Will 3G license help Airtel Bangladesh?

Airtel Bangladesh, the mobile operator in Bangladesh has bagged 3G license for $105 million in 2.1 GHz band.

The company has bagged 5 MHz spectrum in 1945-1950/2135-2140 MHz band. Grameen Phone, Robi Axiata and Banglalink Digital Communications has also won 3G spectrum along with Bharti Airtel in yesterday’s spectrum auction.

Grameen Phone bagged 10 MHz spectrum whereas all others bagged 5 MHz spectrum each. Grameen Phone paid $210 million and all others paid $105 million each. Bangladesh Telecom Regulatory Commission (BTRC) collected a total of $525 million from the recently concluded 3G auction.

In 2.1 GHz band, Grameen Phone bagged 1935-1945/2125-2135 band, Robi Axiata got 1950-1955/2140-2145 and Banglalink Digital Communications received 1955-1960/2145-2150. Grameen Phone was assigned two blocks of 5 MHz whereas others were offered one block of 5MHz each. The spectrum fee per MHz at the recently concluded auction was $21 million.

As per 3G license, BTRC has conveyed that 3G cellular mobile phone service operator shall be eligible to provide 4G LTE service using the same spectrum block for 3G services. Being the first operator to launch 4G in India, Airtel can think of starting 3G and 4G services using the spectrum  band in few select cities thereby giving customers a differentiated offering of increased data speed and differentiated offering.

Mobile Phone Subscriptions in Bangladesh (end July, 2013) 

Grameen Phone – 106.9 mn (market share – 42 percent)

Banglalink – 44.7 mn (market share – 26 percent)

Robi Axiata – 23.8 mn (market share – 22 percent)

Airtel Bangladesh – 7.9 mn (market share – 7 percent)

Teletalk Bangladesh – 1.9 mn (market share – 2 percent)

Pacific Bangladesh Telecom – 1.4 mn (market share – 1 percent)

Source: BTRC

The 3G spectrum auction in Bangladesh saw participation from four winning operators and Pacific Bangladesh Telecom (Citycell). CityCell has not bagged 3G license in the recently concluded 3G auction.

It would be interesting to see who takes lead in 3G as everybody starts afresh. Grameen Phone has an advantage in comparison to others as it has a captive base of 107 million subscribers. On the other hand Airtel Bangladesh has around 8 million subscribers and the company has to focus a lot on getting subscribers from other networks.

Having bagged 3G license, it seems Airtel Bangladesh would have changed its selloff strategy and the focus will be more on deploying 3G before other operators launch their services. This will help in increasing their subscriber base and also help them in the valuation game at a later stage.














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