Mobile will boost Bangladesh economy to $17 billion by 2020: GSMA

bangladesh
Credit: Dana Ward / Shutterstock, Inc.

Mobile technologies and services in Bangladesh generated $13 billion of economic value in 2015, and will generate $17 billion by 2020, according to a new GSMA Intelligence study evaluating the impact of mobile on the Bangladeshi economy.

The report says that mobile technologies and services generated 6.2% of the country’s GDP in 2015 – that includes the direct impact of the mobile ecosystem as well as the indirect impact and the increase in productivity brought about by the use of mobile technologies.

The same year, mobile operators and the ecosystem provided employment to more than 760,000 people across Bangladesh. One third of that was created directly in the ecosystem, while the rest is generated indirectly in other sectors as a result of the demand for production inputs generated by the mobile sector. Also, the report says, the wages, public funding contributions and profits paid by the industry are spent in other sectors, which provide additional indirect jobs. Jobs are estimated to have increased to 780,000 by end of 2016.

Bangladesh performs close to the regional averages across metrics of mobile market development, despite a lower income than neighboring countries. Bangladesh is above the Asian average in terms of unique subscriber market penetration at 53%, while only slightly below with regard to mobile internet penetration at 33% and 3G at 20% of all mobile connections.

There is the potential for further growth if a supportive policy environment is put in place, said Brett Tarnutzer, Head of Spectrum at GSMA.

“GSMA Intelligence findings clearly demonstrate the substantial contribution that mobile makes to the Bangladeshi economy,” said Tarnutzer. “By systematically pursuing a policy framework that increases certainty, acknowledges market realities and removes regulatory barriers to investment and innovation, the Bangladeshi Government and its citizens stand to achieve so much in the coming years.”

In terms of public contribution, the mobile ecosystem generated about 10% of the Bangladeshi Government’s revenue in 2015, valued at $2.42 billion through general taxation, mobile-specific taxes and spectrum licenses.

Looking ahead to 2020, GSMA Intelligence expects that the economic contribution of the mobile industry in Bangladesh will continue to increase. In value-added terms, it is estimated that the ecosystem will generate $17 billion by 2020. This forecast relies on a favorable macroeconomic environment and on a moderate expansion in demand and supply in the mobile market, as the number of mobile internet users and mobile coverage both increase.

Employment opportunities are also set to expand from 780,000 jobs in 2016 to 850,000 jobs in 2020, an increase of around 9% during that period.

The report expects that further growth in Bangladesh will be driven by two key developments:

  • Operators will continue to create most value in the ecosystem, followed by distribution and retail and then the infrastructure sector, with the expectation that the contribution from content and services will increase
  • Productivity will be increasingly driven by the mobile internet, as a result of coverage improvements and growing user adoption. This will be highly transformative considering the low level of fixed internet connectivity in Bangladesh, which means that the mobile internet will be the primary means for unconnected populations to access the internet.

“The amount of spectrum, and the terms on which it is made available, fundamentally drive the cost, range and availability of mobile services. To ensure that this mobile vision becomes a reality, it is imperative that the spectrum is allocated in a way that encourages rapid deployment of mobile broadband infrastructure, resulting in high quality, affordable mobile services for consumers across Bangladesh,” added Tarnutzer.

The report can be downloaded here [PDF].

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