Bringing all under 4G coverage top priority of Banglalink: VEON CEO
The Bangladesh Telecommunication Regulatory Commission (BTRC) is set to hold a spectrum auction for the fifth-generation (5G) mobile and internet connectivity on 31 March, aiming to roll out the service across the country by next year.
Kaan Terzioglu, group chief executive officer (CEO) of VEON, the parent company of Bangladesh's third-largest mobile network operator Banglalink, however, feels ensuring 4G for all should be Bangladesh's main focus at the moment.
In an exclusive interview with The Business Standard during his recent four-day visit to Dhaka, Kaan Terzioglu said Banglalink prioritises making 4G connectivity available for all over ensuring 5G access for a few.
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"As we belong to an industry, we have a mission to compete with others by taking mobile internet to rural areas, villages, and to every single citizen," he said, adding, "I'm not a big fan of the vanity of 5G. It sounds good, but the reality is over 50% of smartphone users in the country are still out of 4G coverage. That means we have to continue to make efforts for the next two to three years to bring all smartphone users under 4G coverage."
Asked about the implementation of the 5G technology by Banglalink, Kaan Terzioglu said, "Of course, we will invest in 5G when necessary. But we will invest in it for industrial purposes, not for consumer purposes.
"Of course, the upcoming auction is an important event. I'm very glad that finally, Bangladesh is putting the spectrum in use because we were a little bit too prudent on the way we lease spectrum."
On 31 March, the BTRC will auction 200MHz of the spectrum from 2.3GHz (2300-2400 MHz) 2.6GHz (2500-2690) bands, and the floor price per MHz spectrum is set at $6 million.
Speaking about the total amount of spectrum, Kaan Terzioglu said "This one is a good amount of spectrum. I'm very glad to see that the prices are more reasonable."
Banglalink has won the Ookla speed test award four consecutive times and the mobile operator's 4G download speed was found comparatively better when compared to other major operators in the recent quality of service survey conducted by the BTRC.
Commenting on that, the Group CEO of VEON said, "I'm very proud of our team here, and for their services in terms of deploying the network, increasing customers' satisfaction, and increasing the quality of the network."
He said the last two years have been great years for Banglalink as it could increase its market share in Bangladesh. The telecom operator looks to take a leadership position by expanding the 4G network in the next two years.
Kaan opined that mobile internet is the cheapest in Bangladesh.
"The price of a cup of espresso in Europe is $1.5. Entire month's mobile internet services are provided in Bangladesh at a price less than an espresso," he said.
"I don't complain about this, I consider this an achievement."
Talking about the voice call price, he said "If we consider this as a combination, the monthly cost of having a phone and using voice and data services, the rate the lowest in Bangladesh."
"If you look too specifically at voice and data, it will be overcomplicating the details of the pricing in the Bangladeshi market. As you know, voice services today is a market which is getting smaller and smaller day by day."
Banglalink aspires to get listed on the capital market within three years
Among three private mobile operators, market leader Grameenphone and the second largest operator Robi Axiata Limited have already entered the capital market.
Banglalink, being the third-largest mobile operator, also is eying to hit the capital market and exploring the possible scope.
During his recent short visit to Bangladesh, Kaan Terzioglu met the security exchange commission high-ups to discuss the prospect of the operator's enlistment on the capital market.
"We have the aspiration to get listed and we have met security exchange commission's officials to explore the opportunity," said Kaan.
Asked by when the company looks to get listed, Kaan Terzioglu said,
"It is too early to say the exact timeline. However, I think three years is the right time frame to consider for preparing ourselves."
A high tax regime
Kaan Terzioglu's career spans over 30 years in regional and global leadership roles in management consultation, technology, and telecommunications.
Comparing the tax regimes of different countries, he said the taxation burden on the industry in Bangladesh is one of the highest in the world.
At present, mobile operators in the country have to pay around 45% different types of tax.
"As a foreign investor, we are very happy here. But lowering the tax burden on the industry will help Bangladesh because we still need to penetrate everyone in the country and that can happen only by making lower indirect taxation," he said.
"If you look at emerging markets which are taxing the industry, the lower size is around 24% and countries like Kazakistan would be there that are prioritising rural internet deployment," he said.
He termed the provision of minimum tax in Bangladesh a "unique case" in the world.
"Every country has the sovereign right to decide its taxation system. But investors will come only if they see profitability," he said.
The need for more flexible regulation
Once mobile operators used to build towers and install fibre optic cables on their own. But in recent years, mobile operators are being barred from these activities and the authority has been handed over to separate entities.
Talking about that, Kaan said, "I wish we were given more flexibility in deploying fibre optic cables and sharing optical fibres among operators here in Bangladesh."
"Huge capital is needed for building a fibre optic network. The more we share it, the better it is for the industry," he observed, adding they are looking forward to regulations that will encourage sharing the fibre optic and tower infrastructures in a more effective way.
Bangladesh is very densely populated, he mentioned, adding that fabrication is very important in such an environment.
"In the new business model, every single operator cannot have an exclusive network. We need to learn how to share the network to serve the customers in a better way.
"I believe speed of the network and quality of the network can improve over time by making more spectrum available for 4G, by making network sharing possibilities among the four operators.
Banglalink won't sale raw data in the future
Prior to joining VEON, Kaan served as the chief executive officer at Turkcell from April 2015 to March 2019. During his tenure, he led the company's successful digital transformation.
Sharing this experience, Kaan said there is a transition in the industry and companies operating in traditional methods will not survive the transition.
A conventional company sells minutes, gigabytes, and SMSs. A digital operator provides digital services, supports the lifestyle of today's consumers.
"So our strategy is to explore ways we can become a digital operator, not a telecom operator."
It is not about the number of gigabytes, it's a TV service, music service, news service and cloud service, financial service, healthcare services, he added.
"You will see us not anymore focusing on traditional voice or data. We will not sell raw data in the future. You will see us as the active provider of a bundle of digital applications and the future of our industry," concluded Kaan Terzioglu.
