Innovative solutions to drive Telcos' future: GP CEO

When the highly profitable core business of cellular voice calls slowed down and the booming mobile internet became a high cost, low-margin service, innovative ICT-based solutions and digital services beyond the core for individuals and enterprises emerged to be the future of telecom operators, said Grameenphone CEO Yasir Azman. 

"There is a challenging business environment, and the telco industry is going through a transition," he said in an interview with The Business Standard.

"Once, our voice revenue had been growing at a 20%-30% rate, now it is flat to negative."

According to the first homegrown CEO of the country's leading telecom operator, with the mobile internet boom, people are increasingly using online apps for voice calling and the demand for cellular voice is declining all over the world, thus threatening the industry's once lucrative core business.

On the other hand, the demand for mobile internet data is still growing, despite an ongoing shift towards cable broadband. But, the profit margin here is very low as the industry highlights the high spectrum prices and taxes in Bangladesh in comparison to peer countries.

His company recently launched eight IoT (Internet of Things) devices and a single app - Alo - to offer smart solutions to modern life problems. They include precise online tracking of vehicles, objects or people, smart electric switches and sockets, gas and smoke detectors for home safety that can be distantly operated from smartphones.

Users would be paying the telecom operator a monthly revenue for the "services to meet the customers' expectations for their easier, healthier, safer and happier digital lifestyle."  

"We have gone through a transformation, trying for huge efficiency by reducing costs in operations so that we can continue investments for innovations to bring new products and services in the digital space," said Azman.

Sustainability at the centre  

The transformation, innovation – all are for the sake of sustainability.

Grameenphone, an enabler of Digital Bangladesh, has long been focused on social impacts of its business and it has already emerged as the environmental, social and governance (ESG) champion among the publicly listed companies.

In the Bloomberg ESG table, GP secured an ESG score of 39.6 this year on a 0-100 scale, which is the highest among the Bangladeshi firms.

"The acknowledgement is motivating for us as we have been working year on year for long in a disciplined manner for sustainability," Azman said.

For instance, the company trained 23 lakh children and 2 lakh parents and teachers for online safety. Supporting the youth and startups in skills development, helping the marginal population to overcome the digital divide, and women empowerment are some key areas the company has strong roles in.

Switching to renewable energy would be a big part of the national drive for environmental sustainability, he said, adding that the private sector needs supportive policies, their implementation and the incentives for their efforts.

"Corporates using more renewable energy would be stronger in business, attract foreign investments," he said, adding that $15 trillion global funds would be investable in 2025 and sustainable businesses can grow using such funds.

Sustainability moves will make a firm more efficient, cost-effective and that will force one to think differently, innovate and secure a competitive advantage.

Call for rational taxes

The telecom industry, despite being an essential service provider, is paying 40% corporate tax while the effective tax rate is at around 70% when value added tax, service duties and turnover tax are included. Also the price of spectrum is higher in the country.

In neighboring countries, corporate tax on telecom operators is not more than 20-25%, said Azman, adding, "The industry needs either tax rationalisation or spectrum at low prices."

"We have been working with the telecom regulator constructively and with mutual respect to remove the barrier to mutual growth."

"Two successful spectrum auctions in the past two years were exemplary. We should further build on such constructive work."

The digital progress of Bangladesh had been significant in terms of how the government services, education, healthcare, agriculture was evolving through the use of technology and Grameenphone remains committed to be a big part of the country's journey towards future leveraging analytics, artificial intelligence, IoT to remove inequalities and barriers.