The mobile magic in rural economy
According to Bangladesh Bureau of Statistics (BBS), the contribution of mobile operators to GDP is 0.89%
Sufia Khatun, a widow from Atharobari union of Ishwarganj in Mymensingh, got a mobile handset from Grameenphone with its "Palli Phone" package in the late 1990s as a microcredit borrower. Grameenphone – launched on 26 March 1997 – provided the package to around two lakh people during that time.
It was the beginning of a new journey in Sufia's life that has changed the economic condition of her family forever.
To turn the cell-phone into a source of income – which was also the motto of the "Palli Phone" initiative, her eldest son Ujjal Hossain set up a shop named "Ma Telecom" with only a chair and a table at the Atharobari bus stand on 1 January 2000. The small venture, however, created a stir among the local people as they could then talk to their relatives living in different parts of the country using the handset in exchange for money.
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After two decades, Ujjal now runs a shop that sells mobile phones and recharges mobile accounts. His business is now worth more than Tk1 crore and has 10 employees, including three of his brothers. He has also bought another shop in the market, built a three-storey building, and bought some arable land.
Sufia Khatun, now 80 years old, attributes everything that her family has achieved to the spread of mobile phone services in the country.
Like Sufia and her family, millions of people living in rural areas of the country have witnessed their way of living improve significantly over the past 25 years, thanks to the spread of mobile phone based services. The spread of mobile internet has revolutionised the scenario over the last decade helping the commencement and thriving of e-commerce, freelancing, ridesharing services, mobile banking etc.
The big breakthrough came only after the government opened the mobile telephone service allowing three operators to enter the market in 1997 – a move that broke the monopoly and made the mobile phone a device for all. That was the beginning of a new era that connected the villages with the world and brought rapid changes in rural life and economy.
According to Bangladesh Bureau of Statistics (BBS), the contribution of mobile operators to GDP is 0.89%. In the last financial year, the country's mobile operators provided services worth more than Tk37,000crore.
As per Global System for Mobile Association (GSMA), the contribution of mobile operators to GDP would be 5.3%, if the other sectors related to mobile services are brought into the equation.
In a report released in March this year, the GSMA said mobile remains the primary means of internet access and continues to be the principal technology for reaching the underserved, especially low-income populations, women, and those in rural areas in Bangladesh.
As per the GSMA, the sector contributed $16 billion to the country's economy in 2019.
However, a research by Asian Development Bank Institute (ADBI) suggests that an increase of 1 percentage point in the number of internet users would help Bangladesh's GDP grow by 0.11%.
In the last 15 years, the contribution of mobile services to GDP has increased 6.5 times from Tk4,017crore in FY06, as per the Bangladesh Bureau of Statistics (BBS).
According to a research by Monzur Hossain, research director at the Bangladesh Institute of Development Studies (BIDS), and HussainSamad, former researcher at the World Bank, the use of mobile phones is increasing the income of rural people by around 10%.
Meanwhile, Global Connectivity Index (GCI) data reveal that Bangladesh was among the top four economies along with Ukraine, South Africa, and Algeria with remarkable improvement and the fastest growth in the adoption of the digital economy between 2015 and 2019.
Business and agriculture
According to people concerned, mobile phones along with the internet have facilitated business and agriculture in such a way which was unimaginable to the rural population a decade earlier.
Tapas Banik, a lungi and saree seller in Kendua of Netrakona, buys most of the products for his shop from Narsingdi, Keraniganj, Naryangaj, Sirajganj and Pabna.
"Once I had to visit all these places in person to buy all the products with cash. Now I can do all the jobs via video calls through mobile phones and pay the money through online banking," he said.
Aktarul Islam, a farmer from Durgapur village in Rangpur, said, "Now we can know the price of any vegetable in Dhaka from the village through mobile phone which enables us to get a fair price."
Sultan Mia who is involved in organic farming said, "Several organic vegetable sellers in the capital collect products from me. They send the price through mobile financial services."
Kajal Mia, a fish farmer from Kendua, learned about different diseases of fish and their remedy from YouTube videos. "Now I can get the medicine quickly by communicating with pharmacies via mobile phone. This has reduced the risk of diseases in my farm," he said.
According to sources, the government has already launched an agriculture hotline service for farmers.
Revolution in freelancing and ridesharing
According to the ICT Division under the Ministry of Posts, Telecommunications, and Information Technology, there are around 650,000 registered freelancers in the country, of whom about 500,000 are working on a regular basis.
Ataur Rahman, a resident of Dhargaon village in Nandail, Mymensingh, could not find a job after completing graduation. He took IT training and started working as an outsourcer in Mymensingh city. After the launch of 4G service on mobile phones, he returned to his village to work on his own. He also engaged some youth of the village in his project.
"I earn around $150 per month working in a digital platform named Microworkers. I also earn several lakh taka per month with my team," he told The Business Standard.
Having benefited from the advantages of lower cost, fewer risks, and less time, many large organisations from developed economies such as the US, the UK, Japan, and Australia have been providing IT outsourcing jobs to developing and emerging digital economies like Bangladesh.
However, ride sharing service has become a fast-growing sector in the country after its inception through Uber in 2016. By 2019, 138,957 people were involved in this sector, as per BBS.
In one year, the value of services produced in the ride-sharing sector is Tk10,954crore.
E-commerce services
According to the e-Commerce Association of Bangladesh (e-CAB), around 2,500 e-commerce sites are operating in Bangladesh selling products worth over $2 billion. Bangladesh is the 46th largest country globally in terms of e-commerce revenue.
Facebook has become an indispensable platform of online business; more than 300,000 Bangladeshi stores are operating through Facebook.
According to the e-Commerce Association of Bangladesh (e-CAB), the e-commerce industry in Bangladesh revolutionised during the pandemic with an increase in online sales by 70%–80% in July–September 2020.
According to Statista, a business data platform, by 2023 the e-commerce market size will be $3 billion in Bangladesh.
Business recovery and employment
The businesses of micro, small and medium enterprises shrunk by 57% due to the pandemic in 2020 which recovered by 77% at the end of the year. But, the ADBI says the business recovery of MSMEs that use digital technology was 88%.
Firms that use mobile financial services also reported that their sales increased by over 60% during the pandemic, indicating a positive role of MFS in facilitating businesses.
The ADBI study identifies mobile penetration as one of the key driving factors for the digitisation that enhances labour participation rate and workers' productivity.
"Digitalisation not only drives technological innovation and process re-engineering to support the country's industrial and service sector to fuel economic growth but it also acts as a driver for large-scale employment generation using digital platforms," it says.
Data shows massive employment has been created in rural areas in the mobile services sector.
Currently, 14 factories in the country are manufacturing phones including foreign brands which are meeting 63% of the domestic demand. They have also employed about 25,000 people.
According to the Bangladesh Cell Phone Repair Technician Association (BCPRTA), about 10 lakh people are working in the handset repairing sector.
Bangladesh Bank data shows 13 banks are providing financial services through mobile phones. The number of agents in this sector is 11.2 lakh.
Mobile-based financial services are playing an important role in providing cash assistance for the implementation of the government's food-for-work programme, employment for the extremely poor, and social security programmes.
During the Eid festival last year, the government provided Tk2,500 through MFS to 36 lakh poor families who were affected by the pandemic. Mobile services have also been being used for several years to provide stipends to students at the primary and secondary levels.
