Bangladesh Telecommunications Report Q2 2014 - New Report Available

In the near- to medium term, the outlook for Bangladesh's telecommunications market offers few bright spots for investors. Although 3G services have been licensed, it may be some time before uptake achieves critical mass and, in meanwhile, there is dissatisfaction among operators with their lot as the state takes a more interventionist role in the market. To add to the troubles, the government appears willing to allow WiMAX operators to migrate to LTE, although they recognise LTE-enabled VoIP services could undermine mobile operators' 3G investments. Mobile operators report further ARPU shrinkage as voice usage dwindles, meaning they will have to work hard to replace that revenue with income from 3G-enabled mobile broadband services. New data show the wireline market is declining faster than previously reported and this impacts on the fixed broadband market. This should mean latent demand for broadband services pushes users towards mobile services, but pricing and device availability will be key to success.

Full Report Details at
- http://www.fastmr.com/prod/775397_bangladesh_telecommunications_report_q2_2014.aspx?afid=302

Key Trends And Developments

The government has permitted WiMAX operators Banglalion and Qubee to switch to LTE technology. This has prompted failed WiMAX licence applicants Ollo and Mango Teleservices to apply for LTE concessions of their own. The potential for these new players to undermine the mobile market cannot be underestimated, although the existing players - with their 3G concessions - have the scale, the financial might and the addressable market to aggressively defend their territory. We foresee numerous legal challenges from both sides of the market, which will do little to foster investor confidence.

We have long been concerned about the inconsistencies in Bangladesh's telecoms regulatory apparatus and the degree of involvement the state enjoys as policy-maker, regulator and incumbent operator, which needs to be balanced alongside its desire to maximise revenue earning potential from the sector and the long-term economic benefits arising from the promotion of information and communications technologies. BMI does not foresee any improvements in the medium- to long term and we therefore expect to see spurious politically-motivated punitive actions taken against industry players every now and then, with Grameenphone most recently targeted on account of its foreign ownership.

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