Feasibility study of fourth generation (4G/LTE) mobile network in Bangladesh

Abstract

The purpose of this study is to analyze market feasibility of 4G/LTE and evaluating financial viability of the investment using financial analysis. The possible outcome of the proposed project is the feasibility report to introduce 4G/LTE in Bangladesh. LTE is aim to provide mobile voice, video and data services by promoting low cost deployment and service models through Internet friendly architectures and protocols. By Seeing the benefits and added value of LTE technology and return on investments, it’s been observed that there is a growing interest of network operators across the world to migrate their existing 2G/3G networks to 4G technologies to enhance the user experience and service. However, although 4G technology will give a new dimension to the Mobile and Internet industry in Bangladesh, but it’s worthwhile to understand whether deploying 4G/LTE Technologies in Bangladesh is financially viable or not for Mobile Operators. Keeping that in mind, In this report the focus is given on the cost and Revenue analysis, capital and operational expenditure of LTE roll out, return of investment, Average Revenue per User, LTE adoption trends worldwide, 4G network deployment considerations, Survey for Market Demands, Conjoint Analysis to understand peoples valuation on different attributes of 4G technologies and overall the feasibility for implementation. Technological and economical balance is an important topic here to address. This report focuses on return of investment as it will be a key driver for Mobile operators to invest on 4G/LTE technologies. In addition to the Network implementation and maintenance cost, Mobile operators also have to consider the cost imposed by BTRC for License fee and Revenue sharing. In these situations, financial viability of the investment using financial analysis is very crucial for Mobile operators to ensure that the investment and the profitability are secured. I have considered data from GrameenPhone in my study in order to evaluate financial viability of the investment for GrammenPhone using financial analysis. From my study it has been found that 4G/LTE implementation for GrameenPhone is feasible as the IRR is 33%, NPV is positive and the discounted payback period is 3.24 years considering the discounting factor is 13%. Moreover, it’s been observed that in most of the countries 2G/3G technology is in its declining phase and its going to be taken over 4G/LTE. Although the 2G/3G technology will remain in the market with the 4G/LTE technology but moving forward the market for 4G will grow whereas the market for 2G/3G will decline.