Flash Report /
Bangladesh

Bangladesh: Restriction on Grameenphone SIM card sale is withdrawn

  • The ban was introduced on June 29 2022. It affected Q3 and Q4 of 2022.

  • GP lost 4.5mn or 5.3% customers from June 2022 base. The impact was c. 3% of revenue in Q3 2022.

  • We reiterate buy on valuation with updated TP BDT 390 (ETR 44.7%) with an expected dividend yield of 8.7%.

Shopnil Paul
Shopnil Paul

Research Associate

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IDLC Securities
3 January 2023
Published byIDLC Securities

On 29th June, 2022, on the ground of the poor service quality, the Bangladesh Telecommunication Regulatory Authority (BTRC) imposed a ban on selling new and old SIM Card for Grameenphone and instructed them to improve their service quality, especially to bring down the call drop rate.

Because of the high demand for Grameenphone SIM, on 20th November 2022, BTRC allowed GP to sell 78,000 SIM cards to selective public and private corporate clients, including Bangladesh Armed Forces. Finally, BTRC withdrew the SIM card sale banned of Grameenphone on 2nd January, 2023.

Please note that, Grameenphone’s customer base was 84.8mn in June, which came down to 80.3mn by the end of November, 2022. During this period, Grameenphone lost 4.5mn customers, which means a 5.3% decline in its customer base. According to the management, after the ban, revenue has negatively affected by c. 3% in Q3 2022.

We reiterate buy on valuation with updated TP BDT 390 (ETR 44.7%) with an expected dividend yield of 8.7%. It implies 13.0x 2022f PE, 6.0x 2023f EV/EBIDTA, and 3.6x EV/Sales.