An assessment of the efficiency of capex budget management at Robi Axiata Ltd.

Abstract

This report encompasses my work at the Integrated Planning Finance (IPF) division of Robi Axiata Ltd. during the three months of my internship period and an elaborate research on the investment planning procedure and capital expenditure management of the company, as well as their capabilities to generate sufficient income for the sustainability of the company. From the start of my internship period on the 7th of January, 2016 to the 6th of April, I have been immersed in tasks that have not only introduced me to the real corporate world, but also widened my perspectives on how telecommunication companies in Bangladesh plan their investments in optimal ways to gain the most out of them in terms of revenues and market share. The report begins with an introduction to the telecommunication landscape in Bangladesh and a depiction of where Robi stands in comparison to its competitors, followed by how it originated from its parent companies, the different products and services it caters to the public and more details about the organizational structure and goals. Next, it goes on to describe my job responsibilities as an IPF intern, different aspects of the job performance and observations along with some suggestions that could have made the experience even better. The third part of the report consists of the main project and starts with the objective, methodology and the limitations surrounding it. This part is divided into several chapters, the first of which talks about SAP ERP software, its uses and some of the modules used for Capex tracking with illustrations of the program interface. The second chapter defines Capex management, its importance in business, the Capex value chain at Robi and a pie chart displaying the approximate amounts of Capex budgets requested by each division. The third chapter is all about investment in Base Transceiver Stations (BTS), the main area of Capex deployment in a telecommunication company. The criteria that influence this decision and the alternative measures that may be taken when a BTS is not the prime solution have all been explained in this section. Chapter 4 discusses the current Capex optimization process (Oikotan) in detail and clearly defines the roles played by marketing operations, finance and technology divisions in this process. Finally, Chapter 5 constitutes a quantitative analysis of the efficiency of the Capex budget management process with respect to several financial ratios that outline the level of capital expenditures incurred and monitor their return and the company‟s overall profitability over a period of five years (before and after the initiation of the new process). This section also contains a qualitative analysis by defining some common attributes of Capex management by telecoms around the world and pitting Robi‟s practices against their best practices to examine how effective Robi‟s turn out to be. Some recommendations have been stated that may help to increase Robi‟s Capex efficiency further and lastly a conclusion which looks into Robi‟s future.