Telcos' investment shrinks but revenue rises | The Daily Star
12:00 AM, January 14, 2018 / LAST MODIFIED: 01:34 AM, January 14, 2018

Telcos' investment shrinks but revenue rises

Investment by mobile operators hit a six-year low in fiscal 2016-17 after being on a descent for the past four years even though the sector's revenue is growing every year.

In fiscal 2016-17, the mobile operators' investment declined 14.94 percent year-on-year to Tk 4,626 crore while their revenue grew 3.77 percent, according to a report of Bangladesh Telecommunication Regulatory Commission.

Mobile operators blamed the regulatory uncertainties for the shrinking investment. 

“Doing business in Bangladesh is very challenging due to various issues and regulatory uncertainties,” said TIM Nurul Kabir, secretary general of the Association of Mobile Telecom Operators of Bangladesh.

The operators have huge sums of contingent liabilities since some disputed issues with the regulators are being left “unresolved” for a long time.

“From an investment point of view, this is not a good sign and should be addressed with high priority.”

Despite the adverse regulatory environment, the mobile operators have made huge investment during the current tenure of the government in the form of 2G licence renewal and 3G technology adoption, Kabir added.

A senior official of a leading operator said the investment figures for fiscal 2013-14 were higher due to 3G spectrum fees paid by the operators at that time.

The mobile operators then had to pour in money for rolling out 3G service. In fiscal 2011-12 and 2012-13, the mobile operators also had to renew their licences and that also bumped up the investment numbers, said market sources.

Over the last decade, the sector has become an engine for economic growth and one of the key enablers for digital transformation, Kabir said.  “However, the investment trend of the telecom sector has not reached its full potential though we expected a sharp spike in recent times,” he said, while calling for more incentives to attract further investment.

Five operators, except Citycell, together invested about Tk 11,414 crore in fiscal 2012-13, and about Tk 9,788 crore in 2013-14, according to the BTRC.

The figure dropped to Tk 5,667 crore the following fiscal year.

But the operators' revenue was unaffected: it stood at Tk 23,825 crore in fiscal 2016-17, up 14.74 percent year-on-year.

Robi made the highest investment last fiscal year, of Tk 1,983 crore, followed by market leader Grameenphone at Tk 1,524 crore. Banglalink's investment was Tk 902 crore and state-run Teletalk's about Tk 218 crore.

The country's oldest operator, Citycell, which has been out of service since October 2016, did not make any investment.Though the BTRC report has not mentioned anything about operators' profitability, sources said Grameenphone and Banglalink made marginal profits last fiscal year. 

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Grameenphone and Robi:
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Banglalink:
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