Telecom tussle erodes trust

The outgoing 2019 would go down as one of the most challenging years for Bangladesh’s telecom industry, weighed down by the ongoing tussle between the regulator and two operators as well as slump in growth in mobile and internet connections.

Mobile phone operators were also not able to make as much investment as they had wanted in the beginning of the year because of regulatory restrictions on the import of network equipment and current network maintenance and offering new services, depriving the country of much-needed investment. 

The year witnessed the biggest-ever tussle between mobile phone operators and the regulator over audit claims involving Tk 13,446 crore, which often made headlines and was the talk of the town.

No new tower was established because of the introduction of the tower licence regime, putting more pressure on the existing network as new connections were added.

The situation hurt the telecom industry so much so that service quality deteriorated and customer growth fell.

Because of the tussles and broken promises, the trust in the telecom sector has received a huge blow, experts say.

At the heart of the tussle is the telecom regulator’s audit claim of Tk 12,579.95 crore from Grameenphone and Tk 867.24 crore from Robi. 

A change in tax rates involving corporate tax as well as SIM replacement tax also creates a huge burden for the industry and all the telecom operators are bleeding consequently.

“2019 can be considered as a very disappointing and frustrating year for the telecom sector. A series of industry issues continued to rattle the industry and a few of them were unprecedented,” said SM Farhad, secretary general of the Association of Mobile Telecom Operators of Bangladesh.

He said the industry’s health became even pale and vulnerable though it added some new connections to the network.

In the first 11 months, the industry added only 77.11 lakh new internet connections through mobile internet and broadband, way lower than the 1.09 crore added a year ago. Currently, the number of active internet users stand at 9.91 crore.

Once a much-hyped breakthrough for internet communication, WiMAX became a thing of the past in the country.

In 2019, mobile operators added 78.43 lakh new connections, down from 1.19 crore in 2018 and 1.87 crore in 2017, data from the Bangladesh Telecommunication Regulatory Commission (BTRC) showed.

At present, the number of mobile phone connections stands at 16.48 crore.

Mesbah Uddin, joint secretary general of the Bangladesh Mobile Phone Importers Association, said they received a favourable tax policy for local handset makers and the first three quarters were fantastic for them.

“The fourth quarter has not been very good,” said Mesbah, also the chief marketing officer of Fair Electronics, which assembles Samsung-branded handsets in its plant in Narsingdi.

He said local assemblers are now dominating the domestic smartphone market and this is the main achievement in 2019.

In another blow for the industry, at least two operators could not make as much investment in the country as they had initially planned. 

Robi, the second-largest mobile phone operator, had planned to put in $248 million in the year in the form of foreign direct investment, but it had to be content putting in $98 million.

Similarly, Grameenphone, the largest mobile phone operator, had intended to invest Tk 1,550 crore in 2019 but could only able to spend about two-thirds of the amount.  

One of the positive developments of the year is that the BTRC has started the process to formulate the guideline on fifth-generation (5G) services and plans to roll out the superfast service by 2021.

In a major leap forward for the communication sector, the Bangabandhu-1 Satellite, the country’s first communications satellite, began commercial operations in the year.

Currently, all the local television channels air their service using the satellite. This is helping the country save a huge amount of foreign currencies that would have been otherwise needed to avail the similar service from foreign companies.

Online shopping kept its growth momentum.

“We have achieved new milestones in 2019 both in terms of transactions and orders,” said Abdul Wahed Tomal, general secretary of the e-Commerce Association of Bangladesh.

According to the association’s estimate, e-commerce sales went past Tk 2,000 crore in the outgoing year, with 30 percent year-on-year growth.

Some e-commerce ventures received foreign investment and this helped grow the market, Tomal said.

He said as the market is growing rapidly, the association has received some complaints related to product quality and service. “This needs to be addressed.”

In the ICT sector, the biggest news was the opening of a Tier-4 national data centre, which will boost the country’s data storage capacity.

The Bangladesh Hi-Tech Park Authority also allocated spaces to some new companies in different parks and is developing some new parks in the country.