Growth in Bangladesh's mobile telephone sector, from a humble beginning in the early 1990s, has really picked up pace in the past few years, aided by higher subscriber volumes, lower tariffs and falling handset prices.

In this report the development of the mobile market in Bangladesh is examined. Bangladesh had more than 1.5 million subscribers by mid-2003. This represented an annual growth of 100% over the previous year. Analysts predict that the market will continue to grow strongly, moving at a compounded annual rate of more than 75%, Bangladesh is a market now for 13 million mobile phones. There is tremendous potential for wireless internet in Bangladesh as Bangladesh telephony infrastructure is relatively poor.

Pacific Bangladesh Telecom Limited (CityCell) has consistently set the benchmark for the telecoms industry in Bangladesh. It was the first to launch mobile phone in the sub-continent, first-ever private wireless network in Bangladesh, first to adopt CDMA technology in the sub-continent.

At the inception of mobile phone in Bangladesh in early 1990s it used to cost $1,500 to get a mobile connection, the cost has now come down to $100, while the lowest per minute tariff is about .01 cents.

In November 1996, licences for cellular mobile telephone were issued to GrameenPhone, Telecom Malaysia International BD Ltd. and Sheba Telecom Ltd. All these are joint venture between Bangladeshi companies and their foreign partners.

The state telephone monopoly Bangladesh Telegraph and Telephone Board (BTTB) now operates 800,000 fixed line phones and in the next five years the demand for fixed line phones will be 3.5 million, experts believe the BTTB will be unable to meet.

Recently, the use of wireless networks, and in particular wi-fi, has drawn a lot of attention as a relatively low-cost way of getting fast network access to rural areas and less-developed country like Bangladesh. Wi-fi is not the only wireless networking technology, of course. Packet radio, microwave links and even 3G phone networks could all do a similar job.

But wi-fi is the latest cool thing and -- not entirely coincidentally -- a growing number of companies and market analysts have started touting it as the next big thing, the focus for a second-generation internet-style boom.

Learn Foundation, a Sylhet-based non-profit charity set up in 1997, has worked to reach computers and the internet to isolated rural areas of Bangladesh, using wireless technology. The Foundation has already built seven radio towers in seven villages in the region and aims to establish a broadband network in a 2,500 square kilometre (965 square mile) area.

GrameenPhone launched Wireless Application Protocol (WAP) service and Short Message Service on July 1, 2001. Anyone can send short message to GrameenPhone via the web. Try http://www.icq.com/ or http://203.76.110.210:8181/vas/websms/login.xml for City Cell, where two leading dailies provides SMS news alerts.

GrameenPhone ladies provide villagers with a vital link to services such as hospitals and to relatives both at home and abroad, in a country with the lowest number of phones in South Asia. Villagers flock to Village Phone ladies to use a mobile to call relatives, friends or business associates, paying for calls by the minute. The Grameen scheme has been hailed as a successful example of introducing technology to the poor.

The mobile technology has literally changed many village phone ladies' life. At present, 32,000 village phones are at work in 52 districts and 50,000 Bangladeshi women are making a living as GrameenPhone Ladies, as they are known. And so emerged Bangladesh's 'telephone ladies,' who gained social importance and income from selling wireless service to fellow villagers.

The women, who power their phones with solar panels, now make $500 a month, about the same amount as earned by the typical CEO of a Bangladeshi bank and a lot more than a Bangladeshi's average annual income of $380. As for the villagers there is no more traveling to the city to make phone calls.

There are few local companies engaged in hardware/software development for wireless devices and networks. Recently, few universities took initiatives to teach courses in wireless media.

As Bangladesh telephony infrastructure is relatively poor, mobile phone is creating huge impact especially among poor people in the village; a good example is Village Phone and Farmers. Rural areas are greatly benefiting from Mobile phone in Bangladesh.

In the early 1990s, when Iqbal Quadir, who conceived the idea of launching a mobile phone network in Bangladesh, was looking for investors to back his idea. Quadir said initially he was turned down by an executive of a cellphone company in New York who told him, "We're not the Red Cross."

At the end of 2001, Quadir showed how Third World ventures can be profitable -- and provide a useful service -- when GrameenPhone Ltd made $27 million in pretax profits. It notched this profit after just five years, far sooner than many First World start-ups.

"We keep coming down to this basic conundrum of the purchasing power of the poor," says Peter Reiling, president and CEO of Techno-Serve, a nonprofit organisation in Norwalk, Conn.

"Iqbal Quadir seems to have found the perfect technology that's within their reach."

The author works as an Unix System Administrator in the Main Data Center for Governor's Office for Technology, Commonwealth of Kentucky and the founder of Bangladesh Information Technology group called BANGLA-IT.