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MONDAY, OCTOBER 02, 2023
Covid-19 and its impact on the telecom sector of Bangladesh

Thoughts

Arijit Chakraborti
22 July, 2020, 11:25 am
Last modified: 22 July, 2020, 01:07 pm

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Covid-19 and its impact on the telecom sector of Bangladesh

The adverse economic impact of the pandemic has affected the disposable incomes of the people and many have decided to reduce the number of mobile subscriptions

Arijit Chakraborti
22 July, 2020, 11:25 am
Last modified: 22 July, 2020, 01:07 pm
Covid-19 and its impact on the telecom sector of Bangladesh

The Covid-19 crisis is continuously causing widespread concern and economic hardship for consumers, businesses, and communities worldwide. Along with the rising number of infections across the globe, the crisis and its impact have been rapidly evolving.  

While business leaders have spent a majority of the last four months responding to the crisis, now it's time that they focus on resuming business operations in the post-Covid-19 era.

Covid-19 has significantly impacted the telecom sector of Bangladesh. According to subscription data published by the Bangladesh Telecommunication Regulatory Commission (BTRC), the total number of mobile subscribers has declined consistently between March and May 2020.

The telecom operators lost more than 46 lakh subscribers between February 2020 (when it reached an all-time high) and May 2020. Meanwhile, in the same period, the number of mobile internet subscribers remained consistent, with no major fluctuations.

On the other hand, the number of internet users who subscribed through other mediums such as fixed-line broadband connections increased by 41 percent during the same period.

While each telecom operator may have a specific analysis to evaluate its respective business impact during the quarter when the pandemic intensified, we can derive certain inferences based on the data published by the BTRC.

From the above-mentioned data, it is evident that the usage of internet in Bangladesh has increased between March and May 2020. It can also be inferred that a good number of internet users have shifted to use fixed-line connections as a replacement or in addition to their mobile internet connections.

But it is not clear whether mobile telecom operators could capture this opportunity and increase their per subscriber data usage. Once the mobile telecom operators analyse their average revenue per user (data-ARPU) from data consumed each month, they will be able to understand how much additional data was consumed through their internet subscription packages.

It is also important to understand the reason behind the churn rate of customers that resulted in a drop in the total subscriber count. One of the reasons for the drop could be that subscribers who have multiple subscriptions discontinued all other operators and started using only one subscription.

The adverse economic impact of the pandemic has affected the disposable incomes of the people and many have decided to reduce the number of mobile subscriptions. The other possible reason could be that a good segment of the low-income population slipped into poverty and had to suspend their subscriptions due to their inability to recharge.

While both these hypotheses could be true, the actual reasons for the drop-in subscriber numbers could vary from one operator to another. Once the business leaders of mobile operator companies conducted a data-driven analysis of their operational performance between March to May (and for each week of those months if they have robust data analysis tools), they will be able to generate better insights.

The Covid-19 pandemic has significantly altered the ways of working for many workers, particularly those who perform desk jobs. As the pandemic spread worldwide, organisations shifted towards the work from home (WFH) model, and the shift is continuing globally, including in Bangladesh. The ongoing shift towards remote work is expected to drive demand for networking infrastructure and connectivity in the coming months.

However, the demand could also strain the system and lead to public perception issues if the services do not meet the desired expectations. It is important to see how telecom operators in Bangladesh address this increasing demand and manage to retain a good number of high-ARPU customers. To achieve this, operators must upgrade their existing infrastructure to provide highly efficient services to the customers.  

In this context, their competition is not necessarily with other mobile telecom operators, but with fixed-line internet service providers.

According to data published by the BTRC, fixed-line subscribers account for just about 8 percent of the total internet subscriber base in Bangladesh. However, the low percentage of fixed-line subscribers should not make mobile network operators complacent, since the high data-ARPU customers are likely to shift towards fixed-line connections. Mobile telecom operators need to strategise for the coming months to compete with fixed-line operators.  

It will be important for telecom companies to look at customers in the wake of the Covid-19 crisis and address their specific requirements. For example, cancellation of domestic and international travel has resulted in a sharp increase in voice and data communication.

The International Blockchain Olympiad was held virtually in July and teams from many countries, including Bangladesh, participated. The teams representing Bangladesh won two of the total six awards.

The participation and eventual victory in a global technological event demonstrate that a tech-savvy group of users is fast emerging in Bangladesh and their expectations from communications service providers will be commensurate to their global aspirations and accomplishments.

Such users would also expect globally benchmarked services in many areas, including data communications. Mobile telecom operators of Bangladesh should start designing their products, services and price points while focusing on the needs of the such emerging tech-savvy user groups.

Mobile telecom operators in Bangladesh also operate under a comprehensive regulatory regime. There are restrictions in owning tower infrastructure and laying fibre optic cables.  The role of high-quality communication infrastructure is very important in the post-Covid-19 world.

Increasing use of voice and data will result in a higher demand for quality infrastructure, particularly towers and optical fibre network. Each mobile telecom operator must collaborate with licensees in the respective fields of infrastructure provisioning to ensure that the infrastructure is regularly updated, upgraded and optimised to deliver the best possible services to end customers.

In our regulated telecommunication ecosystem, the successful collaboration will be the key to deliver the best services to customers. The regulator should also play a catalytic role to facilitate and foster such collaboration.

The telecom sector is a people-intensive industry, comprising a seasoned workforce that includes teams in offices, transceiver stations and retail stores. When such a diverse workforce is compelled to work remotely or from home, their productivity and quality of services provided by them may get impacted significantly. Moreover, some elements of work are difficult to convert to a format suitable for remote working or WFH and some cannot be converted at all.  Business leaders of telecom companies should also focus on how to keep their workforce safe and motivated as the economy moves towards a post-Covid-19 environment.

Mobile network operators in Bangladesh need to assess their business situation during the Covid-19 crisis and make strategic choices to create value for their customers and themselves. A clear strategy aligned with the growth potential of Bangladesh will help operators in achieving that goal.

The writer is Partner at PwC. The views expressed here are personal.

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Telecom / telecom sector / Bangladesh / COVID-19 in Bangladesh

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