Private Phone Companies Gaining Ground In Bangladesh

The Bangladesh government showed great nerve when it shutdown a money-losing entity like the Adamjee Jute Mill, after failing repeatedly to make it profitable. It should do something with the Bangladesh Telegraph and Telephone Board (BTTB), the state-owned telecommunication company, which is bleeding red ink as nimble competitors steal its customers. Some choice quotes from this Daily Star article:

The number of private land phone users more than doubled in 2007, while state owned BTTB saw its number of subscribers drop, being unable to compete with the better service and cheaper connection of its private rivals.

So far BTTB has been unable to capitalise on this market as it is burdened by a reputation for bureaucracy, delays and hidden charges.

Among the private PSTN operators RanksTel is the largest with 1.13 lakh customers by the end of 2007, up 148 percent in the year. RanksTel started commercial operation in April 2005 and invested around Tk 300 crore to expand its services.

“From the beginning, we have followed a strategy of bringing the telephony services to the customers' door,” said Masrur Nawaz Waiz, head of operation and coordination for Rankstel.

“It is very easy to have a telephone within an hour if anyone wants it now, this is a real contrast with the past when it was so tough to get phone. This change helps us to attract customers,” Waiz said.

“In the case of BTTB, its bad reputation for not providing services in time to the customers is the main reason for them loosing customers,” said a high official of Telecom Ministry, adding that BTTB will lose more customers in the coming years even after restructuring.

The accompanying graphic says it all, in my opinion. But unlike Adamjee and Biman, BTTB is a good candidate for privatization.

The days of government owning the lines of communications—telephone and telegraph, radio and television, and postal services—are long over. The telecommunication industry has become too fragmented (and less strategic) to be controlled by a monopoly, and the loss of revenue for BTTB is commensurate with this fragmentation.