Land phones -phones without a future

A decade ago, people who had financial solvency would dream of getting a land phone connection. Land phone was then considered a sign of aristocracy. Many people then depended on one phone - not only land phone owners would be beneficiaries but also the people who lived near them.
People used the land phone as unique mode of communication beyond correspondence over letter. However, people's access to such communication system in general was difficult for not having the service available. People mostly would depend on commercial phones in cities where they would wait in a queue to talk their near and dear ones back at home. They would have to count cost for both incoming and outgoing calls.   
At that time, it was a tough job getting a land phone connection from the then Bangladesh Telegraph and Telephone Board (BTTB), now Bangladesh Telecommunications Company Ltd (BTCL).
People even had to wait for years for getting a connection. Besides, hectic lobbying and paying kickbacks were the usual norm. In fact, getting a BTTB land phone without paying a substantial amount of bribe was like winning a lottery in Bangladesh, a land phone user recounted.
But times changed after some private land phone operators launched their operations. As the new operators offered low cost line rate with minimal connection charge, the demand of the state owned company`s service reduced drastically and people started going for private operators' services.
Bangladesh Telecommunication Regulatory Commission (BTRC) issued a number of licences under PSTN (public switched telephone network) category in 2004 and later. The private operators gained a substantial amount of subscribers. But the leading five operators, out of 11, could not survive for long time due to their involvement with the illegal Voice over Internet Protocol (VoIP) business. Their operation were first shut in March 2010 and then cancelled. As a result, the growth of the sector halted.
Meanwhile, the demand for land phones fell dramatically across the world following the advent and rapid development of the mobile technology. Mobile technology gained popularity everywhere for its cost advantage and flexible nature. Bangladesh witnessed a similar situation, but before the maturity of its land phone market.
At present, both government and private PSTN operators have just above 1.0 million users. However, the six mobile phone operators have all together around 111 million users. This scenario shows that almost everyone who is adult has a cell phone in the country of 160 million people. Now there is no land phone use among city dwellers generally, except a few government offices.
So it can safely be said, the country`s land phone business is on the verge of extinction. There is no possibility of this sector flourishing in the era of mobile communication. Proper initiatives from both the government and the operators are also absent.
Already, nine private PSTN 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 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). Some of them did not submit their licences to the regulator yet.
Telecom experts also do not see any hope of the service in the future. The 3G consultant of the BTRC 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 their graves!"
In his opinion, 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.
Talking about the PSTN business, Mr Ferdous mentioned that 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.
Managing Director of local company Bangla Phone Ltd, Amjad Khan said, "Investment in PSTN business has to be massive. However, the return is slow which discourages businessmen at large to think of such type of business."
According to his view, "Two sides - both the government and the operators - have been failing to promote the sector."
Another official at RanksTel Abul K. Shamsuddin, who is working in the company as the chief operating officer, said the PSTN operators worldwide are evolving and migrating from TDM to IP-based converged networks (from copper-based to fibre-based). This permits them to offer triple-play services (voice, data and video) over the same connection.
The present regulations should be amended, if necessary, to accommodate this, 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 opined. He sought 'limited mobility' facility for the survival of the service.
Industry insiders, however, think that still the service could be promoted at a significant level by offering innovative new services if both government and the businessmen compromise in some contexts.
The sector was in focus till March, 2010. The land phone companies promoted the PSTN market holding different kinds of promotional activities. The 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. 11,000, 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.
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 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.
In this situation, no one can think positively about the sector. In the next ten years, perhaps our next generation will not know about the land phone service, like correspondence over letter. Mobile and text messages have reduced the importance of the written letter. Same thing will happen to land phone for innovation of mobile technology.
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The writer is a Staff Reporter of the Financial Express. He can be reached at [email protected]