Sigve Brekke, chairman of Grameenphone, says it matters to be a leader in innovation. Photo: Grameenphone

Telenor now views Grameenphone as a market leader in innovation and not just in terms of a large subscriber base in the Bangladesh market.

The Norwegian company -- the major stakeholder of Grameenphone -- is ready to face any competition head-on in the six-operator mobile market.

"Our strategy is to continue to be a market leader. I am not talking about market share. I am talking about being a market leader in terms of innovation," says Sigve Brekke, executive vice president of Telenor Group, head of region Asia.

Norway's telecom giant owns a 55.8 percent stake in GP, while local Grameen Telecom owns 34.20 percent and the remaining 10 percent is held by the public and other institutions.

In a recent interview in Dhaka with The Daily Star, Brekke says GP is not ready to wait for the 3G spectrums to be disbursed before it massively enters Bangladesh's data market.

"Our strategy is not only to wait for the 3G spectrum. We are now starting new internet-based services even before the 3G licence is disbursed."

The telecom regulator has already announced to award the 3G spectrum by mid-2010. However, operators are tense over the process the regulator will adopt to disburse the licence, which may either be through auction or any other process.

Earlier, Bangladesh Telecommunication Regulatory Commission (BTRC) awarded each WiMax licence for a hefty Tk 215 crore.

Brekke, also chairman of GP, suggests BTRC come up with some conditions, like future rollout plans and pricing mechanisms, in awarding the 3G spectrum, which will benefit the masses.

"Do not make the same mistake as many other countries in Europe did in awarding the 3G spectrum at a hefty price."

Telenor has set two major areas of investment for GP: one is to invest in network expansion to rural areas and the second is investment in developing data services.

On potential competition from the Bharti Airtel debut in Bangladesh, Brekke says: "Principally, we like competition. If the regulatory framework ensures a level playing field, competition brings good for the customers at the end of the day."

"Competition is a way for us to constantly improve ourselves. So we are not afraid of competition."

Telenor has recently launched its services in India, which is a 10 operator mobile market. "We really know how competition works."

Explaining why Asian markets interested Telenor in recent times, Brekke says all telecom markets were somewhat hit by the financial crisis. Revenue development was low in Europe last year, but markets in Asia were less affected by global recession.

In Asia, he says, Bangladesh, India and Pakistan were better off than Malaysia and Thailand. The telecom business is a growth business. Telenor has focused on Asia, as not much growth remains in Europe.

"That is also why Telenor decided to enter India last year. India has a large market to grow in," says Brekke.

Telenor has no plans to expand its footprint in any other Asian country. "I think India was a big investment for us, not only in terms of money but also in terms of organisational capability. For the time being, India is our main focus," says the Telenor official.

Bangladesh is still a growth market, he says. "If you look at the mobile penetration rate today, it is only 33 percent. Even neighbouring Afghanistan has more than a 40 percent rate of penetration. So there is much more growth left in Bangladesh."

However, the main problem in Bangladesh right now is Tk 800 in tax on SIM (subscriber identity module). "We are no longer growing in the city now. We are going to rural areas. But the SIM tax remains an entry barrier to rural Bangladesh."

About the upcoming mobile banking in Bangladesh, Brekke says many still do not having an access to banking. Telenor's idea is to work together with GP's mobile system to make every mobile phone a bank branch.

Mobile banking is a business that is new to telecom operators, but old to banks, says Brekke. "So we will not do this alone in Bangladesh. We will do this in partnership with banks."

"If we do that, the banks will take care of the system, including security, and we will just take care of the distribution of money," he says.

"We have not come up with a dividend policy as yet for the GP IPO. We hope we are able to find a balance. The balance will be between paying dividends to shareholders and also investing for future growth.

hasan