GP sees stocks fall while Robi enters bull run
Stocks of Grameenphone have been falling ever since the government banned the country's top telecom company from selling new SIM cards at a time when shares of its main competitor, Robi Axiata, have entered a bull run.
The Bangladesh Telecommunication Regulatory Commission (BTRC) has banned Grameenphone from selling SIMs until the operator improves its service quality and reduces the rate of call drops.
Investors believe the BTRC's decision will put a halt to new customer acquisition for Grameenphone and so, the company's share price fell, said Md Moniruzzaman, managing director of IDLC Investments.
In contrast, investors think that Robi's new business acquisition will be easier now for the same reason.
"So, its stocks started a bull run," he added.
Grameenphone's share price plunged to Tk 282 yesterday, down 6.62 per cent from Tk 302 on Tuesday, according to data from the Dhaka Stock Exchange (DSE).
However, it should be mentioned that the circuit breaker imposed by the Bangladesh Securities and Exchange Commission (BSEC) prevents any stock from dropping more than 2 per cent daily but on the other hand, it allows share values to rise by a maximum of 10 per cent each day.
From Tuesday onwards, Robi's stocks soared 27 per cent to Tk 36.4 from Tk 28.6 previously, the data shows.
Moniruzzaman, who worked as issue manager for many top companies like Robi, said the government should have quality services indicators that are not changed frequently.
This is because sudden policy changes are not favourable for long-term investors in the country, said the leading merchant banker.
Echoing the same, Shahidul Islam, chief executive officer of the VIPB Asset Management Company, said general investors think that Grameenphone's ban on selling SIMs has benefitted Robi while negatively impacting the leading network provider.
So, they are behaving accordingly in terms of trading, Islam added.
He went on to say that the BTRC took the decision citing the bad quality of Grameenphone's service but this raises the question of whether the quality of other operators was assessed properly.
"If the law is enforced fairly for all competitors, then it is acceptable even if it hampers stock investors, however, the BTRC did not publish any assessment for other telecom operators," Islam said.
"The decision against Grameenphone has negatively impacted its stock investors," added Islam, who is former president of CFA Society Bangladesh.
Grameenphone's average call drop rate in December was at 0.29 per cent in Dhaka division, with exception to city corporation areas, according to the results of a nationwide drive published in March.
Robi's call drop rate during the same period was 0.23 per cent while Banglalink's was 0.32 per cent and Teletalk's was 2.69 per cent.
As per the BTRC's policy, the call drop rate should be less than 2 per cent.
Market leader Grameenphone had 8.49 crore subscribers as of this May, which is 46.11 per cent of all mobile subscribers in the country.
The BTRC said in its letter that Grameenphone has been increasing its subscriber base without improving its services.
It is also not providing compensation to customers for dropped calls despite the BTRC's earlier instructions to do so.
The regulator said it enforced the ban in the face of numerous complaints from policymakers and general customers.
Meanwhile, listed multinational telecom company Robi disclosed yesterday that it has entered an agreement for a three-year term loan with Dutch Bangla Bank Limited for an amount of Tk 400 crore.
However, it did not pledge any asset as a security in relation to the loan agreement.
A top official of Robi confirmed that the fund would be utilized to expand its network.