Telenor to stay in Bangladesh for long

Telenor, the parent company of leading mobile phone operator Grameenphone, has a long-term commitment to the Bangladesh market.

"The first chapter of growth was for 27 years and now we are preparing ourselves for the next growth wave, which will come over next one or two decades," said Sigve Brekke, president and CEO of Telenor, in an interview on April 3.

Brekke, who arrived in Asia in 2000 to assume the role of managing director at Telenor Asia after serving as the Norwegian deputy defence minister till 1996, is a first-hand witness of Telenor's rising empire in Asia.

However, the company is now struggling to remain strong in the region through exits and mergers.

After entering the Asian market by launching Grameenphone in 1997, its success was the linchpin for Telenor to have increased its focus on Asia, with successful entries into Thailand, Malaysia, Pakistan, Myanmar and India.

However, it now appears that Telenor is gradually either exiting Asia or merging to consolidate its position in different Asian markets. Nearly eight years after venturing into India, Telenor exited the country in 2017.

Telenor has consolidated its Asian businesses -- in Thailand and Malaysia -- via local mergers as a minority shareholder.

It also agreed to sell its Pakistan unit to the state-owned Pakistan Telecommunications.

In an earlier interview, Brekke said the company's grim exit from Myanmar following the military coup "affected investors' views on our Asian assets".

So, asked what the case for Grameenphone is as it has no scope to merge with another company for being declared a significant market power in 2019, he said, "…we're very committed (towards Bangladesh)".

"The reason why we exited some markets and merged in others is that we saw that we need to be prepared for data growth in these models. Also, we saw there was not enough business for just more than three operators in those nations," he said.

There was opportunity for the growth of more than three mobile network operators in times when people were lining up to get a mobile phone.

But now as most people have secured such devices, operators have to provide different services.

"That's what we saw in Malaysia and Thailand, so merging certainly helped us get the number one position in these markets," he said while pointing out that they also remain in the top spot in Bangladesh.

However, the same was not possible in Pakistan, where Telenor sees that it cannot make enough money for the next growth phase.

So, the company has exited the market and instead opted to concentrate on efforts in those where it holds a very solid position.

"So, I am very happy with the number one position we have here (Bangladesh), Thailand and Malaysia," Brekke added.

Although Grameenphone is the largest telecom operator in Bangladesh, with Telenor holding a 55.8 percent stake, it appears the company's foundation is not as solid as it was before.

Grameenphone is finding it difficult to rebuild its customer base after a ban on SIM sales from July 2022 to early January 2023.

Before the ban, the company accounted for about 46 percent market share and now it has dropped to 43 percent.

Another issue of concern for Telenor is a recent letter from Grameen Bank, asserting its claim for the position of chairman of Grameen Telecom, a non-profit organisation founded by Nobel laureate Dr Muhammad Yunus, which holds a 34.2 percent stake in Grameenphone.

Terming the questions about the SIM ban as difficult, Brekke said the regulatory move was not a good one.

"And we didn't like that, because we think that was unfair," he said.

"But other than that, I think the regulations are the same (in other countries Telenor operates). So, it's neither better nor worse (in Bangladesh)," he added.

"And that's a reason why we met the minister this morning and spoke about how we need to look at ways for the government and industry to work together," Brekke said, adding that, "We are not enemies, and should be friends instead."

He said as the prime minister and ministers want to build a "Smart Bangladesh", it is imperative to have more private-public partnerships.

"If we want to connect everyone to data and convert to new data services, we need to do it together with the regulator," Brekke added.

Regarding the issue of Grameen Telecom, Brekke said of course they are reading the news about their partner, Professor Yunus, and Grameen Telecom but are not part of that.

"So, we are focusing on our business, Telenor is focusing on our majority ownership of Grameenphone and the management team is focusing on their business. I don't know more about that than what you can see in the news," he added.

Asked about the business environment in Bangladesh, he assured that the company would not have remained in the country for so long if it was not good for business.

"Doing business in Bangladesh is good in the sense that we can make money," he said.

According to him, Telenor sees two reasons to continue business in a country. One is to make money because it has local shareholders and in addition, the company wants to empower local societies.

"And we feel in Bangladesh that we can both make money and also make a difference. We can make a difference in connecting people to mobile phones for the first time and connecting people to data," he said.

Brekke lauded the regulator for providing mobile operators with unified licences and allowing them to provide mobile broadband or fixed wireless access.

Asked about Grameenphone's plan to roll out 5G, he said the telecom operator has established extensive 4G coverage across Bangladesh and now aims to improve indoor connectivity.

Regarding their 5G launch plans, he noted consumer benefits of 5G are minimal compared to 4G.

5G's true value lies in specialised use cases, such as digitising ports, airports, hospitals and industry.

Against this backdrop, he emphasised the need for specific 5G applications, such as factory automation, to justify its implementation.

This is because simply deploying 5G without targeted use cases lacks a viable business model, he added.

Brekke also said he has always been motivated to visit Grameenphone, which has 82 million customers, surpassing the combined subscriber count of its four markets in Europe and the other two remaining markets in Asia, for its capacity to innovate.

What Grameenphone does, especially on the digital side, is try to copy the success of similar initiatives in other markets, he said.

Brekke was also surprised to witness the rapid changes in technology, which was something he had not yet experienced throughout his entire career.

"I just came back from America two months ago, where I visited Google and Facebook and Amazon. I saw how fast AI is changing their business models and I call it the perfect storm. This perfect storm is when not only people, but things also become connected," he said.

According to him, when AI, connectivity between people and the internet of things, and data networks converge, a revolutionary transformation is poised to occur.

"So, and that's why I think Bangladesh and similar countries have an opportunity. This is because you don't have so much legacy in technology in the way of doing businesses as many other countries have as you start from a little bit more from scratch," he said.

"So, you can leapfrog and you can do things much faster. This way, the implementation of AI in Bangladesh could be much faster compared to many countries if you just get your act together," Brekke added.