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‘Budgetary measures to hinder investment in telecom sector’

  • Published at 10:21 am August 22nd, 2019
Taimur Rahman
Taimur Rahman, chief corporate and regulatory affairs officer of Banglalink Rajib Dhar/Dhaka Tribune

'Complex regulatory regime is hindering new investment,   growth and sustainability of the country’s telecom industry, which is paving ways for digital Bangladesh,' Taimur Rahman, chief corporate and regulatory affairs officer of Banglalink told Dhaka Tribune’s Ibrahim Hossain Ovi in an interview. He also vows that policies must be made investment and customer friendly”

How will the recent budget affect the telecom industry in the long run? 

It is disappointing that key industry issues were not addressed properly in the current budget. Instead of taking our financial challenges into consideration, the authorities decided to double the supplementary duty on all the services provided through mobile phones from 5% to 10%.

Moreover, the SIM tax has doubled and the minimum tax on a mobile operator’s turnover has increased from 0.75% to 2%. 

The import duty on smartphones has increased as well. These new impositions may seriously affect the growth of the industry, as they will surely result in costlier telecom services at the customers’ end.  

Can the proper implementation of SMP guidelines play a significant role in ensuring a level-playing field in the industry?

We appreciate the government’s initiative to introduce the much-needed significant market power (SMP) guidelines. Proper implementation of the guidelines has become necessary, as the existing monopoly in the telecom industry continues to hinder its potential growth.

It is really a matter of concern for the industry that, currently, only one mobile operator is making profit. Despite running their operations in the country for a long time, other operators are still incurring losses due to the heavy tax burden and non-rational pricing of the dominant operator. 

Unless the authorities ensure a level-playing field for us through the proper implementation of the SMP guidelines, it will be difficult for us to sustain in the market.    

BTRC has published the tower sharing guidelines. Is the guideline hampering network expansion?

As the telecom operators and tower company licensees could not come to an agreement on a number of issues related to service level agreement (SLA), BTRC decided to intervene and prepared an agreement for the two parties. 

However, the agreement consisted of SLAs and dictated the commercial clauses between the telecom operators and tower company licensees, which are not acceptable at all. 

Currently, BTRC is in the process of preparing revised guidelines that are likely to be published before August 31, 2019. We expect that the issue we have raised will be addressed properly in the final guidelines. 

The Government is planning to launch 5G by 2020. Are the telcos ready and what are the challenges? 

We are always in favor of introducing the latest technologies that can significantly contribute to the making of a truly digital Bangladesh. But before launching a highly advanced technology like 5G, we need to take a number of key factors into consideration. 

The overall success of our endeavor for 5G or 4G primarily depends on its mass adoption. It has been more than a year since 4G was launched, but unfortunately, the number of 4G-enabled handset users is still very low in the country. 

If we face a similar situation after launching 5G, it will be financially challenging for us. 

A few more regulatory changes and policy revisions are necessary as well, to make 5G a viable business-case for us.

What are the next steps, Banglalink wants to take to provide better services to its clients?

Since its inception, Banglalink has always been known for empowering the people of Bangladesh. 

Now, our goal is to ensure people’s access to the global digital highway through providing innovative applications and enabling them to be digitally literate. 

Talented youngsters from educational institutes are selected and rewarded through another program named Ennovators. A number of digital services such as Game On, Vibe, Self-care app and Daktar Bhai were introduced to unlock state-of-the-art digital facilities for our customers. We launched a digital literacy program in collaboration with GSMA as well. 

Tell us about the present situation of telcos? 

The telecom regulatory authorities have taken some praiseworthy initiatives lately, such as conducting the spectrum auction with technology neutrality, initiation of SMP guidelines, introduction of electronic SAF etc. 

However, in order to make the telecom regulatory regime more effective, it is necessary to focus on a few important issues, such as implementing the SMP guidelines, preparing acceptable tower sharing regime and reducing the spectrum price.

How can the operator play a role in mitigating illegal VOIP? 

It needs to be mentioned that illegal voice over internet protocol (VoIP), bypassing the international gateways (IGWs), is also a major concern for us, as we are losing revenue. We could get more revenue if international calls came through the legal revenue sharing framework set by BTRC. 

Moreover, the operators are implementing multiple methods to curb illegal VoIP activities through deactivating SIMs that are considered to be used for illegal purposes, and dictated both by BTRC and self-regulations system. On top of having less revenues, we also incur loss on the acquisition costs for deactivating such SIMs. 

There is no reason for operators to promote such illegal activities. But the BTRC is considering an imposition of fines on operators for this purpose. One big reason for this kind of illegal activity is that the international call termination rate fixed by the IGWs is still high, which is giving some criminals an opportunity to continue this fraudulent activity. 

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