The persistent introduction of progressive regulations has turned the telecom industry of Bangladesh into a bedrock of the country's technological advancement and made it the artery of the digital and then smart Bangladesh.

Promulgation of the Significant Market Power (SMP) Regulation in 2018, after processing it for over nearly a decade, is one of the remarkable regulatory measures that not only aims at further levelling the field of competition in this industry but also sets an example for all other sectors in fostering market stability.

Monopolistic accumulation of market power, especially in terms of price-setting capability, may cause an increase in price and deterioration of quality of service as well as hamper innovation and competition, leaving little choice to competitors and, most importantly, to consumers.

Grameenphone was declared an SMP in 2019 when its market share in terms of subscribers and revenue exceeded 40 percent.

Albeit, Grameenphone has accumulated market power not by chance but by prudently building upon its initial advantage of wider network coverage. It enjoys the benefits of scale, scope, and loyalty. Most of its premier or star consumers in particular are not even price-sensitive. Besides, higher revenue allows it to be more adaptive to fast-changing technologies and cognitive developments that are increasingly crucial in the multinational organisations' desperate endeavour to become successful digital service providers.

The market leader, thereby, remains much ahead of its potential competitors. No wonder, even 4 years after being declared an SMP, Grameenphone's market share of subscribers is still 43.3 percent while Robi's 30 percent, Banglalink's 23 percent and Teletalk's 3.4 percent.

In 2023, Grameenphone's revenue was Tk 15,871.6 crore while Robi's Tk 9,942 crore, Banglalink's Tk 6,149 crore and Teletalk's Tk 5,02 crore.

Even after Robi and Banglalink have turned around significantly in recent years, their present revenue and profit gaps with Grameenphone are still huge.

At the end of 2023, Grameenphone's net profit was Tk 3,307.5 crore, whereas Robi's was only Tk 321 crore. Banglalink does not officially disclose its profit margins, but that can be roughly imagined.

Fairness in competition is instrumental in ensuring the consumer welfare of nearly 19 crore telecom subscribers in the country. Still, the concept of a level playing field is rather complex, where 'levelling' involves correctly identifying and aptly defining the pertinent fields first.

Grameenphone has secured such a position in the industry that in the face of any regulation equally applicable to all it either gains the most or loses the least.

The telecom regulator has so far imposed three out of 20 imposable price- and non-price-based restrictions on the SMP operator (SMPO): obtaining prior permissions for launching services, a shorter lock-in period (60 days for SMPO, 90 for others) for mobile number portability (MNP) services, and a lower mobile termination rate (MTR) as the call terminator during interconnection (Tk 0.07 for SMPO, Tk 0.1 for others).

The telecom watchdog had also intended to raise the floor tariff of voice calls for the SMPO but refrained due to the proliferation of Covid-19 back in 2021.

As was anticipated by many, these restrictions did not yet produce a significant impact. Obtaining prior permission for launching services and packages is a procedural aspect that prevailed in various forms; it did not put additional limits to scale or scope.

In a market where the use of multiple SIMs by subscribers is common, MNP makes little difference irrespective of the restriction imposed.

With a large subscriber base, off-net calls were never of great concern to Grameenphone as it was to the other operators, and as such the differential MTR also did not affect the market leader much.

To enhance the competitiveness of non-SMP operators (NSMPOs), the price-setting capacity of the SMPO needs to be contained a little; price-based restrictions are more likely to be effective.

To avoid service deprivation to the consumers, however, the SMPO should rather be encouraged to distinguish its services through innovation and quality enhancement.

Differential floor tariffs for voice calls, as well as for data, may now be considered again. This may help the NSMPOs to acquire some highly price-sensitive subscribers.

There is a global practice of implementing differential retail and wholesale tariffs for SMPOs. Countries such as Australia and several areas of the EU have already implemented asymmetric tariffs based on their SMP situation. Similarly, asymmetric measures may also be considered in other aspects such as SIM tax, contribution to the social obligation fund (SOF), number of packages, etc.

The sharing of telecom infrastructures facilitates optimum utilisation of resources and reduces operating expenses. Active sharing may allow the NSMPOs to form credible network coverage through tech alliance but may also reduce the incentive for network expansion of individual operators.

It is, however, possible to design operating models of infrastructure sharing while ensuring adequate incentives for network expansion. Such models may be useful, especially for in-built solutions (IBS) based on distributed antenna systems (DAS) in big cities, long underpasses, etc.

Bundle offers, a charm of the industry, often contain price implications in between and beyond the printed lines.

Serious scrutiny of the relevant proposals and effective monitoring to spot gaps between preaching and practice is important. Such monitoring is also needed to ascertain if the facilities provided by the operators in the retail channel, within and outside the industry, are healthy and competitive; the SMPO naturally has more power to wield there too. There may as well be a threshold on channel benefits or commissions set for the SMPO.

The objective of the SMP regulation is to ensure consumer welfare by improving the health of competition in the industry so that services remain safe, efficient and affordable.

There are also well-conceived instruments provisioned for levelling the fields. Measured and effective implementation of these instruments is needed to facilitate the NSMPOs' market power improvement without compromising the quality of service or hampering network expansion while ensuring adequate incentives for the SMPO to innovate and attain excellence.

The writer is a telecom engineer, retired military officer, and a former director general of Bangladesh Telecommunication Regulatory Commission.