3Q.2011 Bangladesh Mobile Operator ForecastBangladesh to have 101 million mobile subscriber connections in 2015 with Banglalink taking 28% market share

October 2011

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© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

INDUSTRY AVERAGE SUBSCRIBER GROWTH IN THE BANGLADESHI WIRELESS MARKET REMAINS STRONG AT ABOUT 28% IN THE LATEST QUARTER

The operator-wide average subscriber growth (YoY) was 28.3% in 2Q.2011, down from 35.7% in 2Q.2010.

Banglalink (Orascom Telecom) saw its subscriber growth (YoY) decrease from 45.7% in 2Q.2010 to 25.5% in 2Q.2011.

Robi Axiata’s subscriber growth (YoY) was 33.4% in 2Q.2011, down from 66.5% in 2Q.2010.

Grameenphone’s subscriber growth rose slightly from 25.0% in 2Q.2010 to 27.9% in 2Q.2011.

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Banglalink/Sheba (Orascom Telecom Holding S.A.E)Grameenphone Limited Robi Axiata Limited (Telekom Malaysia)Industry Total

Chart 1: Subscriber Growth (4Q08 – 2Q11), %

Strong subscriber growth continues in Bangladesh28.3% industry average subscriber growth in 2Q.2011

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© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

INDUSTRY AVERAGE ARPU IN BANGLADESH CONTINUES TO DECLINE

The industry average monthly ARPU was US$ 2.65 in 2Q.2011, down -13.1% YoY.

Banglalink, Grameenphone, and RobiAxiata continue to lower their ARPUs. Grameenphone’s monthly ARPU declined by -10.4% (YoY) to reach US$ 3.10in 2Q.2011.

Banglalink’s monthly ARPU was US$ 2.07 in 2Q.2011, down -1.6% YoY. Its ARPU level is the lowest among the Top 3 operators.

Chart 2: ARPU Growth (4Q08 – 2Q11), %

ARPU growth in Bangladesh remains negative-13.1% industry average ARPU growth in 2Q.2011

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Banglalink/Sheba (Orascom Telecom Holding S.A.E)Grameenphone Limited Robi Axiata Limited (Telekom Malaysia)Industry Total

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© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

The operator-wide average Minute of Use (MOU) per subscriber was 241 minutes per month in 2Q.2011, down -12.4% YoY.

MOU per subscriber at Banglalink and Grameenphone was 164 minutes and 270 minutes respectively in 2Q.2011.

MOU/Sub growth is negative at both Banglalink and Grameenphone. Banglalink’s MOU/Sub growth declined from -1.6% in 2Q.2010 to -34.1% in 2Q.2011.

Grameenphone’s MOU/Sub growth was -7.2% in 2Q.2011 (up from -3.3% in 2Q.2010).

Chart 3: MOU/Sub Growth (4Q08 – 2Q11), %

Minutes of Use per Subscriber is decreasingIndustry average MOU/Sub is approximately 240 minutes per month

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Banglalink/Sheba (Orascom Telecom Holding S.A.E)Grameenphone Limited Industry Total

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© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

+12.3% INDUSTRY-AVERAGE EBITDA GROWTH IN 2Q.2011

The industry average EBITDA growth rate (YoY) in 2Q.2011 was 12.3%, up from -4.4% in 2Q.2010.

EBITDA growth rate at Banglalink decreased from 23.4% in 2Q.2010 to -25.9% in 2Q.2011.

EBITDA growth rate at Robi Axiatawas -7.7% in 2Q.2011 (down from 0.2% in 2Q.2010).

On the other hand, EBITDA growth rate (YoY) at Grameenphone jumped from -17.3% in 2Q.2010 to 42.0% in 2Q.2011.

Chart 4: EBITDA Growth (4Q08 – 2Q11), %

Strong EBITDA growth at Banglalink and Robi AxiataIndustry average EBITDA growth was approximately 12% in 2Q.2011

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Banglalink/Sheba (Orascom Telecom Holding S.A.E)Grameenphone Limited Robi Axiata Limited (Telekom Malaysia)Industry Tatal

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© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

We forecast that the number of total wireless subscriber connections in Bangladesh will increase from 73 million in the end of 2010 to 101.6 million in the end of 2015.

Given the latest quarter numbers, our model predicts that Banglalink will have approximately 28.3 million mobile subscriber connections in 2015.

We expect that Grameenphone will have approximately 37.2 million wireless subscribers in 2015 (36.7% market share)

In our view, Robi Axiata will have 22.1 million mobile subscribers in Bangladesh with a 21.8% market share in 2015.

Chart 5: Subscribers by operator (CY09 – CY15F)

So what is IEMR’s Forecast? Total mobile subscriber connections in Bangladesh to reach 101 million in 2015

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Banglalink/Sheba (Orascom Telecom Holding S.A.E)

Grameenphone Limited Robi Axiata Limited (Telekom Malaysia)

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© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

WE EXPECT THE OPERATOR-WIDE AVERAGE ARPU LEVEL TO DECLINE OVER THE NEXT TWO YEARS

Our forecasting model predicts that the industry average ARPU will continue to decline over the forecast period, 2012-2013.

According to our model, the industry average ARPU will be US$ 2.44 per month in 2013.

We expect that Banglalink’s ARPU level will continue to be higher than those of Robi Axiata and Grameenphone over the next two years.

Chart 6: Average Revenue per User (ARPU) per month (CY09 – CY13F), USD

So what is IEMR’s Forecast?ARPU levels in Bangladesh to decrease

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Banglalink/Sheba (Orascom Telecom Holding S.A.E)Grameenphone Limited Robi Axiata Limited (Telekom Malaysia)Average

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© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

WE EXPECT OPERATORS’ EBITDA MARGINS TO DECLINE OVER THE FORECAST PERIOD

Our model is predicting that, from 2011 to 2013, Grameenphone’sEBITDA margins will remain higher than those of Banglalink and RobiAxiata.

We forecast that Grameenphone'sEBITDA margin (calculated as EBITDA/service revenue) will be 47.2% in 2013.

We expect that Robi Axiata’sEBITDA margin will be at about 15.4% in 2013.

Chart 7: EBITDA margins (CY09 – CY13F), %

So what is IEMR’s Forecast? Grameenphone to enjoy higher profitability than Banglalink and Robi Axiata

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Banglalink/Sheba (Orascom Telecom Holding S.A.E)Grameenphone Limited Robi Axiata Limited (Telekom Malaysia)Average

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