Lack of efficient management, a proper marketing plan, investment and a strong network, as well as endless bureaucratic red-tape have resulted in making Teletalk, the state-run mobile operator, a burden for the Bangladesh government.
Since becoming a public limited company in 2005, Teletalk has consistently failed to turnover a profit and has also neglected to pay its dues to the Bangladesh Telecommunication Regulatory Commission (BTRC) for years, racking up Tk1585.13 crore in fees.
Till date, the company has invested Tk3,000 crore in operations and has made a net loss of around Tk400 crore.
According to Abu Sayeed Khan, senior police fellow of LIRNEasia, a Colombo based ICT thinktank, Teletalk has failed purely because it is owned by the government. Using BRTC and Biman as examples, he stated that any business entity that is run by the government is bound to fail.
With government bureaucrats of different ministries making up the board of directors with the Telecommunication Division Secretary as the chairman and other government officials holding all the top level positions, it is little wonder that Teletalk has been an unsuccessful venture, said Khan.
Since none of the top level administration or the board of directors have proper telecommunication or business backgrounds, it is hardly surprising that the organisation does not have a proper marketing plan or business strategy, he explained.
Teletalk’s first mistake came soon after it launched its first mobile packages in 2005 when it began operations without first doing a proper market survey.
At the time, it had projected sales estimates of 2.5 million SIMs. The reality was vastly different. They ended with a number of subscribers closer to 5 million. This caused the company to hastily take measures to provide another million or so SIMs.
Irrespective of the comparative edge that Teletalk enjoys over all other telecommunication companies, namely that it is given extra consideration by the government, it has still consistently failed to take advantage of its situation.
In 2012, Teletalk was given permission to launch 3G operations, a full year before the formal auction was announced to grant 3G capacity to telecom operators. Even with the time lead, Teletalk failed effectively market their 3G connections and gain a solid consumer base.
During the 2013 3G auction, four private operators paid $20m each for per Mhz 3G spectrum and also deposited a total of $80m to the BTRC to participate in the auction.
The state-owned operator, however, was not required to pay any amount of money and was even allowed to run 3G operations a year before the rest.
Its second mistake was when, with a budget of only Tk1,500 crore, Teletalk was unable to properly extend their 3G services throughout Bangladesh due to constraints in finances, according to an official of the state-owned mobile operator.
Coming into the 3G game a year later, other mobile operators only took a year and a half to cover all the district headquarters and upazilas in Bangladesh.
The third strike against Teletalk was the allegations that it was involved with VoIP (voice over internet protocol) and had allowed a huge volume of illegal international calls. To that end, back in 2005, around 5 million SIMs of the telecom had been blocked.
Then comes the money.
“Financing has also been a major obstacle for Teletalk. Regardless of the company authorities procure finances from the company’s own funds or borrow from a foreign bank, Teletalk’s money has not been well handled,” said a top official of Teletalk.
Teletalk owes Tk94 crore, which it took from customers, to the government exchequer. It also spent Tk8.40 crore to pay staff salaries and Tk8 crore on advertising.
Though BTRC frequently reminded Teletalk to pay its long-standing dues, the operator repeatedly ignored the reminders.
Ex-managing director of Teletalk, Giasuddin Ahmed’s only stance was that the matter of dues was between BTRC and Teletalk, and the government would need to work it out.
Despite its financial issues, Teletalk is attempting to move forward with operations, now with a target of providing 4G services for which it has already allocated Tk4,600 crore. However, now, the main disadvantage of being a government-run organisation has revealed itself: the bureaucratic red-tape.
While other operators are gearing up for 4G, Teletalk has yet to gain approval for the project.
Teletalk Acting Managing Director Kazi Golam Kudduch said: “We hope to be able to improve our services, especially since our state minister of Post and Telecommunication seems so sincere about it.”
When assuming office as State Minister for Posts and Telecommunication, Tarana Halim had told journalists that the government would make the organization both profitable and popular.
During her tenure, the government has already approved a 3G network expansion project of Tk675.81 crore which will be completed by December, 2017.
As part of her plan, all the highways of the country and 64 district headquarters will have 3G service, and the number of retailer points will be increased from 39,000 to 77,000.
Twenty new customer care points will also be opened. By 2018, all upazilas will also have 3G service.
Since 2016, Tarana has tried to garner foreign investment from Singapore, Malaysia and India to no avail. Though Indian business conglomerate Tata originally showed interest in investing in Bangladesh’s telecommunication industry, it has yet to take a step toward that end.
Despite Tarana’s plans, the lack of positive feedback from foreign investors and the dire state that Teletalk appears to be in, suggest that the state-run telecom’s days may be numbered.