Govt learns its lesson on price controls

The government has decided against setting floor or ceiling prices for mobile internet, much to the dismay of a couple of mobile carriers who were pushing for a price bound to make it a level playing field.

"Our current position is against fixing the data price considering the customers' pain even though we could have earned more from the telecom operators as tax and revenue sharing," Telecom Minister Mustafa Jabbar told The Daily Star.

The government's resistance comes after its earlier move to fix a price band for voice calls ended up hiking the cost for end users.

In August last year the government fixed the floor price of Tk 0.45 per minute for all mobile calls. Previously, the minimum charge was Tk Tk 0.25 per minute for calls on the same network and Tk 0.60 per minute for calls to a different network.

Before the price bound came, the average charge for calls to another mobile number for Grameenphone subscribers was Tk 0.64 per minute. This went up to Tk 0.73 per minute from the fourth quarter of 2019.

It is the same scenario for other networks' users.

Jabbar was initially in favour of enacting a price bound for data too and even got a group of experts from the International Telecommunication Union to run cost modelling.

The cost modelling showed the move would increase the end users' costs.

"We cannot accept that," Jabbar added.

Subsequently, in a meeting with the Prime Minister's ICT Affairs Adviser Sajeeb Wazed Joy at the telecom division's headquarters recently, it was decided that the data prices would not be fixed for the next few years at least, said an official who was present.

However, this was not mentioned in the meeting minutes.

The reason being, the government has decided to ignore the requests of the operators but will never officially say so, said another official who attended the meeting.

Currently, there are about 9.40 crore active mobile internet connections in the country and more than half of them are using regular packages and offers.

About 35-40 per cent of the internet users are using promotional packages, which are cheaper than the regular packages, according to a report presented at the meeting.

The move would have also hampered internet penetration and hence the government's Digital Bangladesh agenda, said a senior official of the Bangladesh Telecommunication Regulatory Commission (BTRC).

It will be state-run Teletalk that will be most hit by the price bound on data price and Grameenphone the most benefitted, as per the presentation made in the meeting.

The Daily Star have learnt that the country's second largest carrier Robi has been pushing for the price bound on data for years.

"The absence of a data floor price is distorting market competition to a great extent and hence causing disparity," said Shahed Alam, chief corporate and regulatory officer of Robi.

Continuation of this regime will increasingly make business unsustainable for smaller operators, the evidence of which is quite visible in Robi's financial reports published regularly, he said.

"Eventually, this situation will lead to a reduction in investment, which will have direct negative implications on data services that we are already witnessing."

The regulator was on the track when it identified Grameenphone as an operator with a Significant Market Player (SMP).

"The regulator rightly recognised the imbalanced market competition that prevails in the telecom industry today and it is very clear that market power is being abused to provide cross-subsidy on data services. Operators are being allowed to continue with predatory pricing -- killing off competition," Alam added.

Banglalink, the country's third largest mobile operator, is against that move.

"Given the current state of digitalisation in Bangladesh, we believe that this is too early to impose data floor pricing in the country," the operator said in a statement to The Daily Star.

The use of internet is increasing and people are gradually adopting the digital mode of life.

If data floor pricing is implemented now for all the operators, it will impede the fair competition among them and ultimately result in higher prices of internet at the customers' end.

"This will discourage a large portion of the population which is yet to embrace digitisation. Nevertheless, we believe that for ensuring competition, the dominant player should not be allowed to subsidise data as it is creating an imbalance in the market," it added.