Business

Mobile Telephones As Change Agents

When mobile telephony made its entry into Bangladesh in a very modest scale in 1989, it was beyond the wildest imagination of anyone that a poor, daily wage earner woman would ever own a mobile phone set and talk to her near and dear ones at distant places. But that is a reality now. Millions of poor men and women now own mobile handsets and use the same at affordable call rates.
The fact remains that mobile telephony has transformed the life and living in this country over the last two and a half decades. And as a natural consequence, the economy, too, has been benefited immensely from the process of transformation.

There is no denying that there should be regulatory control over their operations so that subscribers’ interests are better protected. The government should keep strong vigil on them so that they cannot evade tax through transfer pricing or any other mechanism.”

The majority of the population, these days, cannot think of a life without mobile phones as the latter have made their life easier. Millions have come out of their homes to take up employments in distant places just because of the fact that they are now able to maintain contacts with the near and dear ones through mobile phones. The world has become truly ‘smaller’ in this part of the world because of mobile technology.
Initially, mobile phones were the tools that could be used only by the affluent section of society because of high cost of handsets and exorbitant call rates. Things have, however, changed radically over the last 20 to 25 years. A feature phone handset now costs less than the price of medium-sized Hilsha fish and smart phones are widely used even by the low-income people.
The mobile technology has revolutionized the telecommunications across the globe. But, for millions of poor men and women in Bangladesh, it has come as a blessing. The readymade garment (RMG) industry has emerged as the prime source of earning the livelihood for millions of poor women who also consider the mobile phones as an integral part of their life.
The spread of mobile technology in this country, by any count, has been rather fast compared to that of any least developed country.
The mobile penetration rate (53%) in Bangladesh is more than regional average and the mobile internet penetration rate is slightly below (33%) of the regional average of 34%. In areas of 3G connections, it is almost at par with the regional average.
According to a report of the GSMA, the global trade body of the mobile phone operators, the mobile phone technologies generated 6.2% of the Bangladesh’s gross domestic product (GDP) in 2015. In monetary terms, it was worth $13 billion.
The mobile industry created employment opportunities for 780,000 people in 2015 and about one-third of the same were of direct ones. According to the GSMA projection, the mobile telephony will be able to generate economic value worth $ 17 billion by 2020 provided the sector gets enough policy support from the government. An additional 70,000 employment opportunities—both direct and indirect— would also be created, the telecom trade body estimates.
The government’s revenue earning from the mobile telephony has been substantial. However, the earning has been declining in recent years. In the fiscal year 2011-12, the sector fetched more than Tk 42 billion in all types of revenue. But in the immediate past financial year, the amount had come down to only Tk.8.55 billion, according to a recent statement made by state minister for telecom Tarana Halim in the national parliament.
The reason for higher revenue earning in 201-12 and the subsequent year could be the revenue earned through the auction of spectrum for introduction of 3G connections by the mobile phone companies.
The government would soon earn again a substantial amount through the auction of spectrum for the 4G. But the amount is likely to be far smaller than that was earned earlier through the auction of 3G spectrum.
Despite their substantial contribution to social and economic empowerment of a vast majority of the population, the government’s policy support, the mobile operators feel, has not been forthcoming for their further growth. They tend to feel that the government looks at the telecom operators as revenue-churning units, not as economic units having vast potentials to work as change agents. It is least interested to recognize their contributions to society and economy in particular.
There is no denying that mobile telephone business, if run efficiently, offers good return on investment. Without a large subscribers’ base, it is quite difficult to earn profit after paying the corporate tax the rate of which is quite high.
A section of government policymakers appear to be very hostile to foreign mobile operators as they think that the latter have been making money without any worthwhile investment. They are not ready to acknowledge the fact that these companies are making regular contribution to the national coffer. In fact, the sector is the second largest source of tax revenue for the government.
There is no denying that there should be regulatory control over their operations so that subscribers’ interests are better protected. The government should keep strong vigil on them so that they cannot evade tax through transfer pricing or any other mechanism.
But the government should extend necessary policy support to the telecom sector that saw some consolidation in the immediate past fiscal year through the merger of the two telecom operators—Robi and Airtel. In the current fiscal, the country is set to witness the launch of the country’s first communication satellite and rollout of the 4th generation mobile services. The two events would add a new chapter to the history of Bangladesh telecom history.

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