STRATEGIC ANALYSIS Of GRAMEENPHONE LIMITED: Chapter 4: Industry and Competitive Analysis

Chapter 4: Industry and Competitive Analysis

Bangladesh has ended 2007 with 34.37 million mobile phone subscribers, up from 33.10 million in November last year, according to the latest update from the Bangladesh Telecommunication Regulatory Commission. Grameenphone had 16.48 million customers, up from 16.01, while Sheba Telecom (Bangalink) ended the year with 7.08 million customers, up from 6.51 million in the previous month. Aktel has been losing customers during the year and ended December with 6.40 million subscribers while Citycell increased its subscriber base to 1.41 million from 1.38 million in November. Teletalk Bangladesh had 850,000 subscribers, up from 720,000 a month earlier, and Warid Telecom ended 2007 with 2.15 million customers, compared with 1.95 million in November.
The mobile phone industry in Bangladesh is growing rapidly, and is making a significant contribution to economic development and employment generation. The number of mobile subscribers increased to 11 million in 2006, from 3.85 million in 2004, registering an impressive growth of 186%. Consequently, the country’s mobile telecom density went up to 6.7% from 2.75% during these few years. Among the five companies that are currently operating, Grameenphone (in partnership with Telenor of Norway), which has the highest market share, more than doubled its customer base to over 6 million during this period. Other companies, which include Aktel, Banglalink, CityCell, and Teletalk, also experienced robust growth in terms of number of subscribers and customer revenue. Telenor, Telekom Malaysia (TM), Orascom, Sing Tel, and UAE based Warid Telecom are amongst the main foreign companies that have invested in the mobile phone sector in Bangladesh.
Despite rapid growth in the subscriber base in the past three years, there is still substantial scope for growth in the mobile industry as some 93% of the population still do not subscribe to a mobile phone service. The spectacular growth in the mobile phone sector is making a significant contribution in both rural and urban areas. There is ample evidence that improved telecommunications access has benefited lower, middle and upper income groups alike. Greater connectivity has enhanced business activity, reduced the cost of doing business, generated new employment opportunities and contributed to poverty reduction. Greater availability of mobile phones, especially in the rural areas where land phone connections are scarce, enables access to information on available health and education services, and markets, and facilitates income generating activities, employment and remittances from abroad. As a result of the Village Phone (VP) program provided by Grameenphone, a large proportion of the rural population now has access to telecom services. The VP program provides telecom facilities to more than 40,000 villages in 61 districts, which covers 58% of the 68,000 villages in the country. Other mobile phone providers, such as Aktel, Banglalink, CityCell, and Teletalk have also considerably enhanced their network coverage around the country. Connection fees and call costs have come down significantly over the last two years due to increased competition in the sector. Network coverage has also improved as a result of greater interconnectivity amongst the different providers and with Bangladesh Telegraph and Telephone Board. In the major urban areas, coverage has substantially improved. However, despite rapid progress, the quality of services continues to be a challenge for the mobile industry with high levels of call disconnection and poor call completion rates owing to capacity constraints and inadequate infrastructure. To further enhance the market potential of the industry, leading mobile companies have been investing to address the issue of service quality.

In order to understand how Grameenphone is doing with respect to the competitors, an analysis is done, for doing this, ‘dominant economic characteristics’ of the industry, followed by the 5 forces analyses have been identified.

4.1 Industry’s Dominant Economic Features

Because industries differ so significantly, analyzing a company’s industry and competitive environment begins with identifying the industry’s dominant economic features. The dominant economic characteristics are the factors that influence the overall operations of the players in it.

The followings depicts a picture of the major economic features for the telecommunication industry in Bangladesh-

Market size
The number of mobile subscribers currently in Bangladesh is about 34 million. It increased to 34 million from 3.85 million in 2004. There is still a room for growth as the population of the country is 140 million. According to a research of BIS Shrapnel, the number of mobile phone connections in Bangladesh by 2010 will reach to 60 million.

Figure 4: Number of Mobile Subscribers as of Jan, 2008

Country’s mobile telecom density also went up to 6.7% from 2.75% during 2004 to 2006.

Market Growth Rate
In 2004 and 2005 the mobile phone industry of Bangladesh grew at the rate of 100% and 137% respectively. In 2006 (till October), it has increased at a phenomenal rate of 186%. Massive foreign investment in the last 9 years has ensured a high growth rate. Telenor, Telekom Malaysia (TM), Orascom, SingTel, and UAE-based Warid Telecom are foreign companies who have invested in the mobile phone sector in Bangladesh.

Despite rapid growth in the subscriber base in the past three years, there is still substantial scope for growth in the mobile industry as some 93% of the population still do not subscribe to a mobile phone service. Indeed, industry analysts expect that the total number of cellular phone subscribers will double to over 20 million by 2007.

Figure 5: % growth of mobile subscribers
Business life cycle
In the global market, mobile industry is in early maturity stage, but Bangladesh telecom industry in rapid growth stage.

 Early dev.      Rapid Gr.        Early Maturity          Maturity        Saturation   Decline    
Figure 6: The business life cycle in Global (developed world) market

Early dev.      Rapid Gr.        Early Maturity          Maturity        Saturation   Decline    
Figure 7: The business life cycle of mobile phone operator industry in Bangladesh market

Scope of competitive rivalry
The scope of competitive rivalry at present is truly national. All the mobile telecom companies are competing at national level. The growth potential at the national level is very attractive, as such; no company is considering to expand beyond national boundaries. Also, all the telecom companies are partially or fully owned by foreign companies. So it is not possible for the Bangladeshi telecom companies to expand to foreign markets which involve high cost (both financial and technological) and strict regulations.

Number of rivals

The mobile telecommunication industry is a consolidated one with only five companies competing. Among the five companies that are currently operating, Grameenphone has the highest market share. Other companies are Aktel, Banglalink, CityCell, and Teletalk. A sixth operator, Warid Telecom, is preparing to enter the market after obtaining an operating license in December 2005.

Target and End Consumers

Common people are the target subscribers for telecom companies.  To suit the specific requirements of different income groups – low end, mid end and high end, different age groups and professional groups, a wide range of pre-paid and post paid packages are offered by the mobile telecom operators.

Examples of group specific packages are DJuice - targeting the youth generation, Banglalink Ladies First – targeting the woman population, etc.

Consumers needs and expectations
The main attributes the subscribers in the mobile telecommunication industry look for are-
  • Satisfactory network quality
  • quick connection
  • no call drops
  • less call time noise and other interferences
  • Low tariff rates
  • Wide Network coverage
  • Excellent customer service

Optimum value added services such as-
        - multimedia message transfer
        - voice sms
- international roaming
Capacity Utilization
The number of Base Tower Station (BTS) and network capacity of existing structure (towers) of all the mobile phone operators are not sufficient enough to cover uninterrupted and top quality .Specially, during the peak hours, subscribers face difficulty in call connecting and high number of call drops occur mainly because of these reasons.

The main reason behind this optimum capacity utilization is, more than expected growth rates of subscribers in the country. As such, the existing capacity is overloaded and there is a continuous process of network capacity expansion. Therefore quality of services continues to be a challenge for the mobile industry with high levels of call disconnection and poor call completion rates owing to capacity constraints and inadequate infrastructure.

Pace of technological change
Advanced technologies are playing a major role in the mobile telecommunication industry. Many cutting edge technologies have become a part of the services the mobile phone companies offer and have changed the way the business was done even a couple of years ago. GPRS, Edge, multimedia message transfer have a part of the bundle of services provided by mobile phone operators.
Telecommunication instruments like transmission equipments, switches, high capacity antennas are also being replaced and updated to keep pace with modern technology.
Product Characteristics
For every mobile operator, mobile package offerings at different tariff rates come in two forms-
Subscribers don't have to worry about their prepaid talk-time running out
Subscribers can use the cash cards to pay your bills at their convenience
Subscribers don't need to go hunting for prepaid card shops when their credit runs out 
Subscribers need to pay a minimum monthly line rent
Subscribers need to have a security money amount deposited
Subscribers don't have to pay monthly line rent
Subscribers don’t need to deposit money for any special service (e.g. NWD/ISD)
Subscribers don't have to wait in long queue to pay mobile bill
Subscribers have to recharge your account before you can use it
Recharge period expires after a set time
All these packages include some value added services such as SMS, MMS, Voice SMS, international roaming facilities, etc.

Degrees of product differentiation
The products of all the mobile operators are becoming look alike and less differentiated. Since the mobile phone operators are offerings more or less similar pre paid and post paid packages, price competition in forms of tariff rate is becoming intense among them.

Industry Profitability
Industry profitability is soaring high. Due to intense price competition, the mobile phone operators are regularly cutting down on their tariff rates. This results in a lower ARPU (Average revenue per user per month) but as the number of subscribers is increasing for the mobile phone operators, overall profitability is also increasing.


Anonymous said...

This is my first time go to see at here and i am truly impressed to read everthing at one place.

Feel free to visit my homepage; Natural Anti Aging Products

Anonymous said...

magnificent put up, very informative. I wonder why the other specialists
of this sector don't realize this. You should continue your writing. I am confident, you've a great readers' base already!

Have a look at my web-site Anti aging formula

Anonymous said...

Hello would you mind stating which blog platform
you're using? I'm looking to start my own blog soon but I'm having a tough time choosing between BlogEngine/Wordpress/B2evolution and Drupal. The reason I ask is because your design seems different then most blogs and I'm looking for something completely unique.

P.S My apologies for getting off-topic but I had to ask!

Feel free to visit my web blog Get Muscle Fast

Anonymous said...

The other day, while I was at work, my sister stole
my iPad and tested to see if it can survive a 30 foot drop, just so she can be a
youtube sensation. My apple ipad is now destroyed and she has 83 views.
I know this is entirely off topic but I had to share it with someone!

my web-site: Buy Pure Raspberry ketone

Anonymous said...

Great blog! Is your theme custom made or did you download it from
somewhere? A theme like yours with a few simple adjustements would really make my blog
jump out. Please let me know where you got your theme.
Bless you

my webpage Acai Juice Benefits

Anonymous said...

I almost never drop remarks, but i did a few searching and wound up here "STRATEGIC ANALYSIS Of GRAMEENPHONE LIMITED: Chapter 4: Industry and Competitive Analysis".
And I actually do have 2 questions for you if it's allright. Is it only me or does it give the impression like some of these remarks come across like they are left by brain dead visitors? :-P And, if you are posting on other places, I'd
like to follow everything fresh you have to post. Could you make a list
of every one of all your community pages like your
linkedin profile, Facebook page or twitter feed?

Take a look at my webpage: the Diet Patch

Anonymous said...

You need to take part in a contest for one of the best sites on the net.
I will recommend this blog!

Feel free to visit my web blog ... Pure HCA

Anonymous said...

Excellent beat ! I wish to apprentice while you amend your web site, how could i subscribe for a blog
site? The account helped me a acceptable deal. I had been tiny bit acquainted of this your broadcast offered bright
clear concept

Also visit my webpage ... 1285 and Elevate GF

Anonymous said...

I love what you guys tend to be up too. Such clever work
and exposure! Keep up the fantastic works guys I've incorporated you guys to my personal blogroll.

Also visit my website - webpage

Anonymous said...

Excellent article. Keep posting such kind of info on your site.
Im really impressed by your site.
Hello there, You have performed an incredible job.
I will certainly digg it and for my part suggest to my friends.
I am confident they'll be benefited from this website.

Review my webpage; Hard knight review

Anonymous said...

Thanks to my father who shared with me concerning this weblog,
this web site is in fact awesome.

Here is my website ... Online Payday Loans
:: ::

Anonymous said...

I drop a leave a response each time I appreciate a article on a site or if I have something to contribute to the conversation.
It is a result of the sincerness communicated in the post I read.
And after this post "STRATEGIC ANALYSIS Of GRAMEENPHONE LIMITED: Chapter 4: Industry and Competitive Analysis".
I was excited enough to create a comment :-) I do have a couple of questions for you if
you tend not to mind. Is it only me or do some of the responses come
across like they are coming from brain dead people?
:-P And, if you are posting at additional sites, I'd like to follow you. Could you make a list every one of your social pages like your Facebook page, twitter feed, or linkedin profile?

pure griffonia

Post a Comment

Lyrics buy books online GSM Bangladesh Literature books grameenphone Asia Chord Credit Guitar Linux STRATEGIC ANALYSIS Of GRAMEENPHONE LIMITED Tips classification love Computer Human Jackson Michael Money Poem Romantic STRATEGIC ANALYSIS Swine Technology Ubuntu Virus Visa card diseases friend problem reviews 1976 ATM Ambition Analysis Animal virology Connection Daffodils Definition Depression Earn Fun Funny HIV HRM Practices of Grameenphone Limited Influenza Internet Lifestyle Medical disasters Music Nokia Notes Online Pandemics Phone Photography Professional Revolution Security System Tricks Windows Wordsworth adsense company customer data disasters flixya follow friendship genre good google government highest standard technology international outbreak pig point pray research transmission 20 2007 2008 2009 AIDS Acronyms Affiliate America Argentina Artcell Boot Butterfly Causes of death Che Command Company Background Currency DARWIN DEVELOPMENT OF ENGLISH ANXIETY SCALE FOR SECONDARY SCHOOL Debit Decision Depression Cure Discovery and invention controversies Disease Domain E-links FM Radio Fidel Castro Flirt Forex Free Genuine Guevara HM Immunodeficiency Indian Industry and Competitive Analysis Insurance Japanese Wife John Ruskin Jokes LRB Laptop League Liberation Link Linkin Literary Livestock MLM Marxist Movements NGO Nothing ORIGIN OS Opperating Park Post Premier Punch Result Retroviruses Royality SPECIES SSC STUDENTS Scum Sexually transmitted diseases and infections Shania Twain Smile Socialism Song Sports leagues T20 Tale Terms Twenty USA Update Wikipedia Winnings XP airport bestseller broadcast competitions cpc cricket depressed domestic download dual ebook effective email establishments features flu forum gmail god habits happy important index james leagues major mask methodology modernism objectives pictures poetry pop poverty prayer read seaport shop online short story slack sports study teens tutorial twilight unijoy