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Says UCB Asset Management in new report
Ahsan Habib
Thu Nov 4, 2021 12:00 AM Last update on: Thu Nov 4, 2021 12:49 AM
Bangladesh's telecom sector is expected to thrive in the current decade on the back of a spike in demand for mobile data, according to a new report.
Mobile data subscribers are expected to more than double by 2030 thanks to a change in lifestyle during the coronavirus pandemic, rural inclusion, massive usage of social media, diverse digital content, peoples' higher income level, and so on, said UCB Asset Management in the report.
As a result, unique mobile data subscribers may go up to 11.8 crore from 4.7 crore in 2020, said the Bangladesh Telecom Sector Outlook in the Fresh Decade.
The fund management company finalised the report on the basis of research and estimates. The report will be made public today.
"Over the past few years, increased social media usage has driven the rise in data consumption. The global pandemic has introduced more people to diverse usage of internet than just for building connection and entertainment," said Farheen S Rahman, an investment analyst of UCB Asset Management.
"Thus, a new era of diverse data utilisation has already begun."
Mobile data usage per smartphone rose to 3.6 gigabytes per month in the first half of 2021, up from 2 GB in 2020, according to the report.
Bangladesh, however, lags India by a large margin as the usage of data per smartphone per month in the neighbouring country was 13.4 GB last year.
The diverse use of internet and the rising adoption of mobile internet services will give an upswing to mobile data subscribers in Bangladesh, said Rahman.
The number of unique mobile internet subscribers has risen by 10.4 per cent annually since 2016. With an expected annual growth of 9.6 per cent, the figure is likely to reach 11.8 crore by 2030.
At present, there are 4.76 crore internet users in Bangladesh, representing 28.8 per cent of the population.
The number of unique mobile phone subscribers stood at 9 crore in December 2020, and the report says there is ample opportunity for onboarding more users in the coming years.
The expected growth will come from the younger generation and the people who currently live below the poverty line.
There are 2.8 crore youths aged below 10 as well as 3.4 crore people living below the poverty line, and a majority of them don't use mobile phones at the moment, according to the report.
"With these growth drivers foreseeable in the next decade, the number of unique subscribers is expected to be 12.7 crore in 2030."
The report also analysed the social media segment.
In Bangladesh, the total number of active social media users was 4.5 crore at the beginning of 2021. Of them, 98.8 per cent access the services through mobile devices. A proliferation of digital Bangla content on YouTube and over-the-top platforms accelerated data usage.
"E-learning, gaming and apps have gotten popular among young people," Rahman said.
The Covid-19 pandemic, which necessitated social distancing, has turbocharged the use of internet and social media. Because of the crisis, people's screen time has risen. People use internet to work, communicate, learn and get entertained.
As of December 2020, the fourth-generation network in the country covered 95 per cent of the entire population.
However, 67 per cent of them still do not use mobile internet.
As a result, Bangladesh has the highest usage gap compared to peer countries. This, however, offers the scope to give a boost to raise data revenue, said Rahman.
The penetration of 4G-enabled handsets is low due to the burden of adopting 4G-enabled SIM cards and their higher prices.
Consumers have to pay a 57 per cent tax on imported smartphones. Despite the production of handsets locally, 20 per cent of the total mobile phones are still required to import.
The local assembly of smartphones, by both local and foreign companies, and better coverage are bringing more people under the telecommunication service.
In 2017, Bangladesh was ranked the third-largest video game market in South Asia, worth $62 million. With increased smartphone penetration and people acquiring knowledge and skills to develop games, Bangladesh can experience huge growth from the mobile gaming industry in the coming decade, the report said.
E-learning platforms will continue to grow because they offer opportunities to students and job-seekers to learn, improve and be competitive in the real world.
"Furthermore, the growing popularity of diverse mobile apps signals increasing mobile data usage. Social media, lifestyle, educational, recreational, gaming, business communication, MFS, or e-commerce—all sectors have begun to use apps to provide a better customer experience."
In Bangladesh, the telecom industry comprises mainly three major players: Grameenphone, Robi and Banglalink. They enjoyed a compounded annual revenue growth of 5.5 per cent in the last five years, reaching $3.2 billion in 2020.
"The number of subscribers and the adoption of 4G network will be the two major drivers of the telecom industry," said Rahman.
By 2025, the 4G penetration is expected to increase to 54 per cent of the total connections. Along with 6 per cent 5G coverage, fewer people will be dependent on 2G and 3G networks.
About the challenge of the industry, the report says, no regulation on data pricing leaves the industry at the risk of losing data revenue gain.
"Alongside, strict regulations on taxation put the telecom sector industry in hardship."
The tax contribution of the telecom sector was 44 per cent of its revenue in 2019 as compared to the 24 per cent in the Asia Pacific.
"The heavy tax hurts the industry and lowers the scope of heavy investments."
Ahsan Habib
Thu Nov 4, 2021 12:00 AM Last update on: Thu Nov 4, 2021 12:49 AM
Bangladesh's telecom sector is expected to thrive in the current decade on the back of a spike in demand for mobile data, according to a new report.
Mobile data subscribers are expected to more than double by 2030 thanks to a change in lifestyle during the coronavirus pandemic, rural inclusion, massive usage of social media, diverse digital content, peoples' higher income level, and so on, said UCB Asset Management in the report.
As a result, unique mobile data subscribers may go up to 11.8 crore from 4.7 crore in 2020, said the Bangladesh Telecom Sector Outlook in the Fresh Decade.
The fund management company finalised the report on the basis of research and estimates. The report will be made public today.
"Over the past few years, increased social media usage has driven the rise in data consumption. The global pandemic has introduced more people to diverse usage of internet than just for building connection and entertainment," said Farheen S Rahman, an investment analyst of UCB Asset Management.
"Thus, a new era of diverse data utilisation has already begun."
Mobile data usage per smartphone rose to 3.6 gigabytes per month in the first half of 2021, up from 2 GB in 2020, according to the report.
Bangladesh, however, lags India by a large margin as the usage of data per smartphone per month in the neighbouring country was 13.4 GB last year.
The diverse use of internet and the rising adoption of mobile internet services will give an upswing to mobile data subscribers in Bangladesh, said Rahman.
The number of unique mobile internet subscribers has risen by 10.4 per cent annually since 2016. With an expected annual growth of 9.6 per cent, the figure is likely to reach 11.8 crore by 2030.
At present, there are 4.76 crore internet users in Bangladesh, representing 28.8 per cent of the population.
The number of unique mobile phone subscribers stood at 9 crore in December 2020, and the report says there is ample opportunity for onboarding more users in the coming years.
The expected growth will come from the younger generation and the people who currently live below the poverty line.
There are 2.8 crore youths aged below 10 as well as 3.4 crore people living below the poverty line, and a majority of them don't use mobile phones at the moment, according to the report.
"With these growth drivers foreseeable in the next decade, the number of unique subscribers is expected to be 12.7 crore in 2030."
The report also analysed the social media segment.
In Bangladesh, the total number of active social media users was 4.5 crore at the beginning of 2021. Of them, 98.8 per cent access the services through mobile devices. A proliferation of digital Bangla content on YouTube and over-the-top platforms accelerated data usage.
"E-learning, gaming and apps have gotten popular among young people," Rahman said.
The Covid-19 pandemic, which necessitated social distancing, has turbocharged the use of internet and social media. Because of the crisis, people's screen time has risen. People use internet to work, communicate, learn and get entertained.
As of December 2020, the fourth-generation network in the country covered 95 per cent of the entire population.
However, 67 per cent of them still do not use mobile internet.
As a result, Bangladesh has the highest usage gap compared to peer countries. This, however, offers the scope to give a boost to raise data revenue, said Rahman.
The penetration of 4G-enabled handsets is low due to the burden of adopting 4G-enabled SIM cards and their higher prices.
Consumers have to pay a 57 per cent tax on imported smartphones. Despite the production of handsets locally, 20 per cent of the total mobile phones are still required to import.
The local assembly of smartphones, by both local and foreign companies, and better coverage are bringing more people under the telecommunication service.
In 2017, Bangladesh was ranked the third-largest video game market in South Asia, worth $62 million. With increased smartphone penetration and people acquiring knowledge and skills to develop games, Bangladesh can experience huge growth from the mobile gaming industry in the coming decade, the report said.
E-learning platforms will continue to grow because they offer opportunities to students and job-seekers to learn, improve and be competitive in the real world.
"Furthermore, the growing popularity of diverse mobile apps signals increasing mobile data usage. Social media, lifestyle, educational, recreational, gaming, business communication, MFS, or e-commerce—all sectors have begun to use apps to provide a better customer experience."
In Bangladesh, the telecom industry comprises mainly three major players: Grameenphone, Robi and Banglalink. They enjoyed a compounded annual revenue growth of 5.5 per cent in the last five years, reaching $3.2 billion in 2020.
"The number of subscribers and the adoption of 4G network will be the two major drivers of the telecom industry," said Rahman.
By 2025, the 4G penetration is expected to increase to 54 per cent of the total connections. Along with 6 per cent 5G coverage, fewer people will be dependent on 2G and 3G networks.
About the challenge of the industry, the report says, no regulation on data pricing leaves the industry at the risk of losing data revenue gain.
"Alongside, strict regulations on taxation put the telecom sector industry in hardship."
The tax contribution of the telecom sector was 44 per cent of its revenue in 2019 as compared to the 24 per cent in the Asia Pacific.
"The heavy tax hurts the industry and lowers the scope of heavy investments."
