The Abu Dhabi Group (ADG), the business controlled by members of the United Arab Emirates’ royal family, is preparing to invest as much as USD1 billion in setting up a portfolio of businesses in Bangladesh, with the bulk of the money earmarked for the launch of a new mobile service via its subsidiary Warid Telecom. ‘We will sign a memorandum of understanding with the Board of Investment regarding the investment in telecom, banking and hospitality sectors,’ an ADG spokesperson confirmed on Friday. Warid Telecom has already applied to the Bangladesh Telecommunication Regulatory Commission (BTRC) for a GSM mobile licence and says it plans to invest between USD700 million and USD800 million in rolling out wireless services in the country. The regulator is currently considering the proposal and is strongly expected to issue the operator a licence by the end of the month. With the government having set itself a target to increase combined wireline and wireless teledensity from less than 1% to 4% by 2010, the issuing of the concession itself is seen as a formality.
ADG’s interest in the Bangladesh is the latest sign that the country’s wireless sector may finally be starting to live up to its obvious promise. Like the wireline market, Bangladesh’s mobile sector is currently operating far below its potential, however, unlike the fixed line sector, growth is beginning to pick up and looks set to skyrocket thanks to an influx of new investment. Two major new players have already entered the market this year in the form of state-owned fixed line incumbent Bangladesh Telegraph & Telephone Board (BTTB) and Egyptian wireless giant Orascom Telecom. BTTB has long held a substantial amount of GSM spectrum but only finally rolled out its mobile service Teletalk in December; initially available as a limited service in only the country’s larger towns and cities, the cellco will launch nationwide later this month. Orascom, meanwhile, entered the market via the purchase of struggling operator Sheba Telecom in September, which it relaunched under the banner Banglalink last month. Banglalink’s cut price services are widely predicted to kick off a price war and give a much needed boost to competition between the market’s five operators, market leader GrameenPhone (a subsidiary of Norway’s Telenor), Telekom Malaysia International Bangladesh (operating under the banner AKTEL), Pacific Bangladesh Telecom Limited (CityCell), Teletalk and Banglalink itself.