WiMax operators might find that their services cannot be kept affordable

Grameenphone is the leading service provider in Bangladesh, targeting 50
mn customers by the end of 2009. Since its inception in March 1997, Grameenphone
has built the largest cellular network in the country, and presently nearly 98%
of Bangladesh is within the coverage area of the Grameenphone network. Oddvar
Hasjedal took over the reins as the CEO around four months back. In a
conversation with Voice&Data, Oddvar talks about the Bangladesh telecom industry
and broadband scenario, its IPO plans, green strategies, and the future plans of
Grameephone. He believes that 3G and WiMax operators will coexist in Bangladesh,
and spur the growth of broadband penetration in the country. Excerpts

How has the telecom industry in Bangladesh been acting as a catalyst for
socio-economic development?

The telecom industry is growing very rapidly. In the first ten years,
Grameenphone enjoyed triple-figure growth. As the cost of acquiring mobile sets
and mobile connections have dropped, more people are buying mobile phones. The
tariffs have been sliding as a result of the competition as well as
consolidation of investments in the industry. Prices for voice calls are today
amongst the lowest in the world. As people begin to see the business
opportunities associated with communication, the mobile phone is seen as an
affordable tool for entrepreneurs. With increasing use of mobile telephony
solutions-such as the access to email-people are becoming closer to e-commerce.
Our Village Phone service gave business to poor women in rural areas. Mobile
public phones give extra revenue to many, including post offices, where the
postman now is a moving public phone. Independent research shows that the
introduction of mobile services significantly increases GDP, and is opening up
more avenues for the socio-economic development of the local community.

How is the Bangladesh telecom industry likely to evolve in the coming
years?

The Bangladesh telecommunications industry will consolidate itself within
two years. The general wisdom was that Bangladesh would roll out its 50
millionth customer by 2009. While this may still happen, the market has slowed
down dramatically as a result of the global recession, but more so because of
the high SIM tax, which has made owning a mobile phone more costly. The new
market for mobile penetration and phone growth is in the more cost-conscious
rural market. Despite these prevailing conditions, the industry is projected to
grow. However, looking at most of the other operators carrying losses in this
time of global recession, I would be surprised if nothing structural happens in
the near future.

What are the initiatives that Grameenphone has taken regarding
Bangladesh's growing digital divide?

Grameenphone, this year, has launched a new Internet vision with the promise
that 'Light will find its way.' The next market for growth in the industry is
data. We invested in enabling EDGE into our network as early as September 2005,
and today our network is fully EDGE/GPRS enabled; and since our network covers
almost 100% of the population of Bangladesh, anyone can access the Internet from
anywhere in the country. More than 4 mn subscribers have registered for EDGE
based services, and we find usage both in the urban and rural areas. Very few
people have high speed broadband, mostly due to the very modest availability of
access. 3G/HSPA and WiMax solutions will improve this, given that the regulator
is willing to focus on the long term benefit of infrastructure rather than short
term license fees. Given a reasonable licensing policy, Grameenphone will take
part in the digital revolution that can be the outcome of such infrastructure.
However, access technologies alone will not help. What is needed is a broad
cooperation between government, operators, and IT developers to create
Bangladesh based services and content, and to make end user equipment
affordable. If this happens, the digital divide could be broken, at least in
important areas like education, healthcare and public efficiency. Grameenphone
will focus on these user aspects of broadband in 2009, and sees this as more
important than to hurry on the infrastructure.

What is happening on the 3G and 4G front?

Last year, the regulatory authorities had indicated that three 3G licenses
were going to be auctioned this year. Most experts thought that the licenses
would be auctioned in March 2009. This, however, did not happen. The last
indication was that the auction would happen during this year. As suggested
earlier, we will focus on the services, in particular, those that can run on
EDGE. We will also pursue dialog with the authorities and entrepreneurs on
creating local services and content in Bangladesh.

Do you think WiMax will be successful in Bangladesh?

I think that the biggest hurdle that WiMax faces is the same that developed
countries faced with 3G-the initial license fees has been so high that it has
prevented the technology from becoming affordable. The biggest promise for WiMax
is the broadband services competing with the fixed line DSL operators. I believe
3G and WiMax operators will coexist in Bangladesh, and that the competition
among them will spur the growth of broadband in this country. Besides the tough
balance sheet brought forward after the license auction, WiMax operators might
find that their services cannot be kept affordable, thus making it difficult to
find enough interested users.

What is Grameenphone doing on the green telecom front?

Last year, we set up two solar-powered base stations (BTS) in Bangladesh;
these stations were designed to work in conjunction with electricity from the
national grid-with the electric grid as back-up. The findings of the pilot
project have been very encouraging, and we are working at deploying a series of
solar powered BTS in the country this year. We are also looking into various
other ways to reduce our power usage, such as new equipment, management of BTSs,
outdoor stations rather than indoor, alternative energy in offices, etc.

What are your plans regarding expansion in rural Bangladesh?

When the company was launched in 1997, Grameenphone already had a product
for rural Bangladesh-the Village Phone. So expanding into rural Bangladesh was a
part of the business model that we had developed. The company has invested
heavily in taking services to the rural communities. In addition to HealthLine,
we have Community Information Centers (CIC), which are basically rural Internet
kiosks that gain access to the Internet through our EDGE connectivity. These
centers have turned out to be a meeting place for all kinds of digital services
in the local community. As the business model progresses, and the services can
be made more affordable for a cost-conscious rural market, we will renew our
efforts to market our products deeper into the rural landscape. In doing so, we
will need cooperation from the authorities. By introducing the vision of Digital
Bangladesh, the government has given us a platform for fruitful cooperation.

Arpita Prem

arpitap@cybermedia.co.in