Introduction
In terns of competitiveness, the spectrum of market
structures reaches from pure competition, to monopolistic competition, to
oligopoly to pure monopoly. We now direct our attention oligopoly, a market
dominated by a few large producers of a homogeneous or differentiated product.
Because of their “ fewness oligopolists
have considerable control over their price. but each must consider the possible
reaction of rivals to its own pricing output and advertising.
Barriers to entry such as scar econonies control of patents
on strategic resources, or the ability to engage in retaliatory pricing
characterize oligopolies. oligopolies may result from internal growth of firms,
mergers, or both oligopolies are mutually interdependent in their priaing
policies; collusion enhances oligopoly profits; and there is a temptation for
oligopolies to cheat on a collusive agreement
to under stand properly the oligopoly market structure, My
report goes on Grameen phone which is very popular as oligopoly market in
To gain further insight into oligopolistic pricing and output
behavior, we will examine three distinct pricing models.
In the kin ked- demand theory of oligopoly, Grameenphone price is relatively
in flexible because the firm contemplating price change that its rivals will
follow a price cit and ignore a price increase.
According to cartels, grameen phone limits and set a common
price to maximize the joint profit of their members as if each were a unit of a
single pure monopoly. According to price leadership model, GrameenPhone match
any price change initiated by a designated firm without engaging in agreements
and secret meetings. At last I hope that this report will be able to focus on
the grameenphone’s marketing strategy as oligopoly market in Bangladesh.
Background:
The study goes on Grameen Phone as oligopoly market in Bangladesh.
Grameen Phone was offered a celluar license in Bangladesh by the ministry of
posts and telecommunication in November, 28, 1996. It launched its service on
the independent day of
in march, 26, 1997. After eight years of operation, Grameen phone has more than
6 million subscribers as of March 2006.
Grameen
Telecom
Grameen Telecom, which owns 38% of the shares of
GrameenPhone, is a not-for-profit company and works in close collaboration with
Grameen Bank. The internationally reputed bank for the poor, has the most
extensive rural banking network and expertise in microfinance. Grameen Telecom,
with the help of Grameen Bank, administers the Village Phone Program, through
which GrameenPhone provides its services to the fast growing rural customers.
Grameen Telecom trains the operators, supplies them with handsets and handles
all service-related issues.
Shareholders of
GrameenPhone
The
shareholders of GrameenPhone contribute their unique, in-depth experience in
both telecommunications and development. The international shareholder brings
technological and business management expertise while the local shareholder
provides a presence throughout
and a deep understanding of its economy. Both are dedicated to
its struggle for economic progress and have a deep commitment to GrameenPhone
and its mission to provide affordable telephony to the entire population of
Telenor
Mobile Communications AS
Telenor
Telecommunications Company of
listed in the
and NASDAQ Stock Exchanges. It owns 62% shares of GrameenPhone Ltd. Telenor has
played a pioneering role in development of cellular communications. It has
substantial international operations in mobile telephony, satellite operations
and pay Television services. In addition to Norway and Bangladesh, Telenor owns
GSM companies in Denmark, Austria, Hungary, Russia, Ukraine, Montenegro,
Thailand and Malaysia. It has recently started a mobile phone operation in
Pakistan.
Telenor uses the expertise it has gained in its home and international markets
for the development of emerging markets like Bangladesh.
Grameen
Telecom’s objectives are to provide easy access to GSM cellular services in
rural Bangladesh, creating new opportunities for income generation through
self- employment by providing villagers with access to modern information and
communication based technologies.
Objectives
Broad Objective : Study
on Grameen phone as oligopoly market in
Bangladesh.
Dealing with customer.
*
Non- Price competition.
*
Non profit Activities.
*
Their market strategy.
Methodology
To prepare this report on grameen phone, I have used here the
secondary data and information from the grameen phone’s own website. I have
also visited the corporate offices, customer care center to collect the
necessary data, information. I focused open group discussion and observations
from different categories of respondents. No separate sampling was done to
under stand oligopoly market.
Findings
The Technology
GrameenPhone’s Global System for Mobile or GSM
technology is the most widely accepted digital system in the world, currently
used by over 300 million people in 150 countries. GSM brings the most advanced
developments in cellular technology at a reasonable cost by spurring severe
competition among manufacturers and driving down the cost of equipment. Thus
consumers get the best for the least.
The Service
GrameenPhone believes in service, a service that
leads to good business and good development. Telephony helps people work
together, raising their productivity. This gain in productivity is development,
which in turn enables them to afford a telephone service, generating a good
business. Thus development and business go together.
The Purpose
GrameenPhone has a dual purpose: to receive an
economic return on its investments and to contribute to the economic
development of Bangladesh where telecommunications can play a critical role.
This is why GrameenPhone, in collaboration with Grameen Bank, is aiming to
place one phone in each village to contribute significantly to the economic
uplift of those villages.
The Strategy
GrameenPhone’s basic strategy is coverage
of both urban and rural areas. In contrast to the “island” strategy followed by
some companies, which involves connecting isolated islands of urban coverage
through transmission links, GrameenPhone builds continuous coverage, cell after
cell. While the intensity of coverage may vary from area to area depending on
market conditions, the basic strategy of cell-to-cell coverage is applied
throughout GrameenPhone’s network.
The Village Phone
The
Village Phone Program has continued its rapid growth.
VP Program began from a social commitment made by the shareholders of GrameenPhone
that “good development is good business”. The program is implemented
by Grameen Telecom (GTC) in cooperation with Grameen Bank, the internationally
renowned micro- credit lending institution.
The program facilitates women borrowers of Grameen Bank to the GSM technology
through the village phones. They become effectively mobile public call offices.
This not only provides rural poor with new, exciting income-generating
opportunities, but it also helps to enhance the social status of women from
poor rural households.
The VP works as an owner-operated pay phone. It allows the rural poor who
cannot afford to become a regular subscriber, to avail of the service with
loans from Grameen Bank. The loan usually is for BDT 12,000 and pays for a
handset, the subscription and incidental expenses. The VP operator receives
training from GTC about mode of operation, user charges etc.
The average revenue per user (ARPU) of VP subscribers is double that of the
average GP business user. The revenue growth has been significant over the
years. Beginning with BDT 0.53 million in 1997, the figure has risen to BDT
1,114 million in 2002 and to BDT 2,070 million at the end of 2003.
The VPs in operation now provide access to telecommunications facilities to
more than 60 million people living in rural areas of
One of the studies was jointly conducted by Jahangirnagar University and the
Center for Development Research at the University of Bonn in Germany. The other
study was conducted by the Telecommunications Development Group (TDG) of Canada
for the Canadian International Development Agency. “The Village Phone
Program yields significant positive social and economic impacts, including
relatively large consumer surplus and immeasurable quality of life benefits,
The consumer surplus from a single phone call to
a call that replaces the physical trip to the city, ranges from 264 percent to
9.8 percent of the mean monthly household income. The cost of a trip to the
city ranges from 2 to 8 times the cost of a single phone call, meaning real
savings for poor rural people of between BDT 132 to BUT 490 (USD 2.70 to USD
10) for individual calls,” noted the TDG multi-media case study on the
Village Phone Program.”
Limitation
·
This
report has to prepared within vary short time. For which much more data and
information were not possible to collect.
·
For
want of financial assistance, I could not go physically to Grameen phone
offices for data collection.
·
Depending
on the website information, I had not got any financial in formation and data.
There was no other source of data and information regarding
Grameen phone except its own website.
Conclusion
By bringing electronic connectivity to rural Bangladesh,
GrameenPhone is delivering the digital revolution to the doorsteps of the poor
and unconnected. By being able to connect to urban areas or even to foreign
countries, a whole new world of opportunity is opening up for the villagers in
Bangladesh. Grameen Bank borrowers who provide the services are uplifting
themselves economically through a new means of income generation while at the
same time providing valuable phone service to their fellow villagers. The
telephone is a weapon against poverty.
* Grameen phone has created the digital
regulation in the field of telecommunication. This revolutionary success
should be strengthened further and
sustainable development of people of Bangladesh In this connection. I have some
recommendation as below:-
* To increase network coverage upto
interior area.
* To bring the all people of urban and
rural areas under Grameen phone.
* To decrease call charges or other
bonous of benefit in any manner may be given to the existing customers. So that
they can more use this phone.
* To popularize the GP to the rural
people, advertise and publicity program
may be initiated.
* Rural people who use GP may be given T
& T connection. So that they can communicate nationally and
internationally.
* The old users of urban areas may be
given T & T facilities gradually to more popularize G. P.
* To set up international network
coverage to bring GP international boundary.
* Lastly in the competitive market to
retain the customer, GP has to employ efficient man power, equipment increase
customer care center and Marketing strategy should be followed.