Govt loses billions as BTTB shows apathy to interconnectivity
Thursday, 3 January 2008
The government has lost over Tk 67.00 billion (US$1.145 billion) in revenue as Bangladesh Telegraph and Telephone Board (BTTB) failed to properly link the private mobile phone providers with its network, bdnews24.com reports.
The figure pops up from the payment records of Grameenphone and Telekom Malaysia (TMIB) that owns AKTEL from 1997 to 2006.
Grameenphone had 12.1 million subscribers until 2006 but only 39 per cent (4.74 million) of them could access BTTB network.
The GP paid Tk 8.05 billion to BTTB for interconnection and call charges while the National Board of Revenue (NBR) received Tk 1.21 billion in VAT (value-added tax).
The state telecoms operator could have earned a further Tk 48.87 billion if all the GP's 'mobile-to-mobile' customers were connected to the BTTB network.
In addition, Tk 7.33 billion of VAT could have also been realised from the GP if it was fully connected with BTTB.
This was how the government could have altogether earned extra Tk 56.20 billion if the BTTB provided full interconnection to Grameenphone since 1997.
The impact of interconnection on the public exchequer's earnings becomes compelling if the case of TMIB is taken into consideration.
Only 20 per cent (150,000) of TMIB's 751,000 subscribers were connected to the BTTB until 2004.
It had paid the BTTB Tk 1.382 billion and the NBR Tk 207.3 million in VAT from 1997 to 2004.
TMIB got fully connected with BTTB in 2005 and it achieved 300 per cent of annual growth followed by nearly double that clientele in 2006.
The public exchequer also reaped benefits after the full TMIB-BTTB interconnection during 2005-06.
TMIB paid Tk1.31 billion to BTTB in two years (2005-06), which was close to what the company had paid (Tk 1.38 billion) during the preceding eight years (1997-2004).
It had also paid the NBR Tk 200 million in VAT in 2005-2006, which was almost similar to the preceding eight years' payment (Tk 210 million).
If the TMIB was fully connected since 1997, the government could have earned an additional Tk 10.82 billion through the BTTB and NBR until 2004.
It could have also made a further Tk 56.20 billion from Grameenphone between 1997 and 2006.
The government has altogether lost at least Tk 67.02 billion ($1.145 billion) in telecoms revenue and VAT from only these two mobile phone providers for not fully connecting them with the BTTB since they launched operations.
It is a conservative estimate as only the receivables from GP and AKTEL have been taken into account in this case study. The mobile-bound calls revenue from the BTTB's network has not been considered.
The value of unconnected millions of mobile-bound international calls also remains unaccounted for because of a lack of data.
Bangladesh receives more calls from abroad than what it sends. This is how BTTB annually earns millions of dollars from the overseas carriers.
It could have been easily increased manifold if all the mobile networks were fully linked with BTTB to terminate voluminous incoming overseas calls.
The government missed earning billions of taka from interconnection during the first decade of the telecoms reform. Its apathy has eventually contributed to the boom of bypassed international calls through illegal VoIP outfits.
The mobile industry had outsized the BTTB in 2001. International telecoms carriers immediately tapped the captive but exponentially growing mobile market that remained isolated from BTTB's international gateway.
In fact, the lack of interconnection prompted this illicit and substandard business. Yet it connects millions of mobile phone users with rest of the world.
The figure pops up from the payment records of Grameenphone and Telekom Malaysia (TMIB) that owns AKTEL from 1997 to 2006.
Grameenphone had 12.1 million subscribers until 2006 but only 39 per cent (4.74 million) of them could access BTTB network.
The GP paid Tk 8.05 billion to BTTB for interconnection and call charges while the National Board of Revenue (NBR) received Tk 1.21 billion in VAT (value-added tax).
The state telecoms operator could have earned a further Tk 48.87 billion if all the GP's 'mobile-to-mobile' customers were connected to the BTTB network.
In addition, Tk 7.33 billion of VAT could have also been realised from the GP if it was fully connected with BTTB.
This was how the government could have altogether earned extra Tk 56.20 billion if the BTTB provided full interconnection to Grameenphone since 1997.
The impact of interconnection on the public exchequer's earnings becomes compelling if the case of TMIB is taken into consideration.
Only 20 per cent (150,000) of TMIB's 751,000 subscribers were connected to the BTTB until 2004.
It had paid the BTTB Tk 1.382 billion and the NBR Tk 207.3 million in VAT from 1997 to 2004.
TMIB got fully connected with BTTB in 2005 and it achieved 300 per cent of annual growth followed by nearly double that clientele in 2006.
The public exchequer also reaped benefits after the full TMIB-BTTB interconnection during 2005-06.
TMIB paid Tk1.31 billion to BTTB in two years (2005-06), which was close to what the company had paid (Tk 1.38 billion) during the preceding eight years (1997-2004).
It had also paid the NBR Tk 200 million in VAT in 2005-2006, which was almost similar to the preceding eight years' payment (Tk 210 million).
If the TMIB was fully connected since 1997, the government could have earned an additional Tk 10.82 billion through the BTTB and NBR until 2004.
It could have also made a further Tk 56.20 billion from Grameenphone between 1997 and 2006.
The government has altogether lost at least Tk 67.02 billion ($1.145 billion) in telecoms revenue and VAT from only these two mobile phone providers for not fully connecting them with the BTTB since they launched operations.
It is a conservative estimate as only the receivables from GP and AKTEL have been taken into account in this case study. The mobile-bound calls revenue from the BTTB's network has not been considered.
The value of unconnected millions of mobile-bound international calls also remains unaccounted for because of a lack of data.
Bangladesh receives more calls from abroad than what it sends. This is how BTTB annually earns millions of dollars from the overseas carriers.
It could have been easily increased manifold if all the mobile networks were fully linked with BTTB to terminate voluminous incoming overseas calls.
The government missed earning billions of taka from interconnection during the first decade of the telecoms reform. Its apathy has eventually contributed to the boom of bypassed international calls through illegal VoIP outfits.
The mobile industry had outsized the BTTB in 2001. International telecoms carriers immediately tapped the captive but exponentially growing mobile market that remained isolated from BTTB's international gateway.
In fact, the lack of interconnection prompted this illicit and substandard business. Yet it connects millions of mobile phone users with rest of the world.