News From Telecom World

SIM sales drop as operators cut subsidy in Bangladesh

Posted on: April 6, 2009

The sale of the mobile phone’s SIMs has slowed down remarkably as the major operators withdrew the subsidy on the SIM tax considerably.

Leading operators Grameen Phone and Banglalink, enjoying more than 50 per cent share of the country’s cellular phone market together, have already withdrawn major portion of the subsidy on the SIM tax in recent months.

A Grameen Phone official on condition of anonymity told New Age that most of the cell phone operators were struggling to minimise their operational cost.

‘Nowadays, they (operators) are targeting the rural areas to tap new subscribers as the cell phone users in the urban areas have reached the saturation point,’ he said.

It is difficult to provide subsidy on the SIM tax to tap new rural subscribers as additional investment is needed to expand infrastructure in the rural areas, he added.

An official of the Warid said his company was taking Tk 300 from a subscriber and providing subsidy of Tk 500 on sale of new SIM.

The subsidy is expected to be reduced in the coming months as it is struggling hard to maintain the subscribers, he added.

Only 5,70,000 new cell phone subscribers were added in the last three months till February, according to officials of the Bangladesh Telecom Regulatory Commission.

The National Board of Revenue had fixed Tk 800 as tax on the sale of a new SIM for the last three years, which was initially Tk 1,300.

The growth in sale of SIMs was over 100 per cent in the last two years as the number of mobile connections reached at 44.46 million in 2008 from 21.88 million in 2006.

The growth will decline further in the coming months as the small operators including, the state-owned Taletalk, which are still providing more than 50 per cent subsidy on the SIM tax, are set to follow the major operators, sources said.

‘The SIM tax is a burden for the operators,’ said Fazlur Rahman, president of the Association of Mobile Telecom Operator in Bangladesh.

He said an additional 30 million subscribers could still be tapped if the NBR withdrew SIM tax and the association had already urged the NBR for this.

Admitting the fact that the revenue generation from the SIM tax has declined substantially due to slow growth in installing new mobile phone connections, the NBR chairman, Abdul Mazid, said they were reviewing the proposal of the mobile operators.

The NBR chief said there might be other reasons besides the SIM tax for the slow growth in sale.

Source: New Age

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