rapid response


Less than a month ago, we expressed an opinion on the Bangladesh Finance Minister’s proposal to pile on more taxes on mobile use. Obviously, we could not have been the only people who objected, but looks like it has worked. Prime Minister Sheikh Hasina has given to pressure from exporters as she asked Finance Minister AMA Muhith on Wednesday to cut the proposed export tax to 0.8 percent at source. Speaking on the proposed budget for the next fiscal beginning on July 1, she also wanted the planned 2 percent tax at source on mobile phone bills altogether waived.
The Financial Express has carried a story, based on the public-domain comments we submitted to the Ministry of Post and Telecom. Other than calling and sending text messages, the mobile phone operators offer series of services like downloading of music, ringtone, wallpaper and many others. These are generally known as VAS and being offered as optional services. Now the government has proposed to categorise VAS as a separate suite of service and bring it under a licensingregime in Bangladesh. If implemented, the mobile operators will have to outsource all value added services and discontinue offering any in-house product.
Bangladesh is currently conducting a public consultation on proposed Significant Market Power regulation.  The recommendations made by an ITU consultant proposes Significant Market Power (SMP) regulation.   This is not something many regulators in our region have focused on, at least not recently (though very light flavors of SMP determinations can be found in some countries such as Pakistan).  So we sought the help of our sister research network RIA.  Using the recent experience of South Africa in using SMP in regulation (and contrasting with Namibia and Botswana which do not use SMP), Allison Gillwald of RIA gave us useful input on the pros and cons of the approach.
In December 2005 Bangladesh became connected to the SEA-ME-WE 4 undersea cable, but it took much longer for the people of Bangladesh to actually use the connectivity, because the incumbent government-owned monopoly BTTB had not been able to connect the country’s networks to the landing station in Cox’s Bazar in time. I was invited to speak on this subject at a meeting in Dhaka at which the then Minister and other senior decision makers were present (they had little alternative, there was a hartal going on outside). These comments were written up as an op ed piece and published in the Daily Star that same month. In it I recommended the following: “Without lessening the urgency of reforming Bangladesh’s regulatory framework, the immediate problem can be addressed by structurally separating the cable segment (the share of the SEA-ME-WE 4 cable, the cable station, the fibre connecting the landing station to major population centers, the redundancy channels and related facilities) from BTTB, vesting its ownership in a fully government owned company. To ensure that the new company is truly separate from BTTB and that it is efficiently managed, it is necessary to concession out its management to a competent international operator […]