In a conversation with Prothom Alo, the minister said investment is the most crucial factor for a mobile operator to succeed. No institution can shine unless necessary investment is made, necessary infrastructure is built. The government investment in Teletalk did not come as per expectation.
Minister Jabbar also said the state-run telecom company received a fund of Tk 100 billion after he had taken charge in 2018. However, the industry insiders cast doubt over the revival of Teletalk.
Beginning of journey in 2004
Teletalk, a completely state-owned company, started its journey on 26 December in 2004 and launched commercial operation on 31 March in 2005.
Its vision was to be the most affordable brand offering the state-of-the-art mobile voice, digital services and broadband access to every citizen in every corner of Bangladesh. Also, it was aimed at creating a new source of revenue for the government and at ensuring fair competition between the public and private sectors.
Teletalk provides 3-G network facility in 50 per cent areas and 4-G service in 32 per cent areas. Its officials said their company managed to ensure high-speed internet service in some big cities and towns only
The Bangladesh Telecommunication Regulatory Commission (BTRC) calculated the number of active SIMs in the country at 180 million in October last year. Teletalk has only 6.7 million subscribers while Grameenphone has 80 million, Robi 50.5 million, and Banglalink nearly 40 million. The state-run telecom company maintains a bit less than 4 per cent market share.
Individuals concerned said many have no choice as Teletalk SIM is mandatory in some government offices and also to avail some government services - such as application fees of government job circulars must be paid through Teletalk SIM.
Poor network quality
Teletalk could not bring a large portion of the population under its network facility, even after 17 years of inception. The telecom company said its 2-G network now covers around 61 per cent areas of the country, allowing the residents only to talk and message over the phone. Browsing the internet requires 3G and above standards of services.
Teletalk provides 3-G network facility in 50 per cent areas and 4-G service in 32 per cent areas. Its officials said their company managed to ensure high-speed internet service in some big cities and towns only. The company is yet to extend its high-speed internet service in some districts, including Lakshmipur, Joypurhat, and Chapainawabganj.
After going through the financials, it seems that there is a question over Teletalk’s ability to survive
Even, around 20 per cent areas of the capital city remain out of the purview of Teletalk’s high-speed internet facility, while the private operators have gone a long way in the meantime.
An operator needs base transceiver stations (BTS), popularly known as mobile tower, to widen the range of its network. Teletalk has only 5,661 BTSs while Grameenphone and Robi have 18,000 and 15,000 BTSs respectively.
Mushfeka Islam, a private university teacher in Dhaka, has been using Teletalk SIM since 2008. She vented disappointment over the service and said she encountered network problems frequently despite being a resident of Niketon, a comparatively upscale locality in the capital.
She does not even have much option to switch the operator as she has been using the SIM for a long period.
The business of Teletalk has been in the red for 15 years as the company bagged profit only in the first two years. Teletalk earned a total of Tk 4.98 billion in 2021-22, but the high operation cost forced it to incur a net loss of Tk 2.25 billion.
The company posted the highest ever loss in the last fiscal year. Its debt liabilities were totaled at Tk 52.17 billion in September last year, where the due to government is Tk 23.28 billion, to the BTRC is Tk 19.53 billion, and to the rural electrification board (REB) is Tk 3.89 billion.
Teletalk owes not only to the government but also to some private institutions, such as Tk 1.66 billion to a logistics supplier and Tk 1.94 billion to the banks and other donors.
On the flip side, Teletalk is owed Tk 1.41 billion from different entities.
Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD) said after going through the financials, it seems that there is a question over Teletalk’s ability to survive. The company has government capital, loans, grants and is not in a position to repay due to back to back losses. All these issues create liabilities for the government.
The BTRC remains lenient towards Teletalk as much as it becomes harsh on other operators for collecting dues and ensuring the quality of service.
The regulatory commission held a press conference in September last year and disclosed the call drop rates of telecom operators, but refrained from providing any information about Teletalk.
BTRC chairman Shyam Sunder Sikder at the press briefing said there is deficiency in the state-run operator’s management. Hence it is given some time to prepare.
A project gets clearance, another rejected
The government, in August last year, approved a Tk 22.04 billion project to boost Teletalk's network capacity through installation of 500 new towers under its own arrangement and another 2,500 in share with other operators.
Even after installing 3,000 towers, the state-run company will remain far behind others as the number of its total towers will be only around 9,500, which is half of the Grameenphone's total towers.
Other operators have also been in effort to strengthen their network capacity through installation of new towers. They are planning to introduce 5-G service within the next one or two years.
Teletalk carried out the trial run of 5-G service in December, 2021 and initially launched the service in several areas. However, the facility is too poor to speak of.
The telecom operator proposed a project involving Tk 2.36 billion to bring the capital under the 5-G service, but the government rejected the proposal in a meeting of the executive committee of the national economic council (ECNEC).
Why did Teletalk fail?
According to some former and current officials and telecommunication experts, there is no accountability for the losses of Teletalk and the directors do not face any action in this regard. Also, it delays making decisions. It could not succeed due to various factors, including bureaucratic complications, lack of planning and monitoring.
The posts and telecommunications secretary is the chairman of Teletalk’s board of directors in ex-officio capacity. Seven of the eight directors come from different ministries, directorates, and agencies while the remaining one is from the FBCCI.
Asked about the poor business status, the managing director of Teletalk, Habibur Rahman, said he assumed the position recently. He is tracking down the actual problems and formulating short, mid and long term plans to get rid of those.
Why does Teletalk get support to survive?
The state-run enterprises are mostly loss-making and inefficient. The chiefs argue that the companies are necessary in order to keep the market competitive. Also, the government should not bestow everything upon the private sector when it comes to emergency products and services.
Professor Muzaffar Ahmed and Professor Rehman Sobhan authored a book in 1980, titled ‘Public enterprise in an intermediate regime: A study in the political economy of Bangladesh’.
Citing the book, former lead economist of World Bank, Zahid Hussain, said the two noted personalities talked about keeping the commercial sector under the government for two reasons. The first one is to reduce discrimination. The government entities will sell goods and services at affordable prices for the wellbeing of people, rather than for profit.
The second one is to ensure competition in the market through expertise and rule out the private sector’s tendency of monopolise business.
Zahid Hussain said none of the two scenes came true in Bangladesh. The inefficient government entities do not do any favour to the economy, rather burden the government with a huge budget. These entities are helped to sustain thanks to the political economy. The bureaucrats are beneficiaries of the inefficient government institutions as they occupy different positions here.
* The report, originally published in the print edition of Prothom Alo, has been rewritten in English by Misbahul Haque