The rise and fall of Anik Telecom: How a warranty card brought down a successful business

This article from our archives was published in 14 February, 2023

In 1996, 36-year-old Mashiul Azam, along with a few of his friends, set up a phone fax shop on the second floor of the Mogbazar Plaza market in the capital. They named it Anik Telecom. 

The business venture started off as an outsourcing company that provided telecommunication-related servicing work to the country's first mobile phone operator, Citycell, as well as to other companies.

But within a few years, Anik Telecom became a mobile phone accessories giant in its own right with two products – its mobile phone chargers and batteries.   

For more than a decade, Anik Telecom's products became ubiquitous across the country. The company saw a booming business thanks to its quality products and six-month replacement guarantee cards (the card guaranteed customers a replacement, free of cost, if the charger stops working within six months of its purchase). 

At its peak in 2010, the company would sell around 5 lakh mobile phone chargers in a single month, and batteries too, amounting to their record-high Tk2.5 crore sales. 

"We held an 80% market share of mobile phone chargers and batteries in the country. [Meaning] if there was a demand for 100 chargers, we would provide 80 chargers" 63-year-old Mashiul Azam, the managing director of Anik Telecom Limited recently told The Business Standard. 

"So much so, that we found it hard to supply," Mashiul recalled, sitting at his Uttara office. 

But things took a turn for the worse. 

Mashiul Azam's business faltered at first and then collapsed mainly because of retailers' and customers' exploitative tendencies and blatant misuse of Mashiul's otherwise strategic business tactic to expand his customer base: the six-month replacement guarantee cards. 

And perhaps, Mashiul's lenient ways are to blame too. "I shouldn't have been so liberal in providing blank replacement guarantee cards. I think no one should do it," lamented Mashiul.

Currently, the company is focused on manufacturing electrical equipment like bulb holders, switches and other electrical lamps on a small scale under the Anik Telecom brand, which consciously decided not to provide any replacement guarantee for its electrical products. 

We take a deep dive into the rise and fall of a business, which budded at Moghbazar Plaza market and garnered sales in crores at its peak.  

How the business grew

Anik Telecom worked extensively with its first client, Citycell, in 1996. For instance, they set up the antenna and Citycell's new connections for its new customers, installed the PABX stations for different companies and provided other technical services.    

At the same time, Mashiul worked for Citycell's other product, Telluler, a fixed phone which required an antenna to provide a good network. It was particularly residents in rural Bangladesh who would avail phone fax service with the Citycell's connection for their business. 

Back in the early days, Anik Telecom would import the antenna from Singapore and China. But around 1997, they started to locally develop the antenna – making it the first time that they developed mobile phone accessories in Bangladesh. 

Anik Telecom became a phone accessories giant thanks to its mobile phone chargers and batteries. Photo: Courtesy

And, the demand for the antenna kept growing. 

"At that time, the price of a Citycell mobile phone with a connection would cost more than one lakh takas," said Mashiul, who grew up in the Moghbazar T&T colony. Mashiul's father, Hatem Ali, worked for the Telegraph and Telephone Department (T&T) as an assistant engineer.   

Every now and then, Mashiul would visit Citycell's main office in Mohakhali. He started to become familiar with Citycell's sales service officials. 

Customers often asked Citycell for spare mobile phone batteries and chargers. This prompted a Citycell official to ask Mashiul Azam whether Anik Telecom could import some batteries and chargers. 

Additionally, the demand for mobile phone accessories further increased after Grameenphone entered the market in 1997. 

Anik Telecom's next business move

In 1998, "we began to import mobile phone accessories including mobile chargers, batteries and other things from China," said Mashiul. 

In the beginning, the demand was around 200 to 500 pieces monthly. At that time, Anik Telecom would sell a charger for Tk500 to Tk700. They would import the charger for Tk200 to Tk250. When Mashiul saw that the demand kept rising with time, he thought why not make these things in Bangladesh by importing the parts? 

"Nowadays, you can charge all types of mobile phones with only three ports including C- type, mini USB etc. The situation was not like that in those days. The port of Siemens was different from that of Philips and Erricson while Nokia had different ports for different models. There were lots of phones," said Mashiul, who completed his higher secondary school exam from Government Titumir College.

"I bought 100 Philip's chargers, but later I saw that I could sell only 20 chargers. In the meantime, the model disappeared from the market. So we, as well as retailers, needed to sell the product with a bit of a high margin to offset a loss," said Mashiul, explaining the 2000s market.

Dealers and retailers from different parts of the country – who were already familiar with the brand because of its antenna and mobile phone accessories – began to come to Anik Telecom's shop at Moghbazar to buy chargers and batteries.

"We would say in the advertisements that if you are a mobile phone user, keep this advertisement with you, it can be useful for you, someday," said Mashiul. 

Due to an uptick in demand and the consequently favourable business environment, Mashiul decided to spread the company's wings and assemble mobile phone chargers in Bangladesh. They imported different parts like transformers, IC, rectifiers, capacitors and resistance and PCB boards and assembled the parts to make mobile phone chargers in a rented house behind its shop in Moghbazar. 

"To make casings of the chargers, we brought iron-made mould from China – which was high in demand at that time," said Mashiul, adding. "We started producing the casings with China-made mould from a rented machine on a contract basis in Shanir Akhra in the capital." 

Mashiul also said that the chargers for Nokia phones were the highest in demand in the market at that time and, in effect, the demand for Nokia 3310, Nokia 5110 and Nokia 1610 phone chargers was the highest. Additionally, Siemens S6 and S4 phone chargers were also in high demand.  

The Achilles' heel 

People exploited Anik Telecom's blank replacement guarantee cards for its mobile phone chargers, according to Mashiul, particularly dealers and retailers.

To properly track the six-month validity, it was up to the dealers and retailers to fill up the blank guarantee card at the time of a customer's purchase. And in choosing not to do so, chargers could be returned, let's say after years of use, with a falsified date of purchase filled in on the card.

This morphed into "if you buy a charger from me, you can use it forever because you will come to me at the end of the fifth month [with a falsified date]," said Mashiul, "It worked like a boomerang. Some retailers and dealers abused the blank guarantee card facility a lot." 

"[Even] many people came to me to get a new charger even after damaging the old one purposefully at the end of the fifth month," he added. 

And in cases when Mashiul failed to provide a replacement, he had to return the cash. "I should not have done it in the context of Bangladesh," said Mashiul Azam. "I had to come out of the chargers and battery business due to the tyranny of the replacement guarantee."

According to the managing director, some dealers and retailers also charged customers Tk10 to Tk20 for a free replacement. 

In 2010, at its peak, Anik Telecom had around 100 dealers across the country. And many dealers began to set up their own shops to make chargers which looked like Anik's. "And they began to sell the chargers at half the price. The price of Anik Telecom's charger was Tk70 to Tk80 while they sold their chargers for Tk40," said Mashiul.    

Even many of Mashiul's own employees launched their 'charger' business after quitting their jobs. "Because they had already learned the nuts and bolts of the business," said Mashiul, adding that many people still use the name Anik with different products for its popularity and its demand. 

Anik Telecom's battery suffered nearly the same fate 

In 2009, Anik Telecom sold a record seven lakh batteries in a single month. And on average, they would sell 1 to 1.5 lakh batteries per month, according to Mashiul. Many mobile phone companies launched phones at a low price (for instance people could buy a handset for Tk900) which came with a battery of short lifespan. For this reason, the demand for batteries skyrocketed. 

At the time, Anik Telecom would sell a 2,200-ampere lithium battery for Nokia 3310; the phone would run for three to four days with only one charge. The price of the battery was Tk220. "The label I used in my battery would cost Tk3.5," said Mashiul. 

Batteries sold for Tk35, Tk40 and Tk70 based on the quality in the Gulistan market. "The problem with a battery is that you cannot say how long a battery will run by just looking at the product [battery]," said Mashiul Azam.  

So the scope for fraud was vast. Additionally, some businessmen imported cheap low-quality Chinese batteries to make more profit. Many attached Anik Telecom's label to those batteries to make a sale.  

"One day a bank manager told me that the quality of my battery has become poor, it cannot retain charge for more than one day. After opening the phone [to see the battery myself], I saw that my brand label was attached to the battery but the battery wasn't my product," recalled Mashiul. 

"You cannot tell the difference, you cannot tell whether it is Anik's or not; we fell into an awkward situation," said Mashiul Azam.  

At one point, there were 220 types and sizes of batteries in the market. Businessmen imported a huge number of batteries and people would buy batteries for Tk10 to Tk15 to make torch lights and toys. 

Mashiul Azam said that at one stage, Anik Telecom had to give back money when it realised that they no longer had any batteries in its stock to fulfil 'replacement guarantee cards.' 

At the end of 2012, Anik Telecom arrived at a situation where the chargers and batteries it sold kept coming back wholesale. "For example, in a month, we sold products worth Tk5 lakh, and we replaced all the products worth Tk5 lakh. We reached such a point [in 2012] that we could not recognise our own batteries," said Mashiul.

"Some people have even gone to China and made our hologram in China; and they started selling low-quality batteries with our hologram," added Mashiul. 

Time for retreat 

In 2011, Mashiul Azam told his dealers and retailers that he would give 10% products in advance, but he would not give a replacement guarantee any longer. He said that in the beginning, dealers and retailers welcomed the decision. But later when they learned that the replacement was more profitable, they demanded 15% of products in advance. 

"I even gave them 15% products in advance and told them not to come for a replacement any longer. Slowly, dealers and retailers started to avoid buying my products," said Mashiul. 

Many retailers even told their customers that Anik Telecom would no longer give the replacement card and encouraged customers to buy products from other companies. 

"When we became stricter on the issue, they said that they will no longer buy our products. Finally, I stopped the replacement warranty completely in 2018," said Mashiul. 

Dealers and retailers started to write the date of sale (keeping it within six months) on the blank guarantee cards they already had, and the chargers and battery replacement poured in droves. 

It took three more years for Anik Telecom to ride out the waves. "There is no sale, but the chargers and batteries kept coming," said Mashiul, "It devastated my business."    

In 2018, Mashiul Azam thought of doing business with such an item that would not require replacement and accordingly, Anik Telecom started manufacturing electrical products like switches, holders, lamps and other electrical products. And there is no guarantee card. 

However, Anik Telecom still sells mobile chargers on a very small scale on the online market, such as Daraz – and the brand still gives a guarantee card, but now they sell the product and fill up the guarantee card by themselves.