The number of mobile internet subscribers in Bangladesh witnessed a significant drop of 44 lakh in November, contributing to an overall decline in internet subscribers to 13.28 crore from that in October.

This decline marks the highest drop in internet subscribers since August 2021, based on data available on the website of Bangladesh Telecommunication Regulatory Commission (BTRC).

It also represents the fifth consecutive month of decline since July. Over those five months, internet subscriber numbers have decreased by a staggering 90 lakh.

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Industry experts identified a VAT hike on SIM cards as the primary reason for this decline.

In July, the VAT was raised by 50 percent, from Tk 200 to Tk 300.

This hike has made it difficult for mobile operators, particularly smaller ones like Banglalink and Robi, to continue subsidising SIM cards.

Larger operators like Grameenphone, with greater financial resources, have managed to absorb the tax hike.

This resulted in fewer new connections and increased competition imbalances.

The increased cost of SIM cards has also discouraged onboarding of new customers, especially amid ongoing economic challenges that have reduced disposable income.

"We have been observing the declining trend in a number of connections for the last couple of months. High rate of inflation is the primary reason for such scenario," said Shahed Alam, chief corporate and regulatory officer at Robi Axiata.

Besides, the increased rate of SIM tax decreasing mobile network operators' capability of providing subsidy in new customer acquisition resulted in an overall decline in the total number of subscribers, he said.

"The recent decline in mobile internet subscribers can be attributed to several factors," said Taimur Rahman, chief corporate and regulatory affairs officer of Banglalink.

"The current economic challenges have likely slowed the entry of new users and the reactivation of inactive ones," he said.

The increase in SIM tax in the last budget has made it harder for mobile operators to subsidise SIM cards -- an essential driver of subscriber growth in the past, he said.

Smaller operators are particularly affected as larger ones can afford greater subsidies, which exacerbates competition imbalances in the telecom market, Rahman said.

To reverse this trend, policymakers should consider reducing the SIM tax to make connectivity more affordable, he said.

At the same time, government-led digital literacy initiatives could significantly boost mobile penetration, delivering wider socioeconomic benefits, he added.

A significant reason for the drop in active users could be economic hardship or growing reliance on fixed broadband, but the definition of active mobile internet users also requires scrutiny, Abu Nazam M Tanveer Hossain, a telecom expert.

The current report considers only Mobile Station International Subscriber Directory Numbers (MSISDNs) active in the past three months, ignoring usage patterns or devices, he said.

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"The regulator should prioritise unique user numbers, which is feasible as each MSISDN is linked to an NID. This would help determine whether changes in user numbers reflect genuine trends or a reporting strategy by operators," he added.

According to BTRC data, November's decline was solely due to the fall in mobile internet subscribers, reducing the total to 11.90 crore. The number of broadband users remained unchanged at 1.37 crore.