Legalising 'illegal' use of VoIP
Sunday, 3 May 2009
Shahiduzzaman Khan
A parliamentary committee on post and telecommunications ministry recommended that the Voice over Internet Protocol (VoIP) should be opened up for increasing government's revenue earnings from the telecom sector. The committee asked the Bangladesh Telecommunication Regulatory Commission (BTRC) to explore the technical and legal process immediately to legalise the use of VoIP. The BTRC has also been asked to submit a report to the ministry concerned detailing the ways of opening up the VoIP.
The telecom watchdog last year allowed three private international gateways (IGWs) to handle international calls generated to and from Bangladesh. But unfortunately, the number of calls made through illegal VoIP could not be stopped because of uncompetitive pricing. The IGWs operators claimed that over 40 percent international calls were being handled by illegal VoIP operators due to irrational pricing.
Legal international call handlers now charge 4.0 cents a minute, which hovers between 2.5 and 3.0 cents on the illegal market. The standing committee suggested bringing down the charge to 3.0 cents. Due to lack of government policing, private mobile and fixed-phone operators illegally grabbed a huge share of the market, by using VoIP technology since it became popular in 2001. The BTRC has realised Tk 8.61 billion from several mobile and PSTN operators in fine for their involvement in illegal VoIP business.
The committee also proposed withdrawal of Tk 800 tax on SIM card, reducing international call routing charge from 4.0 cents to 3.0 cents, zero duty on import of mobile phone sets valued up to TK 3,000 each and fixing monthly internet charge at Tk 300 for home users. It gave a proposal for reducing import duty on telecom equipment from existing 10 to 65 percent to 10 to 25 percent and also on fixed phone equipment from existing 45 percent to 25 percent. Besides, the committee suggested that import duty on landline phone sets should be brought down to zero from Tk 800. If the recommendations are translated into action, the committee expected that the government's yearly earnings from telecom sector would go up to Tk 75.0 billion from existing Tk 60.0 billion.
During the regime of the caretaker government, the telecom regulator auctioned off three international call service licenses to three private operators, breaking the decades-old monopoly by the state-run Bangladesh Telegraph and Telephone Board (BTTB), now Bangladesh Telephone Company Limited (BTCL). Novotel, Bangla Trac and Mir Telecom won the licences offering 51.75 per cent of their call tariffs to the BTRC.
According to a report of international telecom research organisation -- Telegeography -- Bangladesh was the third fastest growing destination for international VoIP traffic in 2004. The country marked a growth of 97 per cent. Brazil and Nigeria led the world in growth with 112 per cent and 103 per cent and VoIP traffic grew by 35 percent globally in 2004. The government first decided to legalise VoIP in June 2002. However, the decision approved on November 10, 2003 by a cabinet meeting.
Indeed, VoIP is a revolutionary technology in the telecommunications age that is poised to take over traditional communications over the public switched telephone network (PSTN). Although VoIP telecommunication still has many hiccups, such as unreliability in power transmission and quality of voice as compared to old-fashioned analogue telephone lines, it is still the core technology in voice communications, especially for long-distance overseas calls and Internet Protocal (IP) - IP-based telecommunications among large corporations. IP, a method by which data is sent from one computer to another on the Internet, would open up new uses for voice, but it also affects revenues in the traditional voice markets.
So far, illegal telecom operators made bumper businesses with VoIP in the absence of an effective telecom regulatory policy. Hundreds of illegal operators brought small aperture terminals from abroad clandestinely and launched VoIP exchanges mostly in the capital city and Chittagong. Illegal VoIP business operated with the active cooperation from a section of officials of the BTTB and the telecom ministry. During the caretaker government tenure, crackdown began on this illegal business. VoIP equipment and exchange worth billions of taka were seized by the members of the Rapid Action Battalion (RAB). Most of the illegal businesses were closed down. But the sufferings of the international callers mounted with the termination of illegal exchanges. Still now, the international callers have to wait for hours together for their overseas calls getting through as the BTTB has only limited channels to cater to the huge demand.
The government is also going to discourage use of V-SATs BTRC explains that the authorities will assess the justification of using V-SATs on a case-to-case basis and decide accordingly. In some respect, its use appears to be permanently banned. What will happen when there is a major disruption in international telecom service following shutdown of BTCL's submarine cable? This is a pertinent question as there will be no back-up of private V-SATs to come to the rescue.
Indeed, Bangladesh is linked to only one submarine cable while most of the countries have two or more optic fibre cable connections. In case of any major disaster, the country will have to wait until its repair, use backup link via satellite or wait for a link-up to another undersea telecom cable. When the first offer of joining the optic fibre cable came about a decade and a half ago, it was rejected on 'security ground's'. What a 'wise' decision that was! The then government had no idea what submarine cable and its utility was. When it finally understood, much time had already elapsed. However, Bangladesh joined a consortium of submarine cable much later.
The BTCL gets both IGW and ICX licences by default being incumbent international service provider. Experts are questioning the efficiency of the BTCL in using these licences. Although it was made a holding company, the BTCL is bedevilled by widespread irregularities. Such a big operator cannot handle the lone affairs of land phone business properly. Land phone charge is still high in South Asia. Trouble with ghost billing and phone shifting still haunts the customers. Many subscribers are reportedly shying away from the BTCL and getting mobile connections. Trade union leaders have allegedly tightened their grip on the BTCL administration. When this is the state of affairs inside the BTTB, how could it be an effective body in handling overseas calls?
A former BTRC chief admitted a very hard reality. He said interconnection problem challenges the government's roadmap to privatise the international telecom services. He criticised the BTCL and a section of mobile operators for not fully complying with the interconnection law. Both are charging 'very high prices' for their nationwide transmission capacity. Henceforth, an effective interconnection regime has been stipulated in the new licences to ensure a level-playing field. What is important at this stage is that the inter-connection problem be addressed first for the smooth implementation of the long distance telecom policy.
It appears that a comprehensive long distance telecom policy was prepared and approved, much to the relief of the users and the stakeholders. Nevertheless, a policy may be good, but its effective implementation depends on seriousness and honesty of the people and agencies concerned. The BTCL is already a problem-ridden state entity. Private operators' dependence on call routing to overseas destinations via BTCL's submarine cable might end in disaster. Besides, there is a need to strictly regulate international call tariffs, so that these do not become expensive. Users must get some relief from existing high call charges.
However, the country's international call market is about 25 million minutes a day, with 80 percent traffic home bound. More than 50 per cent of the market is being illegally grabbed by VoIP operators .The market is worth Tk 30.00 billion and it is growing rapidly because of the huge exodus of Bangladeshi workers. More than five million Bangladeshis now work and live abroad and officials have projected more people to leave the country this year.
It is expected that more privatisation of the international long distance call service would lead to a price war among the legal carriers, drying up the source of revenues for the illegal VoIP operators. In fact, illegal VoIP operators thrived because of the protection enjoyed by former BTCL. But as soon as more private companies start operation, it will be impossible for these illegal operators to stay afloat. szkhan@thefinancialexpress-bd.com
A parliamentary committee on post and telecommunications ministry recommended that the Voice over Internet Protocol (VoIP) should be opened up for increasing government's revenue earnings from the telecom sector. The committee asked the Bangladesh Telecommunication Regulatory Commission (BTRC) to explore the technical and legal process immediately to legalise the use of VoIP. The BTRC has also been asked to submit a report to the ministry concerned detailing the ways of opening up the VoIP.
The telecom watchdog last year allowed three private international gateways (IGWs) to handle international calls generated to and from Bangladesh. But unfortunately, the number of calls made through illegal VoIP could not be stopped because of uncompetitive pricing. The IGWs operators claimed that over 40 percent international calls were being handled by illegal VoIP operators due to irrational pricing.
Legal international call handlers now charge 4.0 cents a minute, which hovers between 2.5 and 3.0 cents on the illegal market. The standing committee suggested bringing down the charge to 3.0 cents. Due to lack of government policing, private mobile and fixed-phone operators illegally grabbed a huge share of the market, by using VoIP technology since it became popular in 2001. The BTRC has realised Tk 8.61 billion from several mobile and PSTN operators in fine for their involvement in illegal VoIP business.
The committee also proposed withdrawal of Tk 800 tax on SIM card, reducing international call routing charge from 4.0 cents to 3.0 cents, zero duty on import of mobile phone sets valued up to TK 3,000 each and fixing monthly internet charge at Tk 300 for home users. It gave a proposal for reducing import duty on telecom equipment from existing 10 to 65 percent to 10 to 25 percent and also on fixed phone equipment from existing 45 percent to 25 percent. Besides, the committee suggested that import duty on landline phone sets should be brought down to zero from Tk 800. If the recommendations are translated into action, the committee expected that the government's yearly earnings from telecom sector would go up to Tk 75.0 billion from existing Tk 60.0 billion.
During the regime of the caretaker government, the telecom regulator auctioned off three international call service licenses to three private operators, breaking the decades-old monopoly by the state-run Bangladesh Telegraph and Telephone Board (BTTB), now Bangladesh Telephone Company Limited (BTCL). Novotel, Bangla Trac and Mir Telecom won the licences offering 51.75 per cent of their call tariffs to the BTRC.
According to a report of international telecom research organisation -- Telegeography -- Bangladesh was the third fastest growing destination for international VoIP traffic in 2004. The country marked a growth of 97 per cent. Brazil and Nigeria led the world in growth with 112 per cent and 103 per cent and VoIP traffic grew by 35 percent globally in 2004. The government first decided to legalise VoIP in June 2002. However, the decision approved on November 10, 2003 by a cabinet meeting.
Indeed, VoIP is a revolutionary technology in the telecommunications age that is poised to take over traditional communications over the public switched telephone network (PSTN). Although VoIP telecommunication still has many hiccups, such as unreliability in power transmission and quality of voice as compared to old-fashioned analogue telephone lines, it is still the core technology in voice communications, especially for long-distance overseas calls and Internet Protocal (IP) - IP-based telecommunications among large corporations. IP, a method by which data is sent from one computer to another on the Internet, would open up new uses for voice, but it also affects revenues in the traditional voice markets.
So far, illegal telecom operators made bumper businesses with VoIP in the absence of an effective telecom regulatory policy. Hundreds of illegal operators brought small aperture terminals from abroad clandestinely and launched VoIP exchanges mostly in the capital city and Chittagong. Illegal VoIP business operated with the active cooperation from a section of officials of the BTTB and the telecom ministry. During the caretaker government tenure, crackdown began on this illegal business. VoIP equipment and exchange worth billions of taka were seized by the members of the Rapid Action Battalion (RAB). Most of the illegal businesses were closed down. But the sufferings of the international callers mounted with the termination of illegal exchanges. Still now, the international callers have to wait for hours together for their overseas calls getting through as the BTTB has only limited channels to cater to the huge demand.
The government is also going to discourage use of V-SATs BTRC explains that the authorities will assess the justification of using V-SATs on a case-to-case basis and decide accordingly. In some respect, its use appears to be permanently banned. What will happen when there is a major disruption in international telecom service following shutdown of BTCL's submarine cable? This is a pertinent question as there will be no back-up of private V-SATs to come to the rescue.
Indeed, Bangladesh is linked to only one submarine cable while most of the countries have two or more optic fibre cable connections. In case of any major disaster, the country will have to wait until its repair, use backup link via satellite or wait for a link-up to another undersea telecom cable. When the first offer of joining the optic fibre cable came about a decade and a half ago, it was rejected on 'security ground's'. What a 'wise' decision that was! The then government had no idea what submarine cable and its utility was. When it finally understood, much time had already elapsed. However, Bangladesh joined a consortium of submarine cable much later.
The BTCL gets both IGW and ICX licences by default being incumbent international service provider. Experts are questioning the efficiency of the BTCL in using these licences. Although it was made a holding company, the BTCL is bedevilled by widespread irregularities. Such a big operator cannot handle the lone affairs of land phone business properly. Land phone charge is still high in South Asia. Trouble with ghost billing and phone shifting still haunts the customers. Many subscribers are reportedly shying away from the BTCL and getting mobile connections. Trade union leaders have allegedly tightened their grip on the BTCL administration. When this is the state of affairs inside the BTTB, how could it be an effective body in handling overseas calls?
A former BTRC chief admitted a very hard reality. He said interconnection problem challenges the government's roadmap to privatise the international telecom services. He criticised the BTCL and a section of mobile operators for not fully complying with the interconnection law. Both are charging 'very high prices' for their nationwide transmission capacity. Henceforth, an effective interconnection regime has been stipulated in the new licences to ensure a level-playing field. What is important at this stage is that the inter-connection problem be addressed first for the smooth implementation of the long distance telecom policy.
It appears that a comprehensive long distance telecom policy was prepared and approved, much to the relief of the users and the stakeholders. Nevertheless, a policy may be good, but its effective implementation depends on seriousness and honesty of the people and agencies concerned. The BTCL is already a problem-ridden state entity. Private operators' dependence on call routing to overseas destinations via BTCL's submarine cable might end in disaster. Besides, there is a need to strictly regulate international call tariffs, so that these do not become expensive. Users must get some relief from existing high call charges.
However, the country's international call market is about 25 million minutes a day, with 80 percent traffic home bound. More than 50 per cent of the market is being illegally grabbed by VoIP operators .The market is worth Tk 30.00 billion and it is growing rapidly because of the huge exodus of Bangladeshi workers. More than five million Bangladeshis now work and live abroad and officials have projected more people to leave the country this year.
It is expected that more privatisation of the international long distance call service would lead to a price war among the legal carriers, drying up the source of revenues for the illegal VoIP operators. In fact, illegal VoIP operators thrived because of the protection enjoyed by former BTCL. But as soon as more private companies start operation, it will be impossible for these illegal operators to stay afloat. szkhan@thefinancialexpress-bd.com