPO," was his reply to a query.
In a long-interview, Jensen dwelt on a panoply of issues, from the state of telecom market to new technology to market rivalry.
"Too many actors" are wrestling for shares in a competitive market, Jensen said, insisting consolidation in the local cellphone market is required to create more space for growth, although he will not say the optimal number of operators.
"I do believe this market needs consolidation," he said, referring to an 18 per cent market penetration that still left 82 per cent unexploited.
"Six to seven operators-it's not good," the GP's top boss said, adding that the future takeover will hinge on "the willingness of players."
He said they are in "preliminary talks" with other operators to go for consolidation, thus reshaping Bangladesh's mobile telephony landscape where the arrival of new entrants has already unleashed "price war."
Jensen, however, saw the potential consolidation in the country's fastest-growing wireless telephony market as "part of the solution" to the spectrum shortage. "It (acquiring) will not rectify the whole problem."
Rather, redistribution of spectrum by the Bangladesh Telecommunications Regulatory Commission, which oversees the telecom sector, will help the GP grow in a fiercely competitive market, Jensen maintained.
"We need additional airwave spectrum that will galvanise us into putting more money into capacity expansion," he said.
GP faces rising competition as Orascom, the largest wireless operator in the Middle East, and Singapore Telecommunications invested in mobile phone operations to tap demand in Bangladesh.
The GP pumped nearly Tk 67 billion into the country's booming telecom industry between 1997 and 2006, according to figures available with the company.
The company's investments totalled Tk 21.66 billion in 2006, up by Tk 15.66 billion over the year before.
GP insiders say the company is close to spending around $446 million, largely from its own coffers, into its capacity expansion this year.
Unveiling the company's growth plan, Jensen said his priority is to provide cheaper services to customers and faster roll-out.
Also, he stressed that "emerging segments" or rural market, a burgeoning middle-class with considerable spending habit and cutting edge technology will enable the cellphone giant to fight off its rivals.
As mobile telephony titan, GrameenPhone (GP), races ahead with robust revenues, driven by a strong subscriber base, its top executive has insisted that the savage storm that lashed the country's southwest coastal belt last week will not drag down its revenues.
"We're still calculating … But revenue losses will not be too big," Anders Jensen, chief executive officer of GP, said Tuesday in a group interview.
Even though a large number of its base stations located in coastal districts are still being run on back up electricity generators, he said that his company would be able to generate good revenues in the coming months.
GP's network collapsed by half to 100 per cent, due mainly to the power blackout as fallout of the powerful cyclone, Jensen said, adding an estimated 2000 of its 6000-strong base-station sties are running on backup generators.
Keeping the post-disaster devastation in future, the Swedish-born GP executive noted his company is looking into the possibility of using solar energy in its base-stations dotted across the coastal belt, where there exists no national power grid.
Mobile network collapsed in more than 20 districts in Khulna-Barisal region when the SIDR struck the Southwestern coastline, causing immense sufferings for the survivors.
Jensen, who replaced his predecessor in September, noted that the country's biggest cellphone operator is going to float shares sometime next year, offloading up to 10 per cent of its stake in the capital market.
"The listing should take place sometime next year and the shares may be 10 per cent," he told newsmen at his corporate office at Gulshan.
"It will be a large IPO," was his reply to a query.
In a long-interview, Jensen dwelt on a panoply of issues, from the state of telecom market to new technology to market rivalry.
"Too many actors" are wrestling for shares in a competitive market, Jensen said, insisting consolidation in the local cellphone market is required to create more space for growth, although he will not say the optimal number of operators.
"I do believe this market needs consolidation," he said, referring to an 18 per cent market penetration that still left 82 per cent unexploited.
"Six to seven operators-it's not good," the GP's top boss said, adding that the future takeover will hinge on "the willingness of players."
He said they are in "preliminary talks" with other operators to go for consolidation, thus reshaping Bangladesh's mobile telephony landscape where the arrival of new entrants has already unleashed "price war."
Jensen, however, saw the potential consolidation in the country's fastest-growing wireless telephony market as "part of the solution" to the spectrum shortage. "It (acquiring) will not rectify the whole problem."
Rather, redistribution of spectrum by the Bangladesh Telecommunications Regulatory Commission, which oversees the telecom sector, will help the GP grow in a fiercely competitive market, Jensen maintained.
"We need additional airwave spectrum that will galvanise us into putting more money into capacity expansion," he said.
GP faces rising competition as Orascom, the largest wireless operator in the Middle East, and Singapore Telecommunications invested in mobile phone operations to tap demand in Bangladesh.
The GP pumped nearly Tk 67 billion into the country's booming telecom industry between 1997 and 2006, according to figures available with the company.
The company's investments totalled Tk 21.66 billion in 2006, up by Tk 15.66 billion over the year before.
GP insiders say the company is close to spending around $446 million, largely from its own coffers, into its capacity expansion this year.
Unveiling the company's growth plan, Jensen said his priority is to provide cheaper services to customers and faster roll-out.
Also, he stressed that "emerging segments" or rural market, a burgeoning middle-class with considerable spending habit and cutting edge technology will enable the cellphone giant to fight off its rivals.