Telcos’ investment shrinks but revenue rises

Mobile operator investment reached its lowest level in six years in 2016-17, after experiencing a decline in the last four years, although industry revenues are increasing each year.

During fiscal year 2016-17, the investment of mobile operators decreased by 14.94% year-on-year to reach 4,626 crores while their revenues increased by 3,77 %, according to a report from the Telecommunication Regulatory Commission of Bangladesh.

Mobile operators blamed regulatory uncertainties for contraction of investment.

"Doing business in Bangladesh is very difficult because of various regulatory issues and uncertainties," said TIM Nurul Kabir, general secretary of the Bangladesh Mobile Operators Association.

Operators have huge amounts of contingent liabilities since some issues in dispute with regulators have been left unresolved for a long time.

"From the point of view of investment, this is not a good sign and should be treated with a high priority."

Despite the unfavorable regulatory environment, mobile operators have made huge investments during the current period of government in the form of 2G license renewal and the adoption of 3G technology, Kabir added.

A senior manager of a large operator said that the investment figures for the 2013-2014 fiscal year were higher because of the 3G spectrum fees paid by operators at that time the.

Mobile operators then had to pay money to deploy the 3G service. During the 2011-2012 and 2012-2013 fiscal years, mobile operators also had to renew their licenses, which also boosted the number of investments, according to market sources.

Over the past decade, the sector has become a driver of economic growth and one of the main drivers of digital transformation, Kabir said. "However, the investment trend in the telecoms sector has not reached its full potential even though we were expecting a sharp rise in recent times," he said, while calling for more money. Incentives to attract more investment.

Five operators, with the exception of Citycell, together invested about 11,414 crores of Tk during the fiscal year 2012-13, and about 9,788 crores of Tk in 2013-14, according to the BTRC.

The figure falls to 5,667 crores TK the following fiscal year.

But the operators' business figure was not affected: it stood at 23,825 crores Tk during the fiscal year 2016-17, up 14, 74% over one year.

Robi made the highest investment of 1,982 crores last year, followed by market leader Grameenphone at 1,524 crores. Banglalink's investment amounted to 902 crores for Tk and Teletalk's investment to around 218 crores for Tk.

The country's oldest operator, Citycell, which had been out of service since October 2016, has made no investment. Although the BTRC report did not mention anything about operator profitability, Grameenphone and Banglalink made marginal profits last year.

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