Economic Impact: Bangladesh Mobile Industry · PDF fileBangladesh performs close to the regional averages across metrics of mobile market development, ... AND BUSINESS SURPLUS) KNOCK-ON

Economic Impact: Bangladesh Mobile Industry

Copyright © 2017 GSMA

1Economic Impact: Bangladesh Mobile Industry

Introduction

The positive impact mobile broadband services can have on societies and national economies are well documented. Bangladesh is already seeing some of these benefits, but there are still actions the government can take to further improve the lives of its citizens. In this booklet, we take a closer look at the how the mobile ecosystem is making a significant contribution in terms of economic growth, job creation and public funding.

2

The current situation

Bangladesh performs close to the regional averages across metrics of mobile market development, despite having lower income than neighboring countries. Notably, Bangladesh is above the regional average in subscriber penetration, while only slightly below in mobile internet and in the proportions of 3G and 4G connections.


3,8 1,4

7,6 12,7

1.8%

0.7%

3.7% 6,2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

Direct impact Indirect Productivity Total

USD

Billi

ons

Total contribution to GDP Direct Impact (percentages are proportions of GDP)

ECOSYSTEM VALUE ADDED (WAGES, TAXES

AND BUSINESS SURPLUS)

KNOCK-ON EFFECT IN SECTORS PROVIDING

INPUTS IN THE SUPPLY CHAIN OF MOBILE

GOODS AND SERVICES

IMPROVED EFFICIENCY THROUGHOUT THE ECONOMY

VIA THE USE OF MOBILE TECHNOLOGY (AGRICULTURE,

EDUCATION, FINANCE, HEALTH)

CONTENT APPLICATIONS AND OTHER SERVICES4%

INFRASTRUCTURE PROVIDERS

12%

MOBILEOPERATORS

58%

DISTRIBUTERS ANDRETAILERS25%

HANDSETMANUFACTURERS1%

Formal employment

INFRASTRUCTURE10%

OPERATORS25%

CONTENT, APPSAND SERVICES

25%

HANDSETMANUFACTURING

5%

DISTRIBUTIONAND RETAIL35%

50

195

520

765

0 100 200 300 400 500 600 700 800

Formal and Informal employment (thousands)

Formal

Direct

Informal

Indirect

Total

Mobile-specific taxation

SIM TAXES25%

REVENUE SHARE TAX44%

SOCIAL OBLIGATION FUND8%

DUTIES ONAIRTIMEVOUCHERS11%

SPECTRUM FEES11%

LICENSE FEES1%

2,420

38070

680

830

460

USD

Mill

ions

Mobile servicesVAT

Handset VATand Customs

Corporation tax Employee income and

social security

Mobile-specifictaxation

Total

0

500

1,000

1,500

2,000

2,500

MOBILE MARKET IN BANGLADESH: KEY METRICS

Unique Subscriber penetration

Mobile internet penetration

Proportion of 3G Connections Proportion of 4G Connections

Bangladesh 53% 33% 20% 0%

India 48% 35% 18% 1.7%

Southern Asia 50% 34% 21% 1.9%

World 65% 48% 32% 23%

Data as of Q4 2016

In 2015, mobile technologies and services generated 6.2% of GDP in Bangladesh, a contribution that amounted to around $13 billion1 of economic value. This includes the direct impact of the mobile ecosystem as well as the indirect impact and the increase in productivity brought about using mobile technologies.

TOTAL CONTRIBUTION OF THE MOBILE ECOSYSTEM IN 2015

1 Estimate for 2016 is: $13.5 billion


3,8 1,4

7,6 12,7

1.8%

0.7%

3.7% 6,2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00


USD

Billi

ons


ECOSYSTEM VALUEADDED (WAGES, TAXES



INPUTS IN THE SUPPLYCHAIN OF MOBILE

GOODS AND SERVICES

IMPROVED EFFICIENCYTHROUGHOUT THE ECONOMY

VIA THE USE OF MOBILETECHNOLOGY (AGRICULTURE,



INFRASTRUCTUREPROVIDERS

12%

MOBILEOPERATORS

58%



Formal employment

INFRASTRUCTURE10%

OPERATORS25%


25%


5%


50

195

520

765

0 100 200 300 400 500 600 700 800


Formal

Direct

Informal

Indirect

Total


SIM TAXES25%




SPECTRUM FEES11%

LICENSE FEES1%

2,420

38070

680

830

460

USD

Mill

ions

Mobile servicesVAT



social security


Total

0

500

1,000

1,500

2,000

2,500

3,8 1,4

7,6 12,7

1.8%

0.7%

3.7% 6,2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00


USD

Billi

ons


ECOSYSTEM VALUEADDED (WAGES, TAXES



INPUTS IN THE SUPPLYCHAIN OF MOBILE

GOODS AND SERVICES

IMPROVED EFFICIENCYTHROUGHOUT THE ECONOMY

VIA THE USE OF MOBILETECHNOLOGY (AGRICULTURE,



INFRASTRUCTUREPROVIDERS

12%

MOBILEOPERATORS

58%



Formal employment

INFRASTRUCTURE10%

OPERATORS25%


25%


5%


50

195

520

765

0 100 200 300 400 500 600 700 800


Formal

Direct

Informal

Indirect

Total


SIM TAXES25%




SPECTRUM FEES11%

LICENSE FEES1%

2,420

38070

680

830

460

USD

Mill

ions

Mobile servicesVAT



social security


Total

0

500

1,000

1,500

2,000

2,500

EMPLOYMENT IMPACTS IN 2015

CONTRIBUTION TO PUBLIC FUNDING IN 2015

The mobile industry also generates more than 760,000 jobs2 and made a significant contribution to public funding of more than $2 billion in 2015. One third of the jobs are created directly in the ecosystem, and the rest is produced through the knock-on effect on the sectors that provide inputs for mobile goods and services.

2 Estimate for 2016: Employment- 7,80,000 (260,000 direct) Public funding- $2.15 billion excluding mobile-specific

4

What the future holds

With right policies in place, the GSMA expects the economic contribution of the mobile industry in Bangladesh will continue to increase. By 2020 the mobile industry is expected to generate $17 billion of economic value.


4.0 4.3 4.5 4.8 5.0

1.5 1.5 1.6 1.7 1.8

8.0 8.5 9.0 9.5 10.2

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2016 2017 2018 2019 2020

USD

billi

on

Direct Indirect Productivity

2016 2017 2018 2019 2020

Direct employment Indirect employment

255 270 285 300 315

525 530 535 535 535

780 800 820 835 850

0

100

200

300

400

500

600

700

800

900 4.0 4.3 4.5 4.8 5.0

1.5 1.5 1.6 1.7 1.8

8.0 8.5 9.0 9.5 10.2

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2016 2017 2018 2019 2020

USD

billi

on

Direct Indirect Productivity

2016 2017 2018 2019 2020

Direct employment Indirect employment

255 270 285 300 315

525 530 535 535 535

780 800 820 835 850

0

100

200

300

400

500

600

700

800

900

OUTLOOK TO 2020: TOTAL IMPACT OF THE INDUSTRY

EMPLOYMENT PROJECTIONS IN THE PERIOD TO 2020, THOUSANDS

At the same time, total employment is predicted to grow by about 9% in the period from 2016 to 2020, which represents an increase from 780,00 to 850,00 jobs. This increase will be powered by direct employment creation in the mobile industry.

Growth will be driven by two key developments:

■■ Productivity gains will be increasingly driven by mobile internet, because of coverage improvements and increasing take up. Considering the low levels of fixed internet connectivity in Bangladesh, the growth will help transform the country. It also means that mobile internet will be the main vehicle to connect unconnected.

■■ The operators will continue to create most value in the ecosystem followed by Distribution/retail and infrastructure. The content and services segment will increase its contribution.

Getting the right spectrum policy framework

Across the globe, stakeholders are adopting more liberal regulatory approaches towards spectrum management. Spectrum-related policy choices are therefore critical to enabling investment. These include availability of additional spectrum at reasonable prices, providing clarity on spectrum roadmap for upcoming bands like 700 MHz and remain free from restrictions on spectrum-use that limit the industry’s ability to adjust to changes in consumer preferences and technology. Realising the full potential would depend on a strong partnership between government, industry and other stakeholders.

Mobile can bring the above transformation in the Bangladesh economy and society, only if the right visionary policy framework is put in place. With the upcoming auctions the time is right to make this happen.



Floor 2, The Walbrook Building25 Walbrook, London EC4N 8AF UKTel: +44 (0)207 356 0600

[email protected]

©GSMA January 2017

Documents

Economic Impact: Bangladesh Mobile Industry · PDF fileBangladesh performs close to the regional averages across metrics of mobile market development, ... AND BUSINESS SURPLUS) KNOCK-ON