New Telecommunication service potentiality in Bangladesh

The liberalization of Bangladesh’s telecommunications sector began with small steps in 1989 with the issuance of a license to a private operator for the provision of inter alia cellular mobile services to compete with the previous monopoly provider of telecommunications services the Bangladesh Telegraph and Telephone Board (BTTB).

Significant changes in the number of fixed and mobile services deployed in Bangladesh occurred in the late 1990s and the number of services in operation has subsequently grown exponentially in the past five years. The incentives both from government and public sectors have helped to grow this sector.

It is now one of the biggest sectors of Bangladesh. As a populous country, its huge market has attracted many foreign investors to invest in this sector. It has been forecasted that the average revenue from telecoms sector will be Tk1500crore2 a year. The infrastructure and Tele-density is low which on the other hand made the market a perfect place for telecom business. The demand is very high and the consumer base is very large but the investment is low because of the topographic layout. Bangladesh has a huge potential in WiMax and submarine cable which is a new technology in the country and has attracted the foreign telecom operators. Many foreign telecom operators are coming to Bangladesh to explore the potentiality of the technology. Some interested international telecom operators who want to start a business in Bangladesh are UK-based Orange Telecom, South Korean SK Telecom and UAE’s Etisalat. The government is encouraging private sector to invest more in the industry as they think that the industry is playing a vital role in developing the socioeconomic structure of the country. And to ensure that, the government has taken several attempt. Giving private sector the license for fixed line telephone is one of those attempts. Due to the environmental facts, the foreign entrants should adjust their equipments according to demand of the environment.

The buyer is powerful in the industry, but since the market is growing largely, it will be easy for the company to hold its own share, because of poverty; the population will be unlikely to avail the switching cost. And this also reduces the risk of high availability of substitutes. The supplier is not powerful in this case which is a plus for the company and the company can play with the price to keep the production cost low. Since the market is yet to be matured and growing very fast, we assume that the suppliers companies are also increasing.

Some multinational companies are showing their interest to enter into the market. This can lead some new suppliers to arrive into the market and make the environment more competitive. So at some stage the bargaining power of the suppliers will become very low. So from the above discussion, it can be said that the Bangladesh telecom market has a lot of potential to offer considering strategically ignorable or somehow alterable threats. The market looks very potential and prospective. Lots of opportunities are waiting.

Md. Najmul Islam Sagor,
2012-1-10-052
Department Of Business Administration
East West University, Bangladesh.

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