Bangladesh enjoys a staggering mobile phone penetration. Unique mobile phone subscribers stood at 85 million at the end of 2017. It is the 5th largest mobile market in the Asia Pacific and eighth largest in the world. According to GSMA, there were 145 million connections in 2017.
In many ways, Bangladesh is a mobile-first nation. Many of the major consumer-facing technology services starting from MFS to the internet in Bangladesh are stories of mobile. According to BTRC, there are over 140 million mobile phone users in Bangladesh. The tremendous growth in mobile phone penetration is expected to influence the internet usage and usage of digital services.
However, a new report from GSMA, the global body of mobile phone operators, suggests a different story. The report says, only 21% of Bangladeshis use mobile internet which is lowest in Asia Pacific region. The only country that has similar penetration is Pakistan.
Countries like Nepal and Myanmar, despite having lower per capita GDP compared to Dhaka, maintain a higher mobile internet penetration.
Bangladeshi has just introduced 4G in the country which means internet speed and quality both are expected to improve. But it does offer much hope given the previous record with 3G penetration.
The report says 71% of the mobile phone subscribers were using 2G at the end of 2017, despite almost 90% 3G network coverage. It also finds that the majority of subscribers in Bangladesh primarily use their phones for basic voice and SMS services.
Digital has been getting a lot of attention over the last couple of years in Dhaka. There has been a rigorous discussion on the progress made in the areas of ensuring access to digital services. The country has also been seeing a slow but steady growth in various digital services.
Similarly, many providers of these digital have also been struggling with growth and penetration. The report to some extent validates the reality in the market.
The report finds that Bangladesh lacks in terms of infrastructure and affordability which hamper the growth of mobile internet usage. “The enablers critical to creating the right conditions for mobile internet connectivity to flourish rank low in Bangladesh, despite the progress made in recent years.”
It finds that in many instances, a user in the bottom 20 percent by income distribution require spending approximately 11 percent of their monthly earnings in Bangladesh to buy a medium consumption basket of 1 GB of data which is significantly above the affordability threshold set by the UN.
One of the key reasons behind the high price of mobile internet in Bangladesh, the report says, is high levels of taxation and fees applied to the mobile sector and unfavorable policy and pricing for related services and technologies for the sector.
Such as limited allocation of 3G spectrum in Bangladesh and unfavorable price in previous auctions have had a significant negative impact on the quality of mobile services.
The report recommends a “forward-looking policy environment” that would help the industry to flourish. “A forward-looking regulatory environment will help boost the uptake of mobile internet services,” finds the report.
As identified by the report, price and quality remain two of the main challenge towards the adaptation of mobile internet in the country.
Beyond doubt, there are rooms for significant regulatory and policy improvement. Taxation needs to be more favorable. Technology related regulations need to be made with long-term consideration.
At the same time, it can’t be denied that telecom operators in the country also have responsibilities to bear.
Consumers often complain about subpar service, ambiguous and absurd packages from operators. If the operators also pay attention to offering quality services and better offers, it will certainly help the growth.
Cover photo credit: GSMA Bangladesh Country Overview Report
