Backdated telecom policy blocks umpteen economic prospects

Although very limited access created so far, people in Bangladesh are enjoying unlimited benefits of 3G (third generation) mobile technology. One step forward now in this ICT field, LTE (long-term evolution) 4G, a standard for wireless communications to facilitate handsets with ultra-fast data service and voice telephony as well, has already hit the market.
All of the six telecom operators but Citycell have already introduced the much-hyped 3G networks across the major cities, bringing around 40 per cent mobile-users under this smart phoning facility. The government also issued LTE licence to three WiMAX operators last year, considering the business environment. The operators are yet to come in operation.  
Low 3G penetration and delay in the LTE operation have raised questions as to how people accepted the 3G technology? Is the country ready to welcome the 4th-generation mobile technology? If not, what is the major challenge? Does the legislative framework proactively support the change?
The government issued 3G licences in September 2013, but the penetration remained very low: only around 5 per cent cell-phone users are receiving the much-vaunted 3G services across the country. Nearly 10 per cent customers use 3G-enabled handsets, while only 3 to 4 per cent cell-phone customers use the LET-enabled sets. Such a lukewarm response is frustrating market players.
Undoubtedly, telecom has emerged as a most vibrant industry in the country to catch up with the present world's fastest-growing economic sector. It isn't merely limited to voice-telephony services for individual communication rather it has generated a wide range of value-added services over the years. These include data service, mobile financing, m-education, m-health and some other important functions.
However, the existing 17-year-old telecom policy is barely able to support expected scales of development in the sector. In terms of subscribers, the sector has maintained around 20 per cent growth over last half a decade.
The legislative framework is unable to support latest transformation, discouraging large-scale investment in the sector. Unlocking potential for huge investment in this sector is seen as essential for wellbeing of the national economy as well as improvement of mobile telecom services.
In 1998, Bangladesh formulated its National Telecommunication Policy, keeping basic telephony like PSTN (public switched telephone network) ahead with a short-term goal of increasing the then teledensity from 0.4:100 telephones to 1telephone for every 100 persons.
The target of expansion of telephone penetration was fixed at 1,300,000 lines units, including associated inland and overseas transmission links and facilities, by the year 2000 to serve the demand and increase the teledensity.
The target has already been superseded as presently the country has over 70 per cent mobile penetration with the network coverage of 99 per cent areas across the country, maintaining average growth of 20 per cent over half a decade.
We've come a long way since then. Now, telephone has become an integral part of every-body's daily life. We are crossing the period of third-generation (3G) mobile penetration with data service emerging as a major driver of the sector.  
According to the Bangladesh Telecommunications Regulatory Commission (BTRC), till September 2014, the country's mobile connections had stood at over 118 million while the number of active internet-users had reached 42 million, adding almost 5 per cent revenue from the data services.  
The opportunities that lie dormant on the telecom market seem endless as the growing demand for mobile-telephony systems is creating a worldwide market. The multi-billion-dollar telecom industry has emerged as the most profitable and lucrative enterprise in the country, attracting foreign potential investors.
If we look at the country's telecom market, it will be clear. Out of the six mobile operators, major shares of the five telephony firms, save Teletalk Bangladesh, mainly run with foreign investment. According to the telecom operators, the investment size is now nearly Tk500 billion.   
Grameephone Limited (GP), a joint-venture enterprise of Norway-based telephony firm Telenor and local company Grameen Telecom Corporation, is dominating the sector with the subscriber base of over 50 million. Banglalink Digital Communication Limited (Banglalink), owned by Global Holding Limited of Malta, follows the kingpin with over 30 million users.
Robi Axiata Limited (Robi), a joint venture of Axiata Group Berhad of Malaysia (92 percent share) and NTT DoCoMo Inc of Japan (8 percent share), positioned third with the subscribers of nearly 25 million. Bharoti Airtel-owned-Airtel Bangladesh Limited (airtel) has nearly 8 million users, Pacific Bangladesh Telecom Limited (Citycell), owned by Singaporean company SingTel, has nearly 1.35 million subscribers and the subscribers of the state-owned Teletalk Bangladesh Limited (teletalk) are 3.76 million.
According to industry-insiders, currently investment size in the country's telecom sector is Tk 500 billion, almost 60 per cent of the money constituting foreign outlay.
Besides voice service, now the industry's major business focus is on value-added services. Analysing recent financial disclosers of the mobile operators, it is found that a significant share of their revenue had come from the value-added services like data and other mobile services.
According to Bangladesh Bank, there are presently a total of 20.77 million registered customers and 0.5 million agents for mobile banking in the country. The central bank has issued mobile-banking licence to 28 commercial banks. Of them, some 19 banks have already adopted the system of banking through phoning.
"The rapid growth of mobile-phone users and countrywide coverage of mobile operator networks made their delivery channel an important tool-of-the-trade for extending banking services to the unbanked and banked populations both, especially to expedite faster delivery of remittances across the country," the regulator commented.
Like the financial service, mobile could be a very effective tool to reach basic health-and education-related services to the doorstep of the general people as almost every citizen has direct or indirect connection with the mobile network. In fact, the government is using the mobile network in this regard.
Considering the importance of the market, telecom operators in the country now mull over making large-scale investment in these areas. However, they need strong and long-term policy support.
A sound national telecommunications policy is very urgent to develop sound telecommunications infrastructure in order to support the fastest-growing economic field and welfare of the country through providing telecommunications facilities on demand, assuring satisfactory quality of services that also ensures value to the customers.
Without updated and time-befitting policy, it is not possible to connect remaining over 38 million unconnected people with the telecom network and adopt up-to-date mobile-based latest services as the sector needs to cope with regular transformation.
The government policymakers and the regulator already acknowledged the limitations of the existing telecom policy. They also laid emphasis on upgrading the policy through incorporating some updated provisions to facilitate expansion of the market.
"The existing telecom policy needs massive change as the current 22-page telecom guideline has become obsolete," BTRC Chairman Sunil Kanti Bose said. He noted that the existing policy was formulated in tune with the land-phone services alone, but today mobile telephony has outpaced the public switched telephone network operators in the country. His regretful remarks on the policy were published in The Financial Express on May 01, 2014.  
Revising the policy, the government could attract more large-scale foreign direct investment in the country, which is a prerequisite for the sustainable economic development as envisaged. Insiders think potential investors, both foreign and local, become frustrated and feel discouraged about business here in view of such outdated telecom policy as the sector requires large-scale and long-term investment.
Upon a request from the Ministry of Posts and Telecommunications, the International Telecommunications Union (ITU) developed National Telecommunications Policy (NTP) for Bangladesh in 2012. But, to everybody's surprise, the policy has remained on paper over the years.  
However, the government is looking forward to reforming the legislative and policy framework based on some recommendations made by the policymakers and operators. The most relevant ones are:  to determine presence of market dominance and need for regulation to promote competition; introduce a market-based spectrum allocation, trading and sharing process; and review taxation policy.
Currently, Bangladesh is one of the highest-taxation-rate countries for mobile services in the world, with the operators paying in 61 per cent tax, including the 15 per cent consumers' VAT (value-added tax) of their revenue.
The Association of Mobile Telecom Operators of Bangladesh (AMTOB) pushes for forming a joint taskforce to review the existing policy in order to formulate the much-needed legislative framework. However, the government must take the opinions from the valued customers as they are those who to get affected and benefited from the policy.    

The writer is FE Staff Reporter. He can be reached at: [email protected]