Four stage model based on GP

Executive Summary This assignment the result of the study of the four stages model of change based on Banglalink which is a popular mobile operator in Bangladesh. The ‘four stage model’ of change in changing economics for well established companies can be better understood and appreciated. Here I try to explain these terms on the basis of business specially the background of Banglalink. The objective of my study is to analyze as their dealing with customers, non-profit activities, revenues and revenue down history, marketing strategy and their advertising system. Banglalink now delivering of the digital revolution to the doorsteps of the poor and remote part of the country. Banglalink’s global system for mobile on GSM technology which is so widespread. Banglalink have sufficient resources to engage in product development and advertising by maintain the increased foreign competition limit pricing and technological advance. Introduction

November 28, 1996. Grameenphone was offered a cellular license in Bangladesh by the ministry of posts and telecommunications. November 26, 1997. Grameenphone launched its services on the independent day of Bangladesh. November 16, 2014. After almost of 18 years of operation, Grameenphone has now over the 37.2 million subscribers Grameenphone is the leading telecommunication service provider in the country. Starting its operations on March 26, 1997, the independence day of Bangladesh, Grameenphone has come a long way. It is a joint venture enterprise between telenor (62%), the largest telecommunications service provider in Norway with mobile phone operations in 12 other countries, and Grameen Telecom corporation (38%), a non-profit sister concern of the internationally acclaimed micro-credit pioneer Grameen Bank.

Overview of ‘ the four stages model of change’
The four-stage model shows how changing economic conditions affect well-established firms Stage I: Cost Plus “The good old days”. This refers to the ability of a well-established firm to dominate the market and control the price (kind of monopoly). It marks up its costs to achieve high profit margins (cost-pricing). Stage II: Cost Management. Stage II occurs when changes in technology, competition and customers put downward pressure on a company’s profit margins and market share. The company seeks refusing cost management through cost cutting management through cost cutting, downsizing, restructuring, and Reengineering in response to these changes. Markets now are highly competitive. In this stage the firm most likely to contemplate the nature of its production methods and cost behavior and assess the current level of competition. But continual focus on cost had its limits in the ability of increasing profits. Firm must go to stage III. Stage III: Revenue Management. Because of the limits to the growth in profits, company tries to shift its focus from cost management to revenue management. Firms in stage III focus on narrowing product lines to those offering the greatest revenue potential revenue potential The focus is on “topline growth” (which means the increase in gross sales or revenues).

Cost plus
Definition
In the cost-plus pricing model, the purchaser agrees to pay the production price of the good plus a fixed percentage to the seller for profit. This is often referred to as adding a markup, which is a percentage of the production costs, with the degree of markup determined by the level of anticipated sales.

‘the good old days’
The stage I can be called ‘the good old days’ for companies such as IBM, KODAK, Sears and any number of other solid, blue-chip companies whose dominance of the market allowed them to achieve high profit margins by simply marking up their costs to provide them with a suitable level of profit, just companies need the sale price without any competition. There are many government actions which might improve our economic situation, such as enforcing the Sherman Antitrust Act, raising taxes on the rich, doing a much better job of regulating industries and financial institutions, perhaps enacting tariffs on imports, and building an industrial base. All of these steps represent a return to the way our economy was during the period of sustained economic growth which occurred in the U.S. during approximately the three decades lasting from the 1950s to the 1970s, the “good old days” in the minds of many.

Granted, such reforms are proving difficult to enact at this time, with any reform at all meeting stiff conservative resistance, as conservative politicians seem hell-bent to make the rich even richer, the poor even poorer, and position themselves squarely among the few who are rich. Even some Democrats appear to have sold their souls to corporatism and its money.

We find ourselves left with the following factions: The conservatives, who are staunch supporters of the rich, whether they admit it or not; The supporters of conventional economic reform who represent the middle road, and who appear to believe that taking the steps mentioned above — enforcing the Sherman Antitrust Act, raising taxes on the rich (or at least allowing the Bush tax cuts to expire on the highest income brackets), re-regulating big business and financial institutions, maybe enacting tariffs on imports and creating more manufacturing — will create a permanent, strong middle class and make everything economically well in America again; And the progressives who perceive the reality of our situation calls for more than a return to the economic policies of “the good old days,” but rather, requires a fundamental shift in our economy which will allow us to prevent corporate dominance in the future. In this post, I plan to explain why the progressive position is the correct one. Advantages

The cost-plus pricing model is simple and straightforward, using the easily available internal information of financial and accounting records. It does not require examining the market or considering competition or other factors that impact pricing. It also allows companies to easily defend their prices based on cost, according to ReferenceforBusiness.com. Disadvantages

A disadvantage of the cost-plus model is the difficulty in determining the cost of a unit before its price, since costs may vary depending on volume. Although the cost-price model is an age-old pricing model, many business analysts contend that it is not appropriate for modern marketing conditions, according to ReferenceforBusiness.com. Cost-plus pricing often leads to high prices in weak markets and low prices in strong markets, which is the opposite result of strategic pricing that takes into account market conditions.

Cost plus Cost management
Changing Economics
After the change in technology, competition, and customers put pressure on their profit margins as well as market shares and forced them into stage II, where they sought refuge through cost cutting, downsizing, restructuring, and reengineering. In the United States, this began to occur in the 1980s and continued on to the early 1990s, when consultants such as Michael Hammer touted the benefits of ‘reengineering’ as a means of dealing with these changes.

Cost Management
Definition – What does Cost Management mean?
Cost management is the process of effectively planning and controlling the costs involved in a business. It is considered one of the more challenging tasks in business management. Generally, the costs or the expenses in a business are recorded by a team of experts using expense forms.

The process involves various activities such as collecting, analyzing, evaluating and reporting cost statistics for budgeting. By implementing an effective cost management system, a company’s overall budgeting can be brought under control. Cost management include basically four types of norm, these are given as follows

1. Cost cutting
Cost cutting is the process used by companies to reduce their costs and increase their profits. Depending on a company’s services or Product, the strategies can vary. Every decision in the product development process affects cost. Companies typically launch a new product without focusing too much on cost. Cost becomes more important when competition increases and price becomes a differentiator in the market. Main cost cutting strategies

Supplier consolidation
Component consolidation
Re-source to low cost countries
Request For Quotations (RFQ)
Supplier cost breakdown analysis
Function analysis / Value analysis / Value engineering
Design For Manufacture / Design For Assembly
Reverse costing
Cost driver analysis
Product benchmarking
Design to cost
Design workshops with suppliers
Competitor benchmarking
Three key factors to a successful cost cutting strategy
The design and implementation of a comprehensive cost reduction strategy should focus on three key deliverables:
1. Reducing overall operating costs
2. Improving the management of utility contracts and relationships
3. Reducing the waste generally across all departments within a business. Five step cost reduction process
A good cost reduction company will deal directly with the client, the supplier and the client’s supplier. Please click here for more information about this. Over time Smith Bellary have developed a five step process. Although this is not always a linear process, this is at the heart of the service. The process:

1. In-depth audit of current expenditure
2. Data analysis and market analysis/tendering
3. Presentation of report, detailing the findings and recommendations
4. Implementation of all agreed recommendations
5. On-going monitoring, query management and implementation of improved administrative procedures

2. Restructuring
Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons for restructuring include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring. Executives involved in restructuring often hire financial and legal advisors to assist in the transaction details and negotiation. It may also be done by a new CEO hired specifically to make the difficult and controversial decisions required to save or reposition the company.

It generally involves financing debt, selling portions of the company to investors, and reorganizing or reducing operations. The basic nature of restructuring is a zero-sum game. Strategic restructuring reduces financial losses, simultaneously reducing tensions between debt and equity holders to facilitate a prompt resolution of a distressed situation. Corporate debt restructuring is the reorganization of companies’ outstanding liabilities. It is generally a mechanism used by companies which are facing difficulties in repaying their debts. In the process of restructuring, the credit obligations are spread out over longer duration with smaller payments. This allows company’s ability to meet debt obligations. Also, as part of process, some creditors may agree to exchange debt for some portion of equity. It is based on the principle that restructuring facilities available to companies in a timely and transparent matter goes a long way in ensuring their viability which is sometimes threatened by internal and external factors. This process tries to resolve the difficulties faced by the corporate sector and enables them to become viable again. Steps:

Ensure the company has enough liquidity to operate during implementation of a complete restructuring Produce accurate working capital forecasts
Provide open and clear lines of communication with creditors who mostly control the company’s ability to raise financing Update detailed business plan and considerations
3. Downsizing
Downsizing is defined as the “conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness”. Since the 1980s, downsizing has become increasingly common. Indeed, recent research on downsizing in the U.S. UK, and Japan suggests that downsizing is being regarded by management as one of the preferred routes to turning around declining organizations, cutting costs, and improving organizational performance, most often as a cost-cutting measure.

4. Reengineering
Re-engineering is a business management strategy, originally pioneered in the early 1990s, focusing on the analysis and design of workflows and processes within an organization. BPR aimed to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors. In the mid-1990s, as many as 60% of the Fortune 500 companies claimed to either have initiated reengineering efforts, or to have plans to do so. BPR seeks to help companies radically restructure their organizations by focusing on the ground-up design of their business processes. According to Davenport (1990) a business process is a set of logically related tasks performed to achieve a defined business outcome. Re-engineering emphasized a holistic focus on business objectives and how processes related to them, encouraging full-scale recreation of processes rather than iterative optimization of sub processes. Business process re-engineering is also known as business process redesign, business transformation, or business process change management

Revenue management
Revenue Management is the application of disciplined analytics that predict consumer behavior at the micro-market level and optimize product availability and price to maximize revenue growth. The primary aim of Revenue Management is selling the right product to the right customer at the right time for the right price and with the right pack. The essence of this discipline is in understanding customers’ perception of product value and accurately aligning product prices, placement and availability with each customer segment. ‘Top line growth’ is an important concept in revenue management. Here discuss about it.

‘top line growth’

The top line refers to a company’s gross sales or revenues. Therefore, when people comment on a company’s “top-line growth”, they are making reference to an increase in gross sales or revenues.

For example, a company would be experiencing top-line growth if a new advertising campaign caused a 15% increase in sales for its widgets, which resulted in an increase of $2 million to the revenue. The Double-Win: Six Factors For Achieving Sustained Growth in the Top-line and Profitability Achieving and then sustaining top-line growth requires sound strategy and a lot of hard work. Quarter-over-quarter revenue growth is strong evidence of an organization with a well-conceived strategy that has achieved operational excellence in areas like new customer acquisition, existing customer retention and innovation in product / service value creation. But what about achieving sustained profitability when growing the top line? That can be more challenging. This article explores six important factors needed for positioning your organization for the double-win of sustained growth and profitability.

Discussion about GP based on ‘the four stages model’
History of Grameenphone
Grameenphone is one of the largest private sector investments in the country with an accumulated investment of BDT 5200 core up to December 2005. Grameenphone is also one the largest taxpayers in the country, having contributed nearly BDT 5000 core in direct and indirect taxes to the Government Exchequer over the years. Of this amount, BDT 1670 core was paid in 2005 alone. GP was also the first operator to introduce the pre-paid service in September 1999. It established the first 24-hour Call Center, introduced value-added services such as VMS, SMS, fax and data transmission services, international roaming service, WAP, SMS-based push-pull services, EDGE, personal ring back tone and many other products and services. Grameenphone nearly doubled its subscriber base during the initial years while the growth was much faster during the later years.

It ended the inaugural year with 18,000 customers, 30,000 by the end of 1998, 60,000 in 1999, 193,000 in 2000, 471,000 in 2001, 775,000 in 2002, 1.16 million in 2003, 2.4 million in 2004 and it ended 2005 with 5.5 million customers. From the very beginning, Grameenphone placed emphasis on providing good after-sales services. In recent years, the focus has been to provide after-sales within a short distance from where the customers live. There are now more than 600 GP Service Desks across the country covering nearly all upazilas of 61 districts. In addition, there are nine GP Customer Centers in all the divisional cities and they remain open from 8am-8pm every day including all holidays.

GP has generated direct and indirect employment for a large number of people over the years. The company presently has more than 3,000 full, part-time and contractual employees. Another 70,000 people are directly dependent on Grameenphone for their livelihood, working for the GP dealers, retailers, scratch card outlets, suppliers, vendors, contractors and others. In addition, the Village Phone Program, also started in 1997, provides a good income-earning opportunity to more than 200,000 mostly women Village Phone operators living in rural areas. The Village Phone Program is a unique initiative to provide universal access to telecommunications service in remote, rural areas. Administered by Grameen Telecom Corporation, it enables rural people who normally cannot afford to own a telephone to avail the service while providing the VP operators an opportunity to earn a living.

The Village Phone initiative was given the “GSM in the Community” award at the global GSM Congress held in Cannes, France in February 2000. Grameenphone was also adjudged the Best Joint Venture Enterprise of the Year at the Bangladesh Business Awards in 2002. Grameenphone considers its employees to be one of its most important assets. GP has an extensive employee benefit scheme in place including Gratuity, Provident Fund, Group Insurance, Family Health Insurance, Transportation Facility, Day Care Centre, Children’s Education Support, and Higher Education Support for employees, in-house medical support and other initiatives.

THE SHAREHOLDERS

The shareholders of Grameenphone contribute their unique, in-depth Experience in both telecommunications and development. The international shareholder brings technological and business management expertise while the local shareholder provides a presence throughout Bangladesh and a deep understanding of its economy. Both are dedicated to Bangladesh and its struggle for economic progress and have a deep commitment to Grameenphone and its mission to provide affordable telephony to the entire population of Bangladesh. In modern economy markets are more competitive, so there need more liquidity, which GP done very successfully by their shareholders. By that GP expands their market, improve their products, modernizing the image of the products.

TELENOR MOBILE COMMUNICATIONS

Telenor AS is the leading Telecommunications Company of Norway listed in both the Oslo and NASDAQ Stock Exchanges. It owns 62% shares of Grameenphone Ltd. Telenor, a 150 year-old organization, has played a pioneering role in thedevelopment of cellular communications. Manual mobile telephony services were introduced in Norway in 1966, as a forerunner to the automatic NMT system, which appeared in 1981. Its digital successor, GSM, was introduced in 1993, and third generation mobile network, UMTS, was launched for commercial use in 2004.

Telenor’s strong international expansion in recent years has been based onleading-edge expertise, acquired in the Norwegian and Nordic markets, which are among the most highly developed technology markets in the world. It hassubstantial international operations in mobile telephony, satellite operations and pay Television services. In addition to Norway and Bangladesh, Telenor owns mobile telephony companies in Sweden, Denmark, Hungary, Russia, Ukraine, Montenegro, Thailand, Malaysia, Pakistan and Serbia with more than 123 million mobile subscriptions worldwide as of June 2007. Telenor uses the expertise it has gained in its home and international markets for the development of emerging markets like Bangladesh.

GRAMEEN TELECOM
Grameen Telecom, which owns 38% of the shares of Grameenphone, is a not-for-profit company and works in close collaboration with Grameen Bank, winner of the Noble Peace Prize in 2006 along with its founder Professor Muhammad Yunus. The internationally reputed bank for the poor, has the most extensive rural banking network and expertise in microfinance. It understands the economic needs of the rural population, in particular the women from the poorest households. Grameen Telecom, with the help of Grameen Bank, administers the Village Phone Program, through which Grameenphone provides its services to the fast growing rural customers. Grameen Telecom trains the operators, supplies them with handsets and handles all service-related issues. Grameen Bank currently has 2399 branches, providing services in 76,848 villages, covering more than 91 percent of the total villages in Bangladesh. As of March 2007, the bank had 7.06 million borrowers, 97 percent of whom were women. Grameen Telecom’s objectives are to provide easy access to GSM cellular services in rural Bangladesh and creating new opportunities for income generation through self-employment by providing villagers with access to modern information and communication based technologies.

Corporate Governance
In the fast-paced world of telecommunications, vibrant and dynamic Corporate Governance practices are an essential ingredient to success. Grameenphone believes in the continued improvement of corporate governance. This in turn has led the Company to commit considerable resources and implement internationally accepted Corporate Standards in its day-to-day operations. Being a public limited company, the Board of Directors of Grameenphone have a pivotal role to play in meeting all stakeholders’ interests. The Board of Directors and the Management Team of Grameenphone are committed to maintaining effective Corporate Governance through a culture of accountability, transparency, well-understood policies and procedures. The Board of Directors and the Management Team also persevere to maintain compliance of all laws of Bangladesh and all internally documented regulations, policies and procedures. Grameenphone is a truly transparent company that operates at the highest levels of integrity and accountability on a global standard.

Corporate Responsibility
“Even a journey of a thousand miles begins with a single step…” – Chinese proverb At Grameenphone, we live by the statement “Development is a journey, not a destination.” Our work is not just about ensuring connectivity; it is about connecting with people and building relationships, based on trust, with our subscribers, business partners, employees, shareholders, as well as the wider community. We have always believed that good development is good business. While we maintain our business focus, taking the nation forward remains our top priority. Thus our relationship with Bangladesh is built on a partnership which strives to achieve common economic and social goals. Corporate social responsibility, as we see it, is a ‘complementary’ combination of ethical and responsible corporate behavior, as well as a commitment towards generating greater good for the society by addressing the development needs of the GP’s norms

GP’s Brand
The right and contemporary use of technology is the key to the progress of a nation. Keeping this in mind, Grameenphone always brings the future proof technology in order to facilitate your progress. The possibilities in this new world are immense and someone as bright as you should not be behind in anyway. At the end of the day, all the individual progresses accumulate to the progress of the beloved motherland. Grameenphone promises you to bring the best of communication technologies so that you can Go Beyond. Gp’s Mission:

Leading the industry and exceed customer expectations by providing the best wireless services, making life and business easier

GP’s Vision:
We exist to help our customers get the full benefit of communications services in their daily lives. We want to make it easy for customers to get what they want, when they want it. We’re here to help. GP’s Values:

Make It Easy
Keep Promises
Be Inspiring
Be Respectful

Innovative mobile based solutions
Grameenphone has been a pioneer in bringing innovative mobile-based solutions to Bangladesh. Notable among these is the Healthline, a 24 hour medical call centre manned by licensed physicians. Other innovations include Studyline, a call centre-based service providing education related information, Mobicash, for electronic purchase of train tickets, Billpay, for paying bills through mobile phones and over 500 community information centres across Bangladesh. These centres bring affordable Internet access and other information based services to people in rural areas. Ananta Jalil – new brand ambassador of Grameenphone

Popular actor Ananta Jalil has been already in the centre of discussion for his leading role in films after films. But this time, Jalil will be seen as a model in a TV commercial (TVC) of Grameenphone. Ananta Jalil is the new brand ambassador of Grameenphone and he is working for a new TVC of this telecommunications company on emergency balance transfer for its pre-paid customers. The shooting of this new TVC started from August 23 at the headquarter of the company named GP House and Mejbaur Rahman Sumon is the producer. The TVC is set in the backdrop of 007 James Bond action thrillers and includes two dialogues of Ananta Jalil – “Ananta’s job is to make possible out of impossible” and “Nothing is impossible for Ananta.”

Ananta Jalil said about working as a brand ambassador of Grameenphone, “I am really very happy and felt honoured at the opportunity of becoming a brand ambassador of Grameenphone”. Ananta acted new film ‘Nishartho Bhalobasha’ released during last Eid and the film was highly admired by the audience. Ananta with his wife Borsha went to Pabna for the promotion of their new film recently. A renowned ambassador is a good symptom for any kind of business organization, which give pace a company for better future and better business, a ambassador can popular a company among mass population. It is a good equipped for expansion of a market.

Ownership structure of Grameen Phone
The shareholders of Grameenphone contribute their unique, in-depth experience in both telecommunications and development.It is a joint venture enterprise between Telenor (55.8%), the largest telecommunications service provider in Norway with mobile phone operations in 12 other countries, and Grameen Telecom Corporation (34.2% ), a non-profit organization of Bangladesh. The other 10% shares belong to general retail and institutional investors.

The technological know-how and managerial expertise of Telenor has been instrumental in setting up such an international standard mobile phone operation in Bangladesh. Being one of the pioneers in developing the GSM service in Europe, Telenor has also helped to transfer this knowledge to the local employees over the years The international shareholder brings technological and business management expertise while the local shareholder provides a presence throughout Bangladesh and a deep understanding of its economy. Both are dedicated to Bangladesh and its struggle for economic progress and have a deep commitment to Grameenphone and its mission to provide affordable telephony to the entire population of Bangladesh

Mercantile Bank Mobile Banking Services “MYCASH” for Grameenphone Customers

This concept is related to revenue management because there GP try to expansion their market. In this schedule for customer of GP Mercantile Bank provide Mobile Banking Services ”MYCASH” to its customers via Grameenphone’s MobiCash distribution network. M. Ehsanul Haque, Managing Director and CEO, M.A. Yousuf Khan, Deputy Managing Director, and other senior management of Mercantile Bank Limited along with Vivek Sood, Chief Executive Officer, Mahmud Hossain, Chief Mercantile Bank Limited (MBL) formally signed an agreement with Grameenphone Ltd. recently to Corporate Affairs Officer, Md. Mainur Rahman Bhuiyan, Chief Financial Officer (Act.), Md. Delwar Hossain Azad, Head of Financial Services and other senior management team members of Grameenphone were present at the agreement signing ceremony. This arrangement enables MBL to offer their mobile financial services ”MYCASH” to GP customers who can avail the services directly from their handsets and from a fully managed network of GP MobiCash agents who are ready to serve customers of multiple bank partners and customers of any mobile operator in Bangladesh.

Awards and recognition
“GSM in the Community” Award by GSMA in 2000
“Commonwealth Innovation Award” in 2003
“Best Use of Mobile for Social & Economic Development” category in 3GSMA Global Mobile Award, 2007 “Best Brand Award” by Brand Forum in 2007
First “Telecom Asia Awards” 2008 “Asian Telecom Innovation of the year”. “3GSMA Global Mobile Award”, 2008 in the category of “Best Use of mobile for social and economic development” Grameenphone and Huawei for “Building a Greener Mobile Network” “Best Brand Communication for 2009

Best Employeer 2010 by BDJOBs
mBillionth award South Asia, 2013 for the SMS based solution to ensure safe drinking water in partnership with HYSAWA Grameenphone crosses 37.2 million active subscribers  Grameenphone Ltd. has crossed the 37.2 million active subscriber mark last week, which indicated resurgence in subscriber growth for the Company. Earlier in October this year the Company had announced 35 million subscribers with the acquisition of nearly a million new subscriptions in the third quarter of 2013, driven primarily by a startup price campaign, on the occasion of Eid festival during and after the Holy month of Ramadan. This new additional million subscribers follows on the re-introduction of the subsidized BDT 150 start-up price, in November 2013.

Commenting on the resurgence and latest growth, Grameenphone CEO, said that he was happy to see such a milestone closing for Grameenphone in 2013 with a subscriber base of 37.2 million. “As a company with now over 37.2 million subscriptions we are no doubt the preferred operator in the market,” he said, “but this new addition of 2 more million subscribers clearly demonstrates the stranglehold to growth of tele-penetration that the BDT 800 SIM tax has on the country because of the growth we see when the SIM tax is removed from the connection cost.” Revenue growth gives Grameenphone a new height

Revenue growth gives Grameen phone huge advantage to full recovery from the impact of changing economics. This norm merge with revenue plus. Grameenphone Ltd. reported BDT 5,515 crore revenues for the first nine months of 2010 with 14% increase from the same period of 2009. Total revenue for the third quarter of 2010 was BDT 1,934 crores, up by 17% from the third quarter of 2009. The growth in revenue was mainly in voice as well as interconnection revenues due to subscription growth. Data revenue also has contributed to this consistent revenue growth for the first nine months of 2010, increased by 68% from the corresponding period of 2009. “GP’s strong performance in revenue and subscription growth has been consistent over the first nine months of 2010,” said Oddvar Hesjedal, CEO of Grameenphone Ltd.” He added, “We made it easy for our customers to adopt with the best of technology through our world class cellular solutions and services.”

The company has added 54 lakh new subscriptions during the year. At the end of September 2010, Grameenphone’s total subscription base was 2 crore 87 lakhs, holding on to the market leadership by serving 44% of the mobile market. Net profit after taxes for the first nine months of 2010 was BDT 774 crores with 14.0% margin compared to BDT 652 crores with 13.4% margin of the same period of last year. The increase was driven by revenue growth, partially offset by higher selling and distribution expenses, mainly against BDT 525 crores of SIM tax subsidies. This has also pushed the EBITDA margins down to 50% for the first nine months of 2010 compared to 59% of the same period of 2009.

As a result of the above, Earnings per share (EPS) for the first nine months of 2010 stood at BDT 5.73 compared to BDT 5.37 for the corresponding period of last year. Grameenphone CEO emphasized on the fact that SIM tax clearly has been the hindering factor of the digitalization process of Bangladesh through the mobile industry, also been resisting the potential of industry profitability. “However”, he added, “GP’s strong revenue performance shows that subsidized acquisitions during the year have started to pay back through revenue generation.” Grameenphone invested BDT 446 crores during the first nine months in 2010 mainly for network quality and data capacity enhancement.

In addition, Grameenphone contributed BDT 2,800 crores to the Government during the first nine months of 2010 which represents about 50% of Grameenphone’s total revenue for this period. Notably, despite having lower corporate tax rate, Grameenphone has paid BDT 697 crores in corporate taxes during the first nine months of this year, which was BDT 180 crores more compared to same period of last year. Grameenphone Ltd. declared interim dividend in cash at the rate of 35% of the paid up capital (BDT 3.50 per share of BDT 10 each) for the year 2010 based on the half yearly performance of the Company for the same year. The Shareholders as of the record date of 2nd November 2010 will be entitled for this dividend, which will be distributed within the timeframe stipulated by the regulators. In June 2010, Grameenphone distributed 60% final dividend in cash for the year 2009. It is to be noted that the Company published its dividend policy earlier this year prior to its 13th AGM. Grameenphone’s head office has been shifted to its newly built headquarter “GP House” in Bashundhara, Dhaka. GP House is a state-of-the-art building with energy efficient modern amenities and eco-friendly atmosphere. The GP family has warmly embraced the new lifestyle at work with ‘paperless’ and ‘open office’ concept.

Conclusion

In conclusion to this study it is clear there is a huge impact of ‘the four stages model’ in our economic system. However it is emphasized that it is a successful method for modern economy. To achieve such objectives more than one policy intervention may be required.