On a day when 241 stocks advanced and only 102 declined, Bangladesh’s telecom sector moved in the opposite direction. The DSEX climbed 0.59% on Wednesday, recovering a portion of Monday’s 1.29% slide. Banking gained. Pharma gained. Insurance and engineering gained. Telecom dropped 0.7% — the only major sector to finish in the red.
That divergence is not a one-session anomaly. It is the surface expression of structural pressures that have been compounding for over a year, and the market data from March 25 makes the case more clearly than any earnings report could.
Grameenphone: The Blue-Chip That Cannot Catch a Bid
Grameenphone closed at BDT 248.20, down 1.15% against a market that was broadly green. The stock traded in a narrow BDT 247.70–252.00 range on volume of 119,769 shares — modest for the exchange’s largest company by market capitalisation at BDT 339,060 crore.
The number that matters most sits further back in the data. GP is now trading 24% below its 52-week high of BDT 328, reached in March 2025. A year of decline for a company that reported trailing earnings per share of BDT 26.89 and paid a 330% cash dividend for 2024. By any conventional valuation metric — the audited P/E ratio sits at 9.23 — the stock looks cheap.
Yet the market keeps marking it down. When a stock with those fundamentals cannot attract buyers during a broad recovery session, the problem is not the company. It is the operating environment surrounding it.
Robi Axiata: Flat Where Others Flew
Robi closed unchanged at BDT 30.10, technically outperforming GP but revealing its own set of concerns. Volume was heavy at 2.09 million shares — nearly 18 times GP’s turnover — but the price went nowhere. Buyers and sellers were perfectly matched, which in a rising market means the stock lacked any upward catalyst.
Robi’s unaudited P/E of 16.82 against trailing EPS of BDT 1.34 tells the valuation story: the stock is priced for growth that the current regulatory environment makes difficult to deliver. The 15% dividend for 2024 confirms profitability, but thin margins leave little room if costs rise further.
The contrast between the two operators captures the sector’s dilemma. GP has the earnings but faces regulatory targeting. Robi has the relative freedom but lacks the earnings power. Neither offered investors a reason to participate in Wednesday’s rally.
The 39% Problem — and Five More Behind It
Bangladesh imposes a combined 39% tax rate on internet services — among the highest in Asia, according to the GSMA’s 2024 report. That single figure explains more about telecom sector underperformance than any technical chart.
But taxation is only the most visible headwind. Behind it sit five more:
Spectrum uncertainty. The 700MHz auction in January 2026 resolved a two-decade dispute, but 20MHz of prime spectrum remains tied in legal proceedings. Capital allocation decisions stall when operators cannot confirm what network assets they will hold.
SMP regulation. Grameenphone operates under Significant Market Power rules that cap inter-operator call charges. The High Court stayed enforcement for three months in December 2025, but the regulatory overhang persists. Every quarter that passes without resolution is a quarter where institutional investors apply a governance discount.
Declining ARPU. Bangladesh’s average revenue per user remains among the lowest in the region. Operators are adding subscribers but extracting less value per connection — a growth pattern that pressures margins rather than expanding them.
BTRC revenue sharing. The regulator is seeking 5.5% of revenue from broadband operators, an additional cost layer that has no equivalent in most competing markets.
NEIR compliance. The National Equipment Identity Register launched in December 2025 to block unregistered handsets. The long-term goal is legitimate, but the short-term effect is market disruption and compliance costs that flow directly to operators.
Stack these six headwinds together and the question is not why telecom fell on Wednesday. The question is what would need to change for the sector to participate in the next sustained rally.
What the Divergence Signals for Portfolio Construction
Wednesday’s session was a useful stress test. When market breadth hits 70% advancing and a sector still declines, that sector is telling you something about its medium-term trajectory. The signal is not “sell telecom” — GP’s dividend yield at current prices remains among the highest on the exchange. The signal is that price appreciation requires a catalyst that the current regulatory and fiscal framework does not provide.
For income-focused investors, GP at a 9.23 audited P/E with a 330% dividend history is a legitimate holding — provided you accept that capital gains may be limited until the tax or regulatory picture shifts. For growth-oriented portfolios, the capital locked in telecom generated no return on a day when the banking sector and pharma sector both moved higher.
The broader DSEX recovery on March 25 confirmed that post-Eid buying interest exists. Telecom’s refusal to join confirmed that some sectors face headwinds no amount of market optimism can override — at least not yet.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Stock market investments carry risk. Consult a BSEC-licensed advisor before making investment decisions.