Tiny business, shiny prospect

Md Rafique, a mobile credit retailer, was happy as Dhaka University reopened in January after a winter vacation. He pinned hopes on students for brisk sales on the campus.

The students are a key driver of mobile credit sales at his stall. Rafique's stall is one of the millions that are widely known as 'cell phone balance refill spots' or 'scratch card retail outlets' or 'points of sales'.

The emergence of this business was propelled by expansion of the country's fast growing telecom sector. More mobile operators bring in more retail outlets. Grameenphone set off the trend with Flexiload on April 28, 2005. Later, other operators followed suit.

Teletalk was the latest to enter the scene with TeleCharge, an electronic recharge system.

At a retail outlet, a person can add additional credit to his mobile. The retailer does so with a scratch card or by sending credit from his cell account to the customer's. A retailer gets small commission, ranging between 2.75 percent and 3.15 percent from his distributor through dedicated sales representatives. That is not all.

He will have to press all 11 digits of a mobile number correctly to transfer credit each time. If he makes a mistake, it will be a costly one.

But sellers are sure about their profits. "Whatever I invest today will never go to waste," said Anwar Hossain Shiplu, a retail outlet owner in Mohammadpur.

"I profited more than Tk 11,000 last month by investing Tk 15,000 daily."

More than 25 lakh people are involved in this business in Bangladesh. Of the six operators, GP alone has 1.2 lakh points of sales around the country, according to a recent report published on the website of Telenor that owns GP.

GP has 1.04 lakh top-up retailers and 14,928 telco retailers countrywide. Some retailers run only the outlets while others take it up as part-time business.

Md Hasan, a part-time retailer on the Dhaka University campus, said: "I can hardly load Tk 2,000 a day as most students prefer to refill Tk 10 to Tk 20 at a time."

However, trade volume increases every time a operator offers new promotions and is reduced when students leave the halls during vacations. These part timers now rule the market. It is a common sight to see a man sitting on a roadside, offering to recharge credit.

All retailers depend on students, who account for a major portion of 5.24 crore mobile customers.

Badiul Alam, a retailer in front of Dhaka Commerce College at Mirpur, said his sales average Tk 5,000 a day, while it may drop to Tk 3,000 when the college remains closed.

Many retailers let people make calls at Tk 2 a minute, which was Tk 10 when the mobile operators first appeared.

"Now we earn Tk 1 for every minute of a call, which was less than Tk 0.5 earlier, when the call rate was Tk 3 or Tk 4," Alam said.

Shiplu said Eid brings him business. "I transferred credit worth Tk 48,000 on the first day of Eid and the day earlier."

"But sales from these two days do not depict the whole scenario. I can hardly maintain my household with this income."

A reduced rate of commission has cut into retailers' profit. Besides, the government imposed Tk 900 in tax on every SIM in fiscal 2005-06 and later reduced it to Tk 800.

Operators claim tax is the reason for reduced commission. GP began Flexiload with 3.5 percent commission for retailers, which is now 2.75 percent. The same is with Banglalink, Warid and AKTEL.

Teletalk and Citycell fixed the rate at 3 percent and 3.15 percent.

Bangladesh Mobile Phone Load Businessmen Association recommended raising the commission up to 10 percent.

Shiplu said there should be dedicated retailer shops and not everyone should get permission to be a retailer; or there should be separate rates of commission for part timers and regular traders.

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