Sharp falls in investment at telecom sector in 2009
Thursday, 31 December 2009
Khaled Shams
Investments at telecom sector experienced steep down trend in 2009 compare to similar period in 2008. From the published result for top three operators GP, Banglalink and Axiata Bangladesh, in first nine months of 2009 they spent 244 million US dollar compare to 577 million US dollar in same period of 2008, nearly 58% reduction. GP capital expenditure in the sector was 89 million US Dollar, Banglalink made 77 million US Dollar and Axiata Bangladesh made 78 million US dollar against 212, 307 and 58 million respectively in 2008. Other three small operators Warid, Citycell and Teletalk also maintained very low profile investment or no investment in 2009. 4th Quarter that will end today was not different in terms of investment for all operators.
Industry managed to grow and profit in 2009 despite the SIM tax dragging on the growth. Although industry analysts questioned whether the industry would be able to maintain competitive momentum in long run, the top three operators managed to deliver reasonable quarterly numbers.
Bangladesh's mobile operators made revenue nearly 1.25 Billion US dollar in nine months, a 14% growth from 2008. MNOs added 5.76 million new subscribers in first nine months whereas in same period in 2008 they have added 10.72 million subscribers.
Mobile operators need to concentrate to improve quality and capacity enhancement in their network for better customer service and value for money as most of the top operators completed nationwide coverage reasonably well.
Investment in telecom sector will not get momentum unless SIM tax issue is resolved; timing for 3G license is clear and regulator stand for unified licensing scheme in 2011. Current license for GP, Banglalink and Axiata will expire in 2011.
Operators had an opportunity to take a stand together to explain SIM tax burden in the industry but couldn't keep the unity and started fierce completion in quarter three for new subscriber acquisition with substantial subsidy in SIM tax but at a cost of their bottom line result. On the marketing side operators are doing good job in spending money and most of their efforts are still focused voice market and we are yet to notice desired focus to data market where operators need to educate the customers. From overall perspective, they committed the same mistake of offering multiple offers. By doing so, operators only confused customers, making them wonder which operator would suit their needs.
Highlights of first nine months 2009
In first nine months of 2009 six mobile operators added 5.76 million new subs whereas 10.72 million new subs were added in the same period of 2008; Out of 5.76 million, 3.71 million subscribers added only in third quarter of 2009 due to aggressive subsidized subscriber's acquisition by operators.
Six Mobile operators made 1.25 billion US dollar revenue or 86 billion BDT in first nine months and set to make around USD 1.7 billion in 2009. Grameenphone kept their supremacy in terms of revenue, number of subscribers and quality of profit in the sector. GP earned 700 million USD revenue in first nine months of 2009 as compared to 646 million USD in first nine months of 2008; Banglalink made 259.5 million USD as compared to 208 million USD and TMIB made 200 million USD as compared to 155 million USD in same period; Top three operators made additional 150 million USD in first nine month of 2009 as compared to first nine months of 2008.
GP's performance in first nine months as compared to first nine months of 2008 (See Table 1)
Investments at telecom sector experienced steep down trend in 2009 compare to similar period in 2008. From the published result for top three operators GP, Banglalink and Axiata Bangladesh, in first nine months of 2009 they spent 244 million US dollar compare to 577 million US dollar in same period of 2008, nearly 58% reduction. GP capital expenditure in the sector was 89 million US Dollar, Banglalink made 77 million US Dollar and Axiata Bangladesh made 78 million US dollar against 212, 307 and 58 million respectively in 2008. Other three small operators Warid, Citycell and Teletalk also maintained very low profile investment or no investment in 2009. 4th Quarter that will end today was not different in terms of investment for all operators.
Industry managed to grow and profit in 2009 despite the SIM tax dragging on the growth. Although industry analysts questioned whether the industry would be able to maintain competitive momentum in long run, the top three operators managed to deliver reasonable quarterly numbers.
Bangladesh's mobile operators made revenue nearly 1.25 Billion US dollar in nine months, a 14% growth from 2008. MNOs added 5.76 million new subscribers in first nine months whereas in same period in 2008 they have added 10.72 million subscribers.
Mobile operators need to concentrate to improve quality and capacity enhancement in their network for better customer service and value for money as most of the top operators completed nationwide coverage reasonably well.
Investment in telecom sector will not get momentum unless SIM tax issue is resolved; timing for 3G license is clear and regulator stand for unified licensing scheme in 2011. Current license for GP, Banglalink and Axiata will expire in 2011.
Operators had an opportunity to take a stand together to explain SIM tax burden in the industry but couldn't keep the unity and started fierce completion in quarter three for new subscriber acquisition with substantial subsidy in SIM tax but at a cost of their bottom line result. On the marketing side operators are doing good job in spending money and most of their efforts are still focused voice market and we are yet to notice desired focus to data market where operators need to educate the customers. From overall perspective, they committed the same mistake of offering multiple offers. By doing so, operators only confused customers, making them wonder which operator would suit their needs.
Highlights of first nine months 2009
In first nine months of 2009 six mobile operators added 5.76 million new subs whereas 10.72 million new subs were added in the same period of 2008; Out of 5.76 million, 3.71 million subscribers added only in third quarter of 2009 due to aggressive subsidized subscriber's acquisition by operators.
Six Mobile operators made 1.25 billion US dollar revenue or 86 billion BDT in first nine months and set to make around USD 1.7 billion in 2009. Grameenphone kept their supremacy in terms of revenue, number of subscribers and quality of profit in the sector. GP earned 700 million USD revenue in first nine months of 2009 as compared to 646 million USD in first nine months of 2008; Banglalink made 259.5 million USD as compared to 208 million USD and TMIB made 200 million USD as compared to 155 million USD in same period; Top three operators made additional 150 million USD in first nine month of 2009 as compared to first nine months of 2008.
GP's performance in first nine months as compared to first nine months of 2008 (See Table 1)
| GP' Q109 | GP' Q108 | GP' Q209 | GP' Q208 | GP"Q309 | GP" Q308 | ||
| Revenue | BDT (mil BDT) | 16227 | 15211 | 15845 | 14432 | 15510 | 15319 |
| mil USD | 235 | 220 | 230 | 209 | 225 | 222 | |
| Subs | million | 21.05 | 17.81 | 21.16 | 20.31 | 21.95 | 20.83 |
| Capex | BDT (mil BDT) | 2897 | 5712 | 1897 | 5514 | 1383 | 3429 |
| mil USD | 42 | 82.7 | 27 | 80 | 20 | 50 | |
| MOU | minutes/month/sub | 327 | 259 | 301 | 319 | 244 | 236 |
| ARPU | BDT | 250 | 288 | 255 | 257 | 234 | 247 |
| USD | 3.60 | 4.20 | 3.70 | 3.72 | 3.39 | 3.58 | |
| EBITDA | BDT (mil BDT) | 9629 | 7189 | 9371 | 3971 | 8829 | 7457 |
| mil USD | 139.55 | 104.00 | 135.81 | 57.55 | 127.96 | 108.07 | |
| margin | 59% | 47% | 59% | 28% | 57% | 49% |