Opportunity in the East

The debate over Bangladesh having or not having achieved developing country status is interesting. The arguments are likely to continue. The major credit rating agencies suggest that Asia is the future of business opportunity; Bangladesh is a lead country. Business confidence, such a crucial factor in investment consideration, for Bangladesh has just received another boost. Telenor has made a statement by selling its interests in Hungary and shrinking its operations in Europe, leaving it cash-flushed to invest in Asia and Scandinavia. According to the UN, this is a sort of double whammy. On one hand such a graduation will mean drying up of aid and low-interest loans. On the other, the prospects exist of more investments.

The suggestion is, notwithstanding higher cost of the dollar, meaning the returns remaining similar if not less are still more meaningful than in tax-unfriendly and high-cost Europe. Another issue is the decline of population growth. Seventeen years ago, the prediction was that zero or negative population growth would hit Scandinavia in particular and Europe as a whole. On the contrary, even with low growth rates Asia is churning out new faces that are fast overtaking the older population, not to mention creating a future consumer base.

In terms of uncertainty, businesses dislike regulatory hip-hops much more than political instability. None of the existing businesses in the country really inject fresh investments. It's more like adjustment made against repatriated profits. That's why forex reserves always refer to exports and remittances, rather than investments. Comparative salaries and bonuses are lower than the West and profits and turnover are both attractive. So when Chief Executive officers (CEOs) say they're not making money it is a comparative view. The official line is 'investing in the future' but in a world of integrated supply chains, there are more efficiencies at work.

The last time Apple CEO Tim Cook was in India he was candid. With a per capita income of $ 1500, daily average earning of $ 3.14 there was room for exciting manoeuvring. And while his idea of using refurbished  phones was business-wise attractive in a market where $ 90 smartphones are in vogue, the government refused. That was India's way of nudging manufacturers to produce in the country, thereby enabling job creation. Cook was upfront in acknowledging that phones made in India would be considerably cheaper than the US or even outsourced. At least in Bangladesh Telenor has dabbled in the phone market by introducing GP branded phones, outsourced as they were. That they didn't really hit off is a consumer perception issue.

There have been some reports that many smartphones currently in use in the country are not 4G friendly. Those using iPhones have been politely texted that work is on with Apple to iron out glitches preventing availability of 4G networks. That sounds strange as the same phones work well in other 4G networks in different countries. There's a difference between the claims of rolling out 4G in all districts and availability of the network all-over. That and the issue of iPhones not working, most phones not being enabled provides a corridor of uncertainty where consumer and regulator can't find a particular point to dab at. In the meantime, the roughly Tk 104 charge for changing SIM cards has done wonders to the bottom line. This will not have been lost on Business savvy Telenor.

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