Land phone business now going extinct

The country's land phone business is on the verge of extinction. This has been attributed mainly to a rapid growth of mobile phone services and absence of proper initiatives from both the government and the operators.
Already, nine private PSTN (public switched telephone network) operators out of 11 have closed down their businesses. The remaining two--RanksTel and Bangla Phone-- are now limping along with state-owned BTCL that is only surviving with no growth.  
Subscriber-based private land phone operators stood at just above 0.25 million which was more than 0.84 million before shutdown of operation of five PSTN companies in 2010 by the telecom regulator.
Moreover, the BTCL (Bangladesh Telecommunications Company Limited) subscribers varied between 0.7 million and 0.9 million in last 11 years, according to data released by its annual report.
RanksTel is operating in central zone (Dhaka) with 0.25 million subscribers while Bangla Phone covers North Zone (Mymensingh region) with just above 5000 users.
The companies that are not in operation now are Tele Barta (Jubok Phone), National Telecom, WorldTel, Jalalabad Telecom, Westec, OneTel, SA Telecom, Nextel Telecom and Integrated Services (Sheba Phone). Sources said some of them did not submit their licences to the regulator yet.
The PSTN operators started landline business in the country taking licences from the Bangladesh Telecommunication Regulatory Commission (BTRC) between 2004 and 2009 in three categories -- national, zonal and rural.
Former BTRC consultant Abdullah Ferdous said, "The landline is a dead issue not only in Bangladesh, but also globally. Only difference is 'history'. Others had a glorious past and we never had one. Our landlines just couldn't take off the ground. Others which flew high are all heading back to the graves!"
He told the FE that public company BTCL could not flourish because of inefficiency and corruption. The private PSTN companies failed because they never really tried to make business out of selling PSTN services. Telecom is a serious business which needs huge investment, he opined.
Amjad Khan, managing director of Bangla Phone Ltd, said "Investment in PSTN business is huge. However, return is slow which discourages the businessmen at large to be concentrated in such type of businesses."
"Two sides- both the government and the operators- have been failing to promote the sector," he thought.
Abul K. Shamsuddin, chief operating officer of RanksTel said the PSTN operators worldwide are evolving and migrating from TDM to IP-based converged networks (from copper-based to fiber-based). This permits them to offer triple-play services (voice, data and video) over the same connection.
The present regulations should be amended to accommodate this, if necessary, he suggested.
He pointed out that the regulator should go for harmonisation of policies here for creating a level playing field.
"Interconnection charge is a big burden and hindrance for the growth of the small operators. Sender-keeps-all model of interconnection settlement for small operators is required," he told the FE. He sought 'limited mobility' facility for the survival of the service.
Industry sources said once people were mostly used to the land phone service for their business as well as social status. But the trend has changed now and replaced mobile telephony service everywhere for its cost advantage and flexible nature.
They, however, said still the service could be promoted at a significant level if both government and the businessmen compromise in some contexts.    
Mr Amjad told the FE that in developed countries, people are used to land phones when they are in office but such culture did not develop here.
The sector was in focus till March, 2010. The land phone companies promoted the PSTN market holding different kinds of promotional activities. Therefore, five PSTN operators attracted 0.689 million users under their networks within a few years.
At that time, RanksTel was the market leader with more than 3,00,000 subscribers followed by PeoplesTel's 1,60,000, and National Telecom's 1,38,000, Dhaka Phone's 77,000 and WorldTel's 14,000.
Besides, Telebarta Ltd. had 56,000 users, Jalalabad Telecom Ltd. 11000, Onetel Communication Ltd. 40,000, Westec Ltd. 17000, Sheba Phone Ltd. (ISL 11,000, S. A. Telecom System Ltd 18,000 and Banglaphone Ltd. 2,000.    
Talking about the PSTN business, Mr Ferdous also said small investment and high hopes of the operators on making money by VoIP sapped the vitality of landline business. Almost everyone was caught for VoIP, he mentioned.
Of the 11 private PSTN operators, operations of five companies-- Dhaka Phone, WorldTel, RanksTel, PeoplesTel and National Telecom-were shut down in March 2010 and their licences were cancelled in May in the same year due to their alleged involvement in illegal VoIP business.
Later in 2011 and 2012, licences of RanksTel, WorldTel and National Telecom were revalidated.  But only one operator--RanksTel resumed its operation.
In the meantime, the companies incurred huge losses due to lack of maintenance of their capital machinery and increased burden of bank loans. Already two companies National Telecom and WorldTel claimed Tk15.13 billion in separate lawsuits against the BTRC.