Although working in the telecommunication industry is not new to me, working in Bangladesh is. Since joining Grameenphone, over the last eight months, it has been an exciting experience so far for me. Being on the ground with some major development phases in the Indian telecom sphere, I have a bit of a time machine effect regarding how some of the upcoming developments of Bangladesh’s telecom market will shape up. This will help me immensely in value extraction for Grameenphone and strengthen its market position further.
The first thing that hits you when coming into this country is that the people are so warm and friendly in their communication. Bangladeshis seem to have a strong innate desire to stay connected and the mobile phone has now become their favourite means of interaction. In my mind, this relation creates an interesting dynamic for the operating telecommunication companies in Bangladesh.
With a population of approximately 166 million, more than 123 million mobile phone connections bring positive changes in their daily lives. This says a lot about a country where the first GSM connection was made available in 1997. This also signals the scale of the challenge for operators to offer affordable as well as relevant products and maintain service quality.
A population density of 1,155 per square kilometre and robust GDP growth are the most lucrative features of the country for telecom business. Over the years, this has evolved to a 99% prepaid market of six operators with less than a $2 annual revenue per user (ARPU).
Intense competition is another vital element of the industry which mandates innovation and service quality to be at the forefront. This calls for operators to focus on efficiency and transparency in order to create value for the shareholders. As the leading telecom operator, we at Grameenphone give utmost emphasis on both the aspects by gradually embedding them in our core values and day-to-day business operations.
In the realm of decelerating voice minutes growth, inflationary pressure, organic growth of cost drivers, unstable political environment, and competition, a structured approach in generating efficiency is the tool on which Grameenphone highly concentrates. Our average operating expense margin of 40% and EBITDA margin of 52% over the last three years is a testimony of that. To achieve this, we do periodic cost benchmarking with a globally reputed consultant AT Kearney which helps us to identify various areas of operations where we require concentrating on figuring out the scope of improvements.
As part of Telenor group operating in 13 markets, we have strong collaboration within the business units to leverage on learning and synergies. Robust operating expense management process with focus on granularity also helps us in driving this. The efforts put forth create even greater momentum with the active involvement of organisation-wide critical process owners. This way, GP is managing to embed the structured program into the way of work. One of our core values, Make it Easy, also paves the way of achieving greater efficiency by constantly looking for avenues of simplicity.
Another soft but very powerful element of business operations is transparency, on which Grameenphone has considerable focus. To me, it is simply inculcating a very powerful human element, that is honesty, in the way we conduct our business. Transparency is also about timeliness and accuracy of all the communication platforms in Grameenphone. Substantial efforts made here will build and reinforce confidence of shareholders and other relevant stakeholders over the company.
Our corporate governance structure and strong commitment of adherence to it by employees, management, and the board also ensures that we conduct our business in a transparent manner. We believe that commitment towards it will build trust upon us and instigate loyalty of our customers and stakeholders. Although we are not listed in the US stock market, we still use their reporting standards to maintain higher transparency.As the largest listed entity of the country, our transparent investor communication platform helps us in bridging the information gap between management and the investment community.
Playing in a hyper-active market, transparency at times may result in diminishing competitive advantages often referred to as Transparency–Trap. But this phenomenon also comes with an opportunity of a lesson to be innovative constantly. To me, this is a very strong chain reaction that we embrace with an open mind and strive for innovation.
We managed to cross two monumental milestone of a 50 million subscriber base with more than Tk10,000cr revenue last year through our enduring commitment of offering innovative and customer centric products and services. Our efficiency and transparency initiatives throughout the company added value to this achievement. We look forward to initiatives directed towards further efficiency and transparency.