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Sayfuddin: 000575219

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Course BUSI1460: Adv Prof Dev & Res Course School/Level BU/PG
Coursework Long project proposal Assessment Weight 70.00%
Tutor EJ Lethbridge Submission Deadline 15/04/2010

Coursework is receipted on the understanding that it is the student's own work and that it has not,
in whole or part, been presented elsewhere for assessment. Where material has been used from
other sources it has been properly acknowledged in accordance with the University's Regulations
regarding Cheating and Plagiarism.

000575219 A.T.M Sayfuddin

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(Department of International Business & Economics)
Advanced Professional Development & Research (BUSI 1460)

Dissertation/Project Proposal & Plan

Student Name: A.T.M. Sayfuddin
Student ID Number: 000575219

(Dissertation Provisional title)

An Investigation on the Telecom

Industry of Bangladesh
How much potential does the telecom industry in Bangladesh has for a foreign

multinational (Vodafone) as a new entrant and what could be the proper approach to

penetrate into the market?

Declaration: This paper contains 4017 words excluding the course header shit, title page, page

of contents, footnotes, references and appendices.

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1. Introduction 5

2. Overall aim and objective 5-7

2.1. Problem statement 6

2.2. Scope of research 6

2.3. Target audience 6

3. Literature review 7-13

3.1. Relevant theories 9

3.1.1. Porters national diamond model 10

3.1.2. Porters five forces 11

3.1.3. Franklins entry strategies for global markets 12

3.2. Significance and relevance of the topic 12

4. Methodology 13

5. Data collection 15

6. Data analysis 17

7. Timescale and plan 19

8. Conclusion 21

9. List of bibliography 21

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List of Appendices:
Appendix 1: Dissertation timescale and plan 24

Appendix 2: Empirical information 26

List of Figures:
Figure 1: Theoretical framework 10

Figure 2: A model for qualitative data analysis 18

Figure 3: Number of subscribers from 2004 to 2011 28

List of tables:
Table 1: Timescale for the dissertation 20

Table 2: Economic position of Bangladesh 27

Table 3: Cultural differences between UK and Bangladesh 27

Table 4: Number of subscribers by telecom companies in Bangladesh 29

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1. Introduction:

As a result of globalization the world is becoming smaller. Companies are now going to new

geographic regions in pursuit of competitive advantage and greater profit. There are

numerous multinationals having their operations throughout the world, which is still

expanding. Consequently, there is no certainty that the company which does not have its

operation in a country this year will not commence doing its business in there from next year.

In relation to the concern, this paper renders a proposal for upcoming dissertation considering

a hypothetical case of expanding a companys operation towards a foreign market.

The overall proposal reflects on various aspects of the dissertation those include:

overall aim and objective, literature review, methodology, data collection, data analysis and

time scale & plan. The following parts illustrate in more details on the overall dissertation.

2. Overall aim and objective

The purpose of this project is to examine telecom industry of Bangladesh so as to investigate

how much potential the telecom industry of Bangladesh has that could be essential to take

into consideration for a foreign company before commencing business within this industry.

This paper also aims at identifying suitable strategy for penetrating into the market based on

the facts to be exposed by this investigation. Lastly, the paper may conclude with some

recommendations and show directions for further research.

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2.1. Problem Statement:

Based on the purpose of this research the following problem statement has been designed:

How much potential does the telecom industry in Bangladesh has for a foreign multinational

(Vodafone) as a new entrant and what could be the proper approach to penetrate into the


2.2. Scope of the research:

This research will seek for the answer in response to the problem statement demonstrated

above. It implies that the study will be directed in the light of theoretical framework. Taking

into consideration the timeframe allotted for the project, the research will strive to analyze as

deeply as possible. To meet the purpose of this research, three fundamental objectives have

been identified: firstly, investigating competitive position of Bangladesh as a business

destination; secondly, exploring rivalry within the telecom sector of the country; and lastly,

finding out proper entry strategy to enter the market.

2.3. Target Audience:

The overall research would draw attention from various types of people based on their

professions and areas of interest. But the professionals and experts in the similar field having

similar management responsibility are the focal people in this work. Mainly the personnel in

managerial position as like manager of international marketing, CEO, head of global

communication, manager of strategic alliance, manager of merger and acquisition, manager

of business development etc. are the main focal point of this study. This investigation would

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be valuable as a guideline in terms of decision making for their foreseeable reference. In

addition, this study would open a new door towards another prospective research work.

On the other side, this study would be useful for academic purposes also. Students in

the area of marketing, international business, management and academics for thesis and

research can be benefitted from this research. It might help them for improving their

knowledge and having a deeper insight into the topic.

At last, it could be helpful for any company having the interest to do business in the

market of Bangladesh, even if the company is from a different industry. This research work

can help both the companies from similar industry or from different industry as a basic

guideline and fundamental background for further investigation.

3. Literature Review:

Most of the research works require commencing with a review on the previous literatures or

studies relevant to the area of investigation. These may comprise books, articles from

journals, websites and other online sources (Ghauri &Gronhaug, 2005). Therefore, a range of

relevant articles and publications have been explored for my research through the university

databases and other online sources. The main words used for the search were

Telecommunication industry in Bangladesh, Expansion of Vodafone, Economic

recession and Bangladesh telecom and Market entry method etc.

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Among the available journals, articles and reports, the work of Zita (2004) named

Bangladesh is notable that unveiled the opportunities and prospects for doing business in

Bangladesh. The overall discussion in this paper can be divided into two parts. From one

side, it illustrated on Bangladesh as a country and on the other side, it also reflected on the

telecom industry within the country showing how much potential the market possesses. In

addition, the report titled as Doing Business 2010 Bangladesh published by World Bank is

also a valuable one. The report exposed the very recent economic condition of Bangladesh

and revealed the level of suitability for a foreign company to invest in the country. Another

research conducted by MD. Hasibul Hasan in collaboration with Ministry of Foreign Affairs

of Denmark investigated the telecom industry of Bangladesh in an extensive manner. The

paper named as Business Opportunity Study within the IT and Telecommunication Industry

in Bangladesh provides a range of useful and valuable information related to the dissertation

topic. Moreover, the annual report of Vodafone for the year 2009 has been found to be a very

helpful paper that helped understand the objective, mission, current strategy for expansion

and overall position of the company.

According to Hasan (2006), the telecom sector in Bangladesh had a huge prospect.

The report disclosed that the demand of consumers in telecom sector of Bangladesh was

rapidly increasing, which signified it as one of the most rapidly growing market in the world.

The forecast of BMI in 2006 indicated that the average growth of Bangladesh telecom

industry was expected to be 56% (see appendix 2, figure: 3). Based on forecast, within 2011

the number of mobile phone subscribers will reach at 115 millions, which was very much

encouraging for the foreign companies. As a result, Vodafone, which has its operation in the

neighbouring country India, also showed interest in 2008 to enter into Bangladesh telecom

market (Telecommunications Insight, 2010). But recently, because of the world economic

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recession the telecom sector in Bangladesh has gone through difficult times that created a

new dimension of competition in the market and posed greater challenges. According to the

quarterly economic update of Asian Development Bank, service sector in Bangladesh is

likely to face a decline in domestic demand together with lower trade for the year of 2010

(ADB, 2009). Therefore, this research may reveal some recent facts of Bangladesh telecom

sector after the recessionary affects and give some new directions for the foreign

multinationals to invest in this market.

3.1. Relevant theories:

In response to the research question, three basic aspects are deemed to be investigated for a

foreign multinational before investing in telecom sector of Bangladesh. Firstly, suitability of

Bangladesh as a country for a foreign multinational; secondly, suitability of the telecom

industry of Bangladesh as a market for the new entrant and; thirdly, finding out the possible

appropriate approach to penetrate into the market.

The aforementioned three aspects relate to three distinct theories, each of which can

be used in order to explore the relevant aspect in more details. First of all, Porters (1998)

Model of National Diamond will be used to assess the suitability of the country; next,

Porters (1998) five forces will be used to assess intensity of the telecom industry in

Bangladesh and finally, Franklins (1998) entry strategies for global markets will be used to

be aware of relevant factors that should be taken into consideration before adopting the entry


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The overall theoretical framework would be as follows:

Figure 1: Theoretical Framework

3.1.1 Porters (1998) National Diamond Model:

A valuable model developed by Porter (1998) named as Diamond Model is very much

relevant to this topic, because this model helps recognize the competitive location of a

country in the international competition. Conventionally, economic theory identifies limited

number of factors (land, position, natural resource, work force and size of local population) to

attain comparative advantage in certain country or region. But, according to Porter (1998),

only the aforementioned fundamental innate factors can barely ensure a sustainable industrial

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growth, rather plenty of these factors may destabilize competitive advantage. He identified

the concept of Clusters or four interconnected factors whereas the competitive advantage of

a country is the result of those advanced factors along with the actions in and among the

companies within clusters. In addition, these factors can be affected by the government. The

advanced factors for countries used in Porters Diamond Model include: a) Firm Strategy,

Structure and Rivalry; b) Demand Conditions; c) Related Supporting Industries and; d) Factor


3.1.2. Porters (1998) Five Forces:

Porters (1998) five forces introduces a very useful model in the global market that purposely

assess the marketplace and reveals the mere picture regarding the possible behaviour of that

market in case of barriers to entry, rivalry and threats of suppliers. The five forces are: threat

of substitute products and services, bargaining power of buyers, bargaining power of

suppliers, threat of new entrants and rivalry among the existing companies. These five forces

usually verify the degree of competition and thereby excellence of the market. Excellence in

this standpoint implies the profitability of the industry as a whole.

While selecting these two theories of Michael Porter, I recognized the significance of

mentioning the justification for choosing them. Since 1990s Michael Porter is well known as

a Strategy Guru. So many marketing scholars perceive his work as an influential and

ultimate resource for corporate strategy. Furthermore, I have been taught the theories of

Porter throughout the entire academic period, as a result I have a better idea on these theories

other than some others theory.

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3.1.3. Franklins (1998) entry strategies for global markets:

After assessing the suitability of market in the target country, it is necessary to determine the

means of entry into the target country, which is a big challenge. In this case Franklins (1998)

model of entry strategy can be of a great use that categorizes the methods of entry as well as

the facts that may have positive or negative impact on the companys selected entry strategy.

He had categorized the methods of international entry into three categories: a) Export entry

modes, b) Contractual entry modes and c) Investment entry modes

It should be mentioned here that, though, Cateora and Ghauri (2006) illustrated the

determining factors of an entry mode as like Franklin (1998), Franklins (1998) model is

easier to understand and apply, for which I have chosen this model.

3.2. Significance and Relevance of the topic:

Currently, telecommunication sector of Bangladesh is a lucrative one, which is believed to

have huge potentials and as a result, I have decided to do my dissertation on this sector. In

addition, my future plan is to build my career in this industry. Therefore, I believe the

dissertation on telecom industry of Bangladesh will give me an in-depth idea and relevant

knowledge that might be helpful in my professional life.

More importantly, most of the works investigated telecom industry of Bangladesh or

how to start up a new business in Bangladesh from the perspective of foreign multinationals

(Zita, 2004; World Bank, 2008; Hasan, 2006). But, none of them examined that if a global

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company wants to expand its business in telecom sector of Bangladesh then what should be

considered for this specialized industry before entering into the market and what should be

the entry strategy. In addition, after the recessionary affect in the global market there is no

recent investigation on this industry. All the works in this field had been done before the

economic downturn, which prompted me to do the research and reveal how much prospects

the telecom sector of Bangladesh still has for a new foreign entrant after the economic


4. Methodology:

In this research, for collecting and analyzing all the relevant information in a proper manner

so as to produce a reliable outcome, appropriate selection of research method is essentially

needed. However, selection of suitable methodology depends on how the research will be

conducted along with the purpose and research question of the study. Therefore, in this

research work, the overall investigation will be guided by the previously identified purpose

and research question. These will help throughout the research from compilation to analysis

of data in the light of theoretical framework.

In the selection of research of method, two fundamental kinds of method are

available: qualitative research and quantitative research. Qualitative research investigates

open-ended, in-depth and unstructured responds from respondents. According to Ghauri at al

(2005), qualitative research can also be conducted for international market research in order

to have a detailed insight into the problem and to identify related issues to be examined in the

succeeding research. Personal interviews, surveys, telephone and mail interviews are widely

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excepted methods for collection of information in qualitative research. One of the major

benefits of qualitative research method is that the respondents are asked open ended questions

that allow them to answer in their own words instead of limiting them to select from a range

of responses. The use of open ended questions enables the researcher to get responses, which

are rich, explicit and expected by him/her. In addition, as qualitative research allows asking

why or how, it may reveal various essential facts that had never been considered before

but significant and relevant to the research area. On the other side, qualitative research

method has some demerits also. Since, this method entails a few numbers of samples;

information collected from them may not always be reliable to generalize. But in this

research, this limitation may not be applicable, as the overall aim is to investigate the current

phenomena in Bangladesh telecom sector whereas the samples may include senior officials

from BTRC, some of the leading telecom companies in Bangladesh and Vodafone. Since

they have rich knowledge and expertise in this sector, responses from them may not loose


On the other side, quantitative research is used to obtain precise response that could

be demonstrated through specific measurement. In this kind of research, respondents are

requested to answer structured questionnaires or a favourable question formats (for instance,

yes/no). Individual interviews, interviews through email or telephone correspondence are

useful methods for this type of research. One of the major advantages of this method is that as

it allows measuring the phenomena, comparisons of the result can be done. In addition,

quantitative research very often entails a large number of samples, for which results are

usually reliable. In contrast, quantitative research method ignores feelings, motivations,

attitudes and opinions of both the researchers and respondents, as a result of which this

method fails to provide a comprehensive picture as like qualitative research method.

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Sometimes, problems of sampling, low rate of response also make the research

nonrepresentative. In essence, this type of research method is unable to present the cause and

effect relationships. But, in this research topic, as the main objective is not to measure the

phenomena but to have an in-depth picture of the a market so as to reveal the current trends

as mentioned earlier, quantitative research method has not been found best suitable.

Therefore, taking into consideration Ghauris view, qualitative research method has

been found to be suitable for this topic. In addition, this research method is more convenient

and appropriate to be conducted from both the perspective of my position and purpose of


5. Data Collection:

According to Ghauri & Gronhaug (2005), there are mainly two types of data based on the

source of information: primary data and secondary data. Primary data are basically gathered

by the researcher himself in response to his designed research question. But secondary data

are collected by someone else for more or less similar or totally different purposes.

In the light of purpose of this work, research question and the theoretical framework;

four basic types of information are considered essential to be collected that include

information on the target country (Bangladesh), telecom industry of Bangladesh, on the

company (Vodafone) and on the home country (UK) of the company. The overall research

work will be included of both primary and secondary data, though primary data will be less

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dominant throughout the research process as a result of having limitation to be physically

present in the field level (in target country and focal company).

According to World Bank (2001), there are certain issues, which are needed to be

considered before doing business in Bangladesh, first of which is the availability of

sufficient, relevant as well as reliable information regarding the countrys strength,

competitive position, investment opportunity, business and cultural atmosphere etc. In the

light of World Banks view, for the collection of secondary information, a range of online

sources have been explored, which are Nation Web Portal of Bangladesh, , chamber houses,

website of Bangladesh High Commission at United Kingdom, Board of Investment and other

online sources on the focal country, market and company. Among these, some reliable

sources have been found those include the official website of BTRC (Bangladesh

Telecommunication Regulatory Commission), website of BOI (Board of Investment),

Vodafones official webpage and webpage of CIA (Central Intelligence Agency). In addition,

there are numerous articles in newspapers, online journals, all of which could be significant

sources of secondary information.

In addition to secondary data, it is also essential to collect a range of primary

information so as to obtain answers of the formulated problem statement (Ghauri and

Gronhaug, 2005). Moreover, secondary information is not always appropriate in every

research as the purpose of collecting that information might be different. Therefore, primary

source can be more reliable and relevant to the research topic, since this information is

collected to meet the specific research objective. In this research, importance of collecting

some primary data from both company and the country side has been recognized in an

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attempt to support the secondary data to reach the research objective. The key method that

can be used to obtain primary information is distribution of questionnaire through email

correspondence. It might be essential to communicate with the officials of BTRC to get a

mere picture about the current situation of telecom industry of Bangladesh. In addition, the

company (Vodafone) could also be contacted in order to know their interest in this research

topic and to obtain some suggestions from the company.

The main problem that may arise in the process of data collection, more specifically

for primary data is the lack of direct relationships with the targeted bodies and concerned

authorities identified above to be communicated. Moreover, inability to physically meet the

concerned bodies is also another limitation that may hinder data collection. Therefore, the

research may need someones assistance to build up relationships with the identified bodies

for the successful collection of information. But, the matter of fact is that this research work

may serve some interest of both the company (Vodafone) and Bangladesh

Telecommunication Regulatory Commission. Such as, from the country side, current

government of Bangladesh is notably emphasizing on FDI because of economic recession

and from the focal company (Vodafone) side, previously Vodafone showed its interest to

enter into the telecom sector of Bangladesh. Therefore, cooperation from both sides is


6. Data Analysis:

For the analysis of data, all the findings are planned to be analyzed based on a framework,

whereas collected information will be categorized into three distinct segments: the target

country, the industry and the focal company. All the gathered data, then, will be segmented

under the related headings along with some associated subheadings.

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The overall analysis will be done on the basis of relevant theories and empirical

findings. More fundamentally, the information will be at first analysed in the light of

theoretical framework in response to research question. And, as mentioned above, for the

collection of data, qualitative research method will be used that emphasizes on detailed

understanding of the research area and is un-structured and exploratory in nature (Ghauri et

al, 2005). As a result, for the analysis of qualitative data, a model developed by Miles &

Huberman (1994) will be followed. This model consists of four stages, named: data

collection, data reduction, data display and drawing of conclusion. In the stage of data

collection, all the relevant information will be gathered, which will be followed by data

reduction. Data reduction involves focusing as well as selection and simplification of data.

Lastly, all the information will be compressed that will help to draw the conclusion.

Figure 2: A model for qualitative data analysis, adopted from Miles & Huberman (1994: 207)

All the secondary data will be gathered for all three segments (the target country, the

industry and the focal company), whereas primary data from BTRC will be amassed under

the heading of target country and industry. On the other side, other primary data that will be

collected from concerned body of Vodafone are considered to be amassed under the heading

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of focal company. The main purpose for gathering information of focal company is to

examine the companys existing expansion strategies, strengths and weaknesses that can help

find out the suitable strategy for the company to penetrate into Bangladesh.

After collecting related data for all three segments, firstly, the competitive position of

the target country will be assessed where information on country will be used for the analysis

through porters national diamond model. In addition to this, the model developed by Geert

Hofstede (1984) will be utilized to compare the cultural aspects of the home country (UK)

and host country (Bangladesh). The matter of fact is that Hofstede did not include

Bangladesh in his research; therefore, scores of India in his five cultural dimensions will be

used for the analysis, as the culture of India and Bangladesh is almost similar (See appendix


Next, data on the market of the target country will be utilized for analysis of the

current market intensity through Porters five forces. And, finally, with the use of Franklins

model, proper entry strategy will be selected and for this, collected data on the focal company

will be analyzed. However, some information about the host country will also be required for

finalizing the entry strategy.

7. Timescale and Plan:

According to the programme schedule, the formal work for dissertation will be commenced

from June, 2010 and the final work will be submitted by the end of September. Therefore, the

time table for the dissertation has been designed considering the confirmed timeframe by

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University of Greenwich. The table below illustrates a brief time table, which can be found in

more detail in the appendix (see appendix 1).

Activities Description Time Frame

Literature Review and Exploring existing 1st and 2nd week of June.
Developing Theoretical literatures related to the
Framework research topic and relating
with my case and
Designing a framework
based on the related
theories, in the light of
which subsequent analysis
will be conducted.
Designing Methodology Developing a structure 3rd week of June 4th week of June..
including selection of
research method for the
entire dissertation that will
be followed throughout the
research process
Designing Questionnaire and Collecting primary 1st, 2nd, 3rd and 4th week of July.
corresponding with BTRC information through an
and Vodafone open ended questionnaire to
senior authority of BTRC,
Bangladesh and Vodafone,
Data collection and Reviewing Collection of secondary 1st, 2nd and 3rd week of August.
information and reviewing
all the primary and
secondary data in the light
of theoretical framework.
Data analysis Analyzing all the collected 4th week of August and 1st, 2nd week
data through the previously of September.
identified theories in order
to meet the research
Finalization of Research Finalizing the research with 3rd and 4th week of September.
some recommendations and
making sure that the
research reveal a reliable
Table 1: Time Scale for the dissertation

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8. Conclusion:

This proposal has clearly identified the gap within the existing literatures and provides a

preliminary sketch of the overall dissertation through selection of suitable methodology,

determining the possible means of data collection, data analysis and developing a timeframe.

But, these may need some changes at certain phases, as this is just the beginning. The overall

work will grow to its maturity as the investigation reaches from deep to deeper.

List of Bibliography:

Bennett, R. & Blythe, J. (2002), International Marketing: Strategy Planning, Market Entry &
Implementation, United Kingdom: Kogan Page Limited.

Cooper, D. & Schindler, P. (2008), Business Research Methods. 10th edn. McGraw-Hill: New

Dess, G., Lumpkin, G. & Eisner, A. (2008), Strategic Management: text and cases. 4th edn.
McGraw-Hill/Irwin: New York.

Franklin, R. (1998), Entry Strategies for International Markets, Lexington Books: New York.

Ghauri, P. & Gronhaug, K. (2005), Research Methods in Business Studies. Prentice Hall:

Mead, R. (1999), International Managemetn. 2nd edn. Blackwell: United States.

Michael, P. (1998), On Competition, Harvard Business School Publishing: United States.

Miller, A. (1998), Strategic Management. 3rd edn. Irwin/McGraw-Hill: United States.

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BTRC (2010), Mobile Phone Subscribers in Bangladesh, Available at: (Accessed: 24
February 2010)

Doing Business (2010), Explore Economies. Available at: . (Accessed: 25 February

Hasan, M. (2006), Business Opportunity Study within the IT an Telecommunication Industry

in Bangladesh. Available at:
BB6F-5CE2CED3D52A/0/Bangladeshwww.pdf. (Accessed: 26 February 2010)

Reuters (2009), Ericsson urges Bangladesh to issue 3G licences. Available at: (Accessed: 25 February 2010)

Vodafone (2009), Annual Report for the year ended 31st March, 2009. Available at: .
(Accessed: 25 February 2010)

World Bank, Doing Business 2010 Bangladesh, Available at: (Accessed: 28 February 2010)

Yusuf, M. & Alam, Q. (2007a), Liberalisation of the Mobile Phone Sector in Bangladesh,
The Daily Star, 11 July 2007(online edition).

Yusuf, M. & Alam, Q. (2007b), Mobile Phone Sector in Bangladesh, The Daily Star, 12
July 2007(online edition).

Official Websites:

CIA (2010), THE WORLD FACTBOOK, Available at: (Accessed: 28 February

Vodafone (2004), We will be the communications leader in an increasingly connected world.

Available at: (Accessed:
25 February 2010)


Aktel (2010), About Aktel: About us, Available at:

(Accessed: 27 February 2010)

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Banglalink (2010), About Banglalink: Who is behind us. Available at: (Accessed: 27 February 2010)

BOI (2010), BOI Investor Services. Available at:

services (Accessed: 24 February 2010)

BOI (2010), Investment Climate. Available at:

and-trade/investment-climate (Accessed: 27 February 2010)

Clearly Cultural (2009), Power Distance Index. Available at:
(Accessed: 27 February 2010)

Grameen Phone (2010), Grameen Phone: About us. Available at: (Accessed: 27 February 2010).

Ideafinder (2006), One Small Step. Available at: (Accessed: 01 March 2010)

TeleTalk (2010), Company Overview, Available at: (Accessed: 28

February 2010)

Telecommunications Insight (2010), Vodafone Eyes Bangladesh, Reports Strong Results, Available at:
(Accessed: 02 March 2010)

Urban Ministry (2010), Geert Hofstede Cultural Dimensions, Available at: (Accessed: 26
February 2010)

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Appendix 1: Dissertation time scale and plan

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Time scale and plan continued

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Appendix 2: Empirical information

Here, the collected empirical information is illustrated. All the information is categorized

under three main headlines all of which are relevant with the aforementioned theories. Under

the headlines, information regarding the target country where the business intends to expand

as well as the intensity of the telecom industry are depicted; lastly a short discussion on the

company is also illustrated.

A. Host Country: Bangladesh

The population and transportation of Bangladesh should be mentioned at first. Bangladesh

is a land of river with numerous potentials. The total population of the country is 156,050,883

(until July, 2009) with a growth rate of 1.3% (CIA, 2010). The country has 16 airports,

among which 15 airports have paved runway and the 1 has unpaved runway. The length of

railway lines and road ways are almost 2,768 km and 239, 226 km. Besides, the water ways

cover almost 8,370km.

The communication systems in Bangladesh include mobile, telephone, radio, TV,

internet etc. there are three types of stations for radio broadcast: shortwave 2, AM 15 and FM

13. As of year 2009, there are more than 600,000 internet users in Bangladesh with the

mobile density of 13 per 100 persons (Reuters, 2010). In addition, the country has a

connection with fibre optic submarine cable (CIA, 2010).

The economy of Bangladesh is developing gradually. As of 2009, the real growth rate

of GDP was 5.7% together with the GDP per capita of $1600. The country had been ranked

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as 107th country among the 178 countries in the world. Table 1 shows the position of

Bangladesh in economic aspect on the basis of various criteria:

Criteria Ranking
Employing worker 124
Protecting investors 20
To Deal with license 116
Tax paying 89
To close business 108
Table 2: Economic Position of Bangladesh; adopted from Doing Business (2010)

From the Socio-cultural perspective, the cultural of Bangladesh is far different from

UK1. This can be explained by Hofstedes cultural dimension, which is depicted as follows:


UK 35 89 66 35 25
Bangladesh 80 20 56 60 61
Table 3: Cultural Differences between UK and Bangladesh; adopted from Urban (2010)

In spite of the differences illustrated above, Bangladesh is still lucrative for foreign

investment as the country has a moderate policy to entice foreign investment. At present,

there exists 100 percent foreign investment opportunity and companies do not need any

consent from government. Instead, they need to be registered with the BOI (Board of

Investment, Bangladesh).

As this paper is about expanding (Hypothetically) Vodafones operation from its home country UK to
Bangladesh, it is deemed necessary to illustrate this two countries cultural differences so as to analyse the target
country by Porters national diamond model.

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B. The Market: Telecom Industry of Bangladesh

The demand of consumers in telecom sector of Bangladesh is rapidly increasing that

characterizes it as one of the most rapidly growing market in the world. In the following

figure provided by BMI, the market growth of this sector has been portrayed showing an

average growth of 56 percent from 2007 to 2011. Therefore, based on forecast, within 2011

the number of mobile phone subscribers will reach at 115 millions, which is very much

encouraging for the foreign companies.

Figure 3: Number of subscribers (forecast) from 2004 to 2011; adopted from Hasan (2006)

In reality, the number is not too far from the estimated figure. As of January, 2010 total

number of active mobile phone subscribers stood at 53.83 millions. As a result of economic

recession, the expected growth rate could not have been achieved, but now the situation is


At present, there are six companies operating in telecom sector of Bangladesh named

Citycell, Teletalk, Warid Telecom, Aktel, Banglalink and Grameen Phone. All these

companies are operating in joint venture except Banglalink (100% owned by Orascom) and

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Teletalk (State-owned). The table bellow shows the number of subscribers of six companies

in January, 2010:

Companies Number of Subscribers

(in million)
Grameen Phone 23.48
Aktel 10.31
Banglalink 14.07
Citycell 1.94
Teletalk 1.02
Warid 3.01
Table 4: Number of subscribers by telecom companies in Bangladesh, adopted from BTRC (2010)

Considering the intense competition in telecom sector of Bangladesh, it is quite clear

that there is not enough room for another foreign entrant to do business as a rival in this

sector. But, there are huge possibilities for data as well as broadband internet service

providers who are able to provide most recent technology, for instance LTE, HSPA and

WiMax and so on.

C. The Company: Vodafone Group plc

Vodafone is a British transnational telecom company having its headquarter in Berkshire,

UK. Based on revenue, it is the biggest telecommunication company with almost 71.2

billion (as of November, 2009) market value. The company has a noteworthy existence in

United States, Europe, Africa, Middle East and Asia Pacific through its joint ventures,

subsidiary undertakings, investments and associated undertakings. In USA the companys

affiliated undertaking is operating as Verizon Wireless. Over the previous few years,

Vodafone has got into agreement with various companies from a variety of countries where

the company does not have an equity stake. According to the terms and conditions of these

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agreements, Vodafone and its associated operators collaborate in marketing and development

of international products and services. As of December 2009, on the basis of mobile telecom

undertakings where Vodafone had ownership, the company had 333 million customers apart

from paging customers.