VEON’s Banglalink and Robi Axiata Partner to Explore Network Sharing to Expand 4G Access in Bangladesh
VEON announces that its Bangladeshi operator, Banglalink, has signed an MoU with Robi Axiata to explore network sharing, aimed at expanding 4G coverage and improving network performance in Bangladesh.
This collaboration promotes an 'asset-light' business model, aligning with VEON's strategy and environmental sustainability goals.
The move is expected to enhance customer experience, reduce resource duplication, and improve operational efficiency.
Banglalink has been proactive in expanding its 4G services, including a previous MoU with Teletalk and the sale of part of its towers to Summit Towers
- Banglalink's MoU with Robi Axiata aims to expand 4G coverage in Bangladesh.
- The collaboration supports an 'asset-light' business model, reducing costs.
- Enhanced network performance is expected to improve customer experience.
- The alliance aligns with environmental sustainability goals.
- Banglalink has previously expanded 4G services through strategic partnerships.
- Efficient resource utilization is a priority, with steps like phasing out 3G.
- The impact of network sharing on financial performance is uncertain.
- Operational integration challenges may arise between Banglalink and Robi.
- Market competition may intensify with network sharing agreements.
Insights
The Memorandum of Understanding (MoU) between Banglalink and Robi to explore network sharing is a notable strategic move in the telecommunications sector of Bangladesh. This initiative aligns with the industry's trend towards infrastructure sharing, an essential element for reducing operational costs and capital expenditure. By sharing resources, both companies can better manage their expenditures on network expansion and maintenance. This strategy enables them to focus on enhancing service quality rather than building redundant infrastructure.
For investors, this collaboration signals a potential for improved profitability and operational efficiency. In the short term, the announcement itself may not immediately impact financials, but the long-term benefits of a successful partnership include cost savings and expanded service coverage, which could translate into better customer retention and acquisition. The market tends to view such strategic alliances positively, as they often lead to more stable financial performance.
Moreover, this move supports the 'asset-light' business model, which is becoming more prevalent in the telecom industry. This model helps companies remain agile and financially stable by minimizing investments in physical infrastructure while maximizing the use of existing assets.
From an environmental sustainability perspective, this collaboration is highly beneficial. Network sharing can significantly reduce energy consumption and the carbon footprint of telecom operations. By consolidating their infrastructure, Banglalink and Robi can avoid the environmental impact of building and maintaining separate networks. This move underlines the companies' commitment to sustainability and aligns with global trends towards reducing greenhouse gas emissions in the telecom sector.
For stakeholders, this indicates that both companies are forward-thinking and responsible corporate citizens. Such initiatives can enhance their reputations and appeal to the increasingly eco-conscious consumer base. Additionally, it could potentially open up opportunities for government incentives or support, given the alignment with national sustainability goals.
The financial implications of this MoU should not be overlooked. By sharing network infrastructure, both Banglalink and Robi can achieve significant cost efficiencies. These savings can be redirected towards further technological advancements or competitive pricing strategies, which are important in a highly competitive market like Bangladesh. This collaboration also reduces the risk of capital-intensive investments, allowing both companies to maintain healthier balance sheets.
Furthermore, the reduced capital expenditure and operational costs can lead to improved margins, which is a positive indicator for investors. This strategy represents a prudent fiscal approach, reflecting sound management decisions aimed at long-term financial health and market competitiveness.
Amsterdam and Dhaka, 20 May 2024: VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a global digital operator that provides converged connectivity and online services, announces that Banglalink, its digital operator in Bangladesh, has signed a Memorandum of Understanding (MoU) with Robi, second largest mobile operator in the Bangladesh and a subsidiary of Axiata Group, to explore potential sharing and optimization of network resources, aiming to expand 4G coverage and enhance network performance.
Infrastructure sharing promotes an “asset-light” business model in line with VEON and Banglalink’s strategy. It supports the customer experience and environmental sustainability goals of both Banglalink and Robi. A successful collaboration would bring wider 4G coverage and improved network quality for customers of both operators, reduce duplications and enable more efficient utilisation of resources, including energy.
“This collaboration represents a significant development for the future of digitalisation in Bangladesh. This first step to explore network sharing will allow Banglalink and Robi to generate efficiencies which will serve the customers of both operators and the country as a whole, in line with Smart Bangladesh Vision 2041. We look forward to unlocking the potential that this collaboration entails; and would like to commend the Government of Bangladesh for promoting an investment landscape that promotes growth, sustainability and efficiency in our industry by supporting collaboration and commitment to innovation,” said Kaan Terzioglu, CEO of VEON.
The collaboration with Robi Axiata is the latest among a number of steps that Banglalink has taken to expand its 4G services with an asset-light approach.
The operator has previously signed an MoU for network sharing with Teletalk, the fourth largest operator in Bangladesh. Earlier this year, it completed the sale of part of its towers portfolio to Summit Towers Limited, a subsidiary of Summit Communications, the largest telecommunications infrastructure company in the country. Banglalink has also taken other steps in prioritising the efficient use of its resources, recently becoming the first operator in the country to phase out 3G.
About VEON
VEON is a digital operator that provides converged connectivity and digital services to nearly 160 million customers. Operating across six countries that are home to more than
Disclaimer
This release contains “forward-looking statements,” as the phrase is defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical facts, and include statements relating to, among other things, VEON’s strategy, investment and partnership plans. Forward-looking statements are inherently subject to risks and uncertainties, many of which VEON cannot predict with accuracy and some of which VEON might not anticipate. The forward-looking statements contained in this release speak only as of the date of this release. VEON does not undertake to publicly update, except as required by U.S. federal securities laws, any forward-looking statement to reflect events or circumstances after such dates or to reflect the occurrence of unanticipated events.
Contact Information
VEON
Hande Asik
Group Director of Communications
pr@veon.com
TUVA Partners
Julian Tanner
Julian.tanner@tuvapartners.com
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FAQ
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