Russian Firm Want To Enter Bangladesh Mobile Market

AFK Sistema, the owning company of Russia's largest mobile phone operator OAO Mobile TeleSystems, has said it is in talks to buy a cellphone firm in Bangladesh.

"We are interested in the Bangladeshi market, especially in its mobile phone sector. The mode of entry is under discussion as well. We will continue to work for entering Bangladesh," said Kirill Semenov, head of international press office of AFK Sistema.

"There is a negotiating process going on and Sistema has signed a memorandum of understanding with Bangladesh's authorities," he said.

However, the Moscow-based Sistema did not mention which company it is interested in. But said Sistema is interested to buy one operator, either a GSM or a CDMA operator.

Semenov said Sistema is yet to take any decision whether it would buy a CDMA (code division multiple access) or GSM (global system for mobile communications) operator. "It's too early to give any timeframe also," he said.

Sistema's mobile unit OAO Mobile TeleSystems also operates in Commonwealth of Independent States (CIS). Together with its subsidiaries, the company serves over 83.88 million subscribers.

Earlier in April at a meeting with the telecom regulator of the country, UAE-based telecom operator Etisalat expressed interest to buy stakes in the state-run mobile operator TeleTalk.

Industry insiders predict two names on the selling list -- the poor performing TeleTalk and the country's oldest and sole CDMA operator Citycell -- as these two are struggling for a significant market share.

According to Bangladesh Telecommunication and Regulatory Commission (BTRC), CityCell and TeleTalk have 1.70 million and 1.07 million subscribers respectively as of June 2008.

When contacted, Iqbal Mahmud, chairman of TeleTalk's board, admitted that the Russian company met TeleTalk officials recently and showed interest to invest in Bangladesh's mobile phone sector.

"There is decision by the company's board to sell at least 25 percent share in TeleTalk," he said adding, "If the government approves the decision, we will go for further steps."

Mahmud said he has also asked the Russian company to send its proposal about how it would like to invest in Bangladesh's telecom sector. TeleTalk needs a strategic partner to sustain in the highly competitive market, he said.

"Some officials of Sistema visited BTRC last month," said BTRC Chairman Maj Gen (retd ) Manzurul Islam. Echoing the TeleTalk chairman, he said BTRC also asked them to come with clear investment proposal.

However, CityCell officials refused to comment on the sale issue.

Sistema said it has signed telecommunication agreements with the governments of China and Bangladesh to execute its investment plan.

Bangladesh is a six-operator mobile market. Norway's Telenor majority Grameenphone is the marker leader with having 20.30 million subscriber followed by Egypt based Banglalink's 9.46 million and Telekom Malaysia's Aktel 7.85 million as of the end of June 2008. The total number of mobile phone subscribers reached 43.7 million by the end of June, according to telecom regulator.

Regarding the mobile phone market size in Bangladesh, Anders Jensen, chief executive officer of Grameenphone, said, "Six or seven players are far too many, this is a four to five, maybe even three operators' market."