The impact of regulatory and macroeconomic factors on the telecom industry in Bangladesh: a study on Grameenphone Ltd.

Abstract

This report assesses the impact of macroeconomic and regulatory factors on Grameenphone Ltd.’s mobile ARPU between 2014 and 2024. The report is based on a 12-week internship at Grameenphone in the Strategy and Analytics Department under the Product Division. The independent variables CPI, supplementary duty, GDP per capita and revenue sharing & spectrum charge per user were used to run a linear regression analysis and for qualitative factors like political unrest, previous literature was used to derive relationships. From the regression analysis, it was found that CPI, supplementary duty and revenue sharing & spectrum charge per user have a statistically significant relationship with mobile ARPU. CPI and revenue sharing & spectrum charge per user have a positive relationship, indicating that GP’s ARPU is inelastic to price changes and it responds to increased regulatory costs through price adjustments. Supplementary duty has a negative relationship, showing that high sector-specific sector taxes deter users from spending on telecom services. Limitations of the analysis were a small dataset, lack of publicly available data and multicollinearity between a few independent variables. As a result, more focus was put into direction and economic theory rather than the magnitude of coefficients. Based on this, a few recommendations were made for the business. Additionally, this report also discusses the details of my internship journey and Grameenphone’s management practices, marketing practices, financial performance, operations and competitive environment. A few recommendations have also been made to further strengthen Grameenphone’s position as market leader.