Broadband auctions could drive further growth in Bangladesh

The Bangladeshi telecommunications market harbours significant growth potential in light of the low penetration rates, according to Research & Markets. Further, operators so far have been able to only offer basic 2G services as the regulator has yet to auction 3G licences, which is scheduled to take place in late 2012.

Assuming that the auction proceeds smoothly, the Bangladeshi broadband market will also receive a boost, thereby spurring growth and investment in industries that require reliable high-speed internet connectivity.

Pacific Bangladesh Telecom, which markets under Citycell, has announced that it plans to spend BDT16bn to switch from CDMA technology to GSM due to continuous bad performances in light of technology limitations. Assuming that the operator receives regulatory approval, the long-awaited change should help bolster Citycell's outlook as it would allow subscribers of rivals firms to migrate to its network easily.

Bangladesh's finance minister has proposed the implementation of a 2% tax on mobile prepaid and postpaid subscribers in order to help fund government subsidy programmes on areas such as food and fuel, and prevent the country's fiscal deficit from widening. While the levy is not substantial, industry growth could be hindered by consumers – particularly low-income subscribers – scaling back on mobile expenditure.

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