The country's telecom regulator has rejected licence application of 301 internet service providers (ISP) as there is no room for new entrant for overcrowded broadband internet providers.
More than half of these applications are from Dhaka and adjacent areas, according to a notification issued by the Bangladesh Telecommunication Regulatory Commission (BTRC).
In a circular issued recently, the BTRC said it cannot provide license to these applications as per the new ISP guidelines to avoid oversaturation in a particular area.
Secretary General of Internet Service Providers' Association of Bangladesh (ISPAB) Nazmul Karim Bhuiyan said there are 2,700 ISPs working in the country to provide internet service.
He said many countries much larger than Bangladesh have fewer number of ISP licensees.
Mr Bhuiyan said there are some thanas (or Upazilas) in the country having more than 10 ISPs who are providing internet in each area where only two internet providers would be sufficient to do the job.
However, ISPs made a demand to give licences to applicants who seek licences to provide the services to sibscribers of locations where internet services have not reached yet, such as hilly areas and remote islands.
Mr Bhuiyan also urged the BTRC to give permission to ISPs seeking the authorities' permission to provide internet services to locations where licences or permission are necessary for expanding their existing areas of coverage without applying for new licences.
Around 2,000 companies are currently listed in the ISPAB database out of around 2,700.
However, a BTRC official said the decision not to provide license is not permanent.
"It may be withdrawn anytime," he said.
The BTRC scraped linceces of 316 internet service providers (ISPs) a few months back. The licences were cancelled as the ISPs failed to respond to the queries by the telecom regulator regarding their licence conversion. The commission has directed all international internet gateway (IGW) operators not to provide bandwidth to these ISPs.
According to the Regulatory and Licensing Guideline for ISP in Bangladesh, the ISPs must renew their licences every 5 years and the licensee has to obtain an approval of tariffs before rolling out a service.
Late last year, the regulator fixed the area of work for its licensees to bring order in the internet service business.
An amendment to the ISP guidelines found that the existing internet service provider (ISP) licensed companies have Nationwide Telecommunication Transmission Network (NTTN), International Internet Gateway (IIG), International Gateway (IGW), Interconnection Exchange (ICX), submarine cable and International Terrestrial Cable (ITC) licenses.
But if the ISP licensed companies want to continue their business, they have to choose either ISP or rest of the licenses.
Under the amendment, license holders willing to continue the ISP business, have to hand over NTTN, IIG, IGW, ICX, submarine cable and ITC licenses to the BTRC. Or if they want to continue business of NTTN, IIG, IGW, ICX, submarine cable and ITC then they have to hand over IPS license.
However, this condition did not apply to government institutions under this sector.
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