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     Volume 4 Issue 24 | December 10, 2004 |

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A Viking's Success Story

When Ola Ree took over as the managing director of Grameen Phone (GP) in 2000, the growth of the country's cell phone industry, had "just started". In real terms this translated to a modest subscriber-base of 100,000. Within four and a half years of Ree's stint GP has been able to boast over two million customers. The company's network, which before Ree's arrival only covered a handful of cities, has now been widened to 61 districts and 350 Upazilas. Ree, the Norwegian engineer who has just ended his tenure in Bangladesh, gives a glimpse into the strategies he and his dedicated team adopted to create this unprecedented success.

The key ingredient to GP's remarkable growth, Ree believes, is its wide coverage. From day one, he says, "we have been trying to cover as many districts as possible". "We reached out to the rural areas; started to cover all the cities and as many districts as possible. That was the strategy," Ree explains. "If we construct a base-station in an extremely remote area the capacity of that station is almost filled up the next day," he says, "people, seeing us constructing a tower, go to the market, buy a phone and check everyday if the connection has come."

Actually, since its inception in March 26, 1997, in contrast to most cellular phone service providers, who kept their service limited only to major city dwellers, Grameen opted for building continuous coverage.

Another strategic decision that has put GP at the top is its pre-paid service. When the company first introduced the service to the local market in 2005, experts were sceptical about Easy Pre-paid Service's success. At that time, many had considered it a huge gamble as the concept of paying bills by using a pre-paid card had failed to generate much enthusiasm in the Indian, and most notably, in the Nepalese market. However, Ree says, "For us it was not a gamble at all. We, Telenor, have launched pre-paid service in all the fourteen countries we operate. From a developing country like Ukraine to a developed country like Norway, pre-paid remains a big success.

At that time pre-paid was a big thing in Bangladesh you know…Instead of applying for a BTTB line, waiting in queue for years you just walk into a shop, buy a mobile and within minutes, you can call any phone in the country."

However, despite its huge success Grameen Phone is not immune to criticism. Among them, the most scathing is the allegation of high tariff. Though many believe that Bangladesh has the highest tariff in the world, Ree thinks, "it is very much at par with Asia except for some special packages that some Indian operators have been offering". "Our list of costs is always compared with Reliance India's 60-paisa package," he continues. "But if I were an Indian buyer I would never buy that package. First, it's 60-paisa for a Reliance India subscriber to place a call and the person at the other end has to be within a 50 kilometres range of the caller. If the person you are calling is outside this range the rate is far higher," he says.

There are hidden costs to consider as well says Ree. In addition to the start-up costs, Reliance India subscribers have to pay additional 20,000 rupees to avail this facility. "Our cheapest tariff is Taka two during night-time for GP post-paid subscribers. But if you say that the per minute tariff of any cell phone in Bangladesh is Tk 2 that will be wrong," he says.

Apart from its special night-time tariff-rate for the prepaid subscribers, the company has also launched a unique service called My Time. Under this facility, the subscribers can pick two three-hour time-slots and can call to another GP subscriber at a cheaper rate.

But, the biggest impediment, GP's outgoing MD believes, is the government's lukewarm attitude towards private cellular phone service providers. "If we had normal interconnection facility with the BTTB and if we were given permission to provide land-phone connections, prices would have certainly gone down from day one," he says.

"As you know, if any GP subscriber calls a BTTB number, we have to pay BTTB the full price for that call. If I call my friends in Norway from my cell, Grameen Phone has to pay the full price to the BTTB for using its facility. But if somebody calls me on my phone from Norway or any other country, through BTTB's network, I get nothing. BTTB takes it all," he continues.

"This is the only country I know, which has such an inter-connection regime."

Another problem that is hindering the growth in this thriving sector is the country's taxation policy. Unlike most of its neighbours, Bangladesh has one of the highest import duties on telecom equipment. "We have to pay a very high duty on the telecom equipment we import for our base stations. It varies from 16 to 60 percent, whereas most of our neighbours, on the other hand, maintain a zero-tax on its telecom sector," he claims.

Despite all the obstacles, GP, which is 55% owned by Telenor, has remained an example of corporate success. On the eve of its take off, the company has decided to go slow and to concentrate more on widening its network coverage. "We are going to invest more this year. And by the end of 2005 we will surely cover the whole country," Ree promises.

GP, in fact, has decided not to jump on the much-hyped 3G bandwagon; instead, the next big thing the company is going to introduce is 2.5 Generation mobile phones. "It is the technical phrase for GPRS, which is basically a type of high-speed data communications service," Ree, who has been working with Telenor for 27 years, explains.

The new system will transmit data at 160 Kilo Bytes Per Seconds (KBPS), which is around 16 times faster than the usual than the current data transmission rate. "It will enable our subscribers to send photos instantly," Ree says. "We have already launched this service in Malaysia," he continues, "and most of our network in Bangladesh is technically prepared for it."

Many telecom experts, however, believe the company is going to face stiff competition from Egyptian telecom giant Orascom Telecom which has bought 100 percent of the country's beleaguered cellular phone operator Sheba Telecom. But, Ree believes, competition will help all the operators to improve their service as he thinks every company's priority should be to satisfy it's customers. "If we compete on a level playing field we should not fear competition," Ola Ree says matter-of-factly.

Ree has always kept a low profile despite being a major change maker in Grameen Phone's portfolio but he is quite frank about his affinity for this country. "We (my wife and I) were very sceptical about moving into Bangladesh as all we had heard about the country was ferry capsize and flooding. After coming here and seeing we have a very different impression." Ree says what really impressed him about Bangladesh was the positive attitude of people and their innate friendliness.

"My only regret is that I have to leave Bangladesh" says Ree before flying off to his new job in Singapore.

--Aasha Mehreen Amin and Ahmede Hussain


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