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Showing posts with label Telecommunications. Show all posts
Showing posts with label Telecommunications. Show all posts

Thursday, January 7, 2010

Are you Worried? Bharti-Airtel says not to worry!

Are you worried? Do you subscribe to Worried? As finally the Indian mobile behemoth has arrived in Bangladesh with a visa costing them a mere Rupees 45 lakh only and with the promise of juicy hanging mulas worth $300 million (Mula is Bangla term for radish, when we say ‘mula jholano’ it means hanging a radish to imply ‘alluring’, ‘promising big hollow things ahead’ etc.).


Its no wonder that Bangladesh is the ripest place on planet earth for mobile phone industry. Where else on earth would you get 150 million people crammed inside the largest delta of the world with naturally one of the highest population density per square mile? Where else on earth can you find such a monotonous landscape which is plain and where setting up one BTS (Base Tower Station) would suffice to serve to a greater number of mobile customers, as they literally are living next to, on top of, each other. Forget about voice quality at present and let alone Value Added Services, this market and the consumers are premature enough and would be happy enough to be subscribing to Airtel, so feed them according to their appetite isn’t it?


Warid always seemed Worried right from the word go in Bangladesh. Rumour has it that their entry into the market was questionable and BTRC blessings were bought through speed and cheap money. Other than slashing down air time charges, playing with their logo, encouraging love-birds to talk for cheap or free all night long and distributing branded blankets under the guise of CSR to the distressed, they seemed pretty worried all the way through.So I guess they were happy to have been relieved to be sold off to big brothers across the border where their media is also terming this as a 'distress sale'. Speculations are already underway about this due to the origin of the source country of take over and our bitter-sweet relations with them from time to time ranging from politics, water, sports, immigrants, religion, onions, eggs, sarees, criminals, militants, movies, cable television etc. Some of the speculations include:



--What does this hold for ordinary Bangladeshi mobile users? Reduced tariffs? Value added services? Better voice quality? (a CNG wala who uses mobile during traffic jams in Dhaka)
--Is it a threat to our sovereignty? What if Bharti-Airtel alliance tap sensitive phone conversations from our beloved politicians and export it across borders? (from an Indi-allergic person who loves Bollywood films and TV serials though, watches secretly and usually doesn’t admit it)
--If it were a ‘tata-byebye’ to Tata then why is it a ‘yaya’ to Bharti Airtel? And why now? (from a person who loves to bash the Gov no matter what)
--Will they create more jobs for Bangladeshi graduates? (from a student eager to get into telecom industry)
--Will they make sure that locals represent a significant important number of management positions? (a manager in Aktel thinking of a leap once the take over is complete)
--Will they help ease the Indian visa application processes? (from a frustrated frequent traveller to India)
--Will Airtel fly in Bollywood stars to promote their events in Dhaka? (from an event management executive)


Irrespective of their seriousness or funny-ness, the fact remains that Bangladesh is a mobile cow which everyone had been milking and Bharti-Airtel can also milk for years to come, until the delta vanishes under the sea due to global warming, climate change etc. Foreign Direct Investment of this scale is always welcome, its just that we as consumers are still not sure about the strength of balls of BTRC. Also the lack of any proper implementation of consumer protection rights only keeps us as vulnerable as we had always been. Also, GrameenPhone and Banglalink have been pioneering patriotic marketing thoroughly in their marketing campaigns to gain the mind share of the Bangladeshi youth mobile-sumers who are becoming more and more conscious of their national identity. Wonder what marketing approach Bharti-Airtel would adopt in this case. Also, how would they name their new born? War-tel? Bharid? Its just such a nice example of Indo-Pak management working together to tap the odd man's market (its us :) ). Ab dono milke maarenge!

Thursday, October 30, 2008

When Things Couldn't Get Any Worse

Couple months back, I wrote an article regarding Grameenphone's proposed $300 million IPO. I had concluded that instead of investments in Bangladesh, this money would leave first-class to Norway. GP and others have covered every nook of Bangladesh and they aren't interested in upgrading to 3G anytime soon when barely no one uses the internet, or talks with a smart phone or really knows how to operate a smart phone. (This is meant in a broader sense so don't be insulted if you fall in this category -which you probably do)

I shouldn't gloat. But just recently Telenor bought 60% of Unicom Wireless for a staggering $1.07 billion. This is more astonishing considering Unicom only paid $337 million for the India-wide mobile license earlier this year. Initial estimates are that they have to spend an additional $3 billion in the next three years to compete in a market that already has Virgin, Vodafone, Reliance, Tata and Airtel. Telenor investors didn't really digest this news really well, and the stock tanked 26%.

So Telenor needs $1.07 billion fast. I wrote couple months back that $300 million of the Bangladeshi IPO would be used for not-in-Bangladesh ventures. Since that was delayed to March 2009, a new Bangladeshi bond project worth $60 million in in the works. Newspapers did not connect the dots, but its safe to assume that the $60 million will be used to finance the Indian venture and not any Bangladeshi projects. Furthermore this $60 million bond is to be offered to private institutional investors. The same investors that Grameenphone decided to eliminate and provoke with GP's weird mobile-phone banking proposal. But then again Bangladeshis are highly skeptical of anything that involves India. Now its a double whammy -India and Grameenphone.

But $60 million from Bangladesh isn't going to cut it even if it is successful. Telenor is planning yet another IPO (or share sale to be specific) only this time in Norway. And only this time they 'plan' to raise $1.78 billion from the Norwegian market in the midst of their stock taking a dive and the entire world also taking a dive. It wouldn't surprise me if Telenor decided to hold multiple IPOs worldwide and slash the targets as time passes.

And this is the worst it could get right? Wrong.

Just recently, Russia decided to freeze (not literally as Telenor first assumed) all of Telenor's shares in Vimpelcom (the second largest mobile phone company there). Why? Because only this time instead of Yunus, Telenor has Mikhail Fridman as a partner. To make matters difficult Fridman is not aware what a Nobel Prize is or that he has been nominated for one multiple times. This is one Russian gangster who is too rich to pay off and doesn't make empty threats on Norwegian TV. Instead he works his magic and the next day Telenor has its shares frozen. And this is only his first baby step.

And this time, it is Telenor whining and making empty threats to Fridman.