Mobile subscriber growth to slow after 2009 as poor struggle to buy handsets
Grameenphone CFO says
Sarwar A Chowdhury
Growth rates in Bangladesh's mobile telecom industry will slow after 2009 as poorer people will struggle to buy handsets and SIM cards, according to a senior official of Grameenphone, the country's largest mobile phone operator.Md Arif Al Islam, chief financial officer (CFO) of Grameenphone said: "The cell phone industry witnessed a 140 percent growth last year over the previous year which was the largest growth in any industry in Bangladesh." "We are projecting that in the next two years the market capacity or depth of the market may be as high as 50 million subscribers and by the end of 2009 the depth will be 60 million," he said. However, Islam said that there were significant 'entry barriers' that would make it very difficult for the pace of growth to be maintained after 2009. These included the tax on SIM cards and high cost of handsets. Lower income groups such as farmers or rickshaw pullers may not be able to pay Tk 2,000 or Tk 3,000 for a mobile handset, he explained. Islam made his comments to reporters during a discussion on Grameenphone's investments in Bangladesh. At the meeting at Islam's office in Dhaka, the CFO also gave the company's views on the last week's national budget. "In terms of the national perspective there are a lot of positive aspects in the proposed budget which will benefit the country's economy. But at the same time, we also feel that the budget came up with some additional taxes and duties which will ultimately affect the industry," he said. The 2007-2008 budget proposal includes an increase in the corporate tax rate on mobile phone operators from 40 per cent to 45 per cent. However the tax rate would be cut to 35 percent, if the companies convert to publicly traded companies and are listed on the stock exchanges. The budget also proposes the withdrawing of the duty exemption on telecommunication equipment, the imposition of a supplementary duty at the rate of 60 percent on SIM cards and the enhancement of the tariff on each imported handset by Tk 300. Islam said since its started operations in 1997 Grameenphone has invested Tk 7,600 crore in the mobile industry till 2006. The company contributed Tk 6,700 crore to the government exchequer during the period. He said that presently there are 22 million telephone subscribers, including land phones. Of these, 13 million are Grameenphone subscribers.
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