Colloquium: Bangladesh TRE Study 2008

Posted on September 23, 2008  /  12 Comments

Conducted by Miraj Khaled.

Bangladesh has had a monopoly since 1989. The sector was opened in 1996. The Telecom Act was enacted in 2001. The regulator was established under this Act.

During this period the number of mobile subscribers increased significantly, with a peak in 2006. The fixed phone tariff fell dramatically from 2001 to 2002 and again in 2007.

The number of mobile subscribers seem to have grown exponentially, while the fixed subscribers remain much unchanged. There is a sharp rise from 2002 to 2003, this can be explained by the entrance on Banglalink in 2004 into the sector.

The six main mobile operators are AKTEL, Banglalink, Citycell, Grameenphone, Teletalk and Warid. Grameenphone seems to have dropped from over 70% market share in 2001 to 45% in 2008.

Total investment seems to be stable over the period from 2000 to 2003 (ITU). 2003 to 2004 (ITU) saw a sudden increase in investment which can be correlated to the positive effects on telecom revenue.

Fixed sector: The sector is dominated by BTTB. This would recently restructured and renamed Bangladesh Telephone Company Limited (BTCL).However, a separate company manages the submarine and cable related backbone infrastructure. At present there are fourteen private operators offering services, with seven main operators. They are, BTTB, Telebarta, Ranks Telecom, Onetel, National Telecom and Peoples Telecom.

Mobile sector: The sector has intense competition and this has resulted in the producing some of the lowest tariffs. The state owned Teletalk only has 3% market share. The largest mobile operator is Grameenphone wit 45% market share, Banglalink comes in second place with 22% market share. As of march 2008 BTRC reports that mobile penetration has reached 30%.

Rohan: LIRNEasia does not report mobile subscribers, only the number of mobile SIMs.

Rohan: A weighted average for ARPU would be useful to further analyse the data.

Broadband/ Internet: Internet penetration is very low. Broadband data is not existent. However, there is growing access to internet via mobile. The quality of service also needs to be addressed. Broadband is accessed mainly through ADSL and cable internet. There is no HSPA ( due to the lack of 3G technologies).

Helani: Is there a wireless network providing broadband in Dhaka?

Miraj: No…

Methodology: sample size was 27, and the overall response rate was 34.6%. The main response mode was through the online survey (13), face to face meeting (9) and Email (5). The desired level of 15 responses per category was not achievable. Category 2 recieved the lowest response. Some dimensions were problematic to the respondents such as quality of service and USO. Operators were not willing to provide data and this required reliance on annual reports of the parent companies. BTRC was not very helpful in this regard either.

Market entry: the fixed sector received the highest score followed by mobile and broadband. In spite of mobile having a relatively competitive market place it receives a low score. Though the broadband sector allows to issue licenses it does not easily allocate spectrum etc ( a problem of access to resources exists).

Access to resources: allocation of spectrum seems to be a serious concern. BTRC has started spectrum farming and hopes to sell spectrum to operators soon. The backbone sharing will be made mandatory for all operators.

Helani: is the rates mandatory as well or can it be negotiated between companies?

Miraj: will look into further information on that.

Helani: Need to focus on what has been done and not what will be done in the future. It is ok to mention them but with a focus on the fact that it is not implemented.

Interconnection: Received satisfactory scores in all but broadband. Interconnection rates and refusal to connect by the significant market player is a major concern.

Helani: why are broadband interconnection scores so low?

Miraj: 2004/ 05 saw part- operation of an internet exchange which many of the big players are connected to.

Tariff regulation: Tariff circuits are in place. In the fixed sector the tariff is set by BTTB and is matched by the other operators. Broadband tariffs are very high even after there has been significant reductions this year.

Anti-competitive practices: There is no action on the part of the regulator to curb the activities of the incumbent. BTRC usually overlooks anti- competitive behavior by BTTB.

USO: no clear directions and guidelines in existing policy. A significant urban- rural gap exists in mobile adoption. Fixed and broadband has larger inequalities. The regulator has now asked for 100% broadband coverage in a period of 5 years.

QoS: Mobile received a reasonably good score even though there have been definite deficiencies. Mobile operators face problems due to the lack of access to spectrum. Fixed sector score represents the QoS of BTTB. The broadband sector received the lowest score out of the entire survey.

Overall, the mobile sector performed the best while broadband seems to have a lot of negative feeling.


  1. “Helani: Is there a wireless network providing broadband in Dhaka?

    Miraj: No…”

    What is Miraj talking about? there are already numerous companies providing wimax in Bangladesh.

  2. “USO: no clear directions and guidelines in existing policy.”

    – I guess you have not looked at the existing policies yet, thoroughly. All the benchmarks are there in the policies.

    “The regulator has now asked for 100% broadband coverage in a period of 5 years.”

    -What’s wrong asking for 100% broadband coverage in a period of 5 years? The regulator’s Broadband policy is in WiMax, which is by nature wireless and similar to mobile technology. Since the mobile companies were able to cover over 85-90% of the country in 4 years, there is no reason to doubt WiMax providers can not do the same.

  3. There is nothing wrong with WiMax providing nationwide broadband within 5 years in Bangladesh. But the mobile broadband (3G/HSPA) can do a lot better job in less than one year.

    More than 95% of the population is under 2G mobile networks’ coverage in Bangladesh. Upgrading this coverage with 3G/HSPA services solely depends on issuing the licenses.

    The 3G/HSPA has a global track record of success. The Global mobile Suppliers Association has elaborated the numbers in its website.

    In the backdrop of this if the governments decide to promote WiMax, which is yet to come up with standardized terminals, what can one say? Digital divide is attributed to policy and regulatory hurdles. Artificial barriers in the market have been dwarfing the digital growth in Bangladesh and elsewhere.

  4. Abu,

    Allowing existing players to offer mobile broadband was one suggestion we made in our rapid response.

    [quote]If not WiMax, we strongly recommend allowing existing players to offer mobile broadband services… Prohibiting existing operators to provide mobile broadband wireless service as offered in IEEE 802.16e international standard (Paragraph 9.01) may not yield the expected high competition and low prices. If none of the new entrants are ready to offer mobile broadband services this would also mean not meeting the emerging broadband demand for mobile users.[unquote]

    Full document is here:

  5. “Upgrading this coverage with 3G/HSPA services solely depends on issuing the licenses.” says Abu Saeed.

    It has always been a puzzle to me why one needs additional new licenses for 3G. The services one can get today on a GSM network are substantially more today than they were in the 1990s. Did anyone issue new system licenses to make this possible? No. Same system license; additional services. But the response is that 3G requires additional and different frequencies.

    As networks grow they require changes in frequency assignments. In one case, it’s incremental and within the same band (e.g., more GSM 900 frequencies). In the second case, it can be more frequencies from a different band (operator holding GSM 900 frequencies is given GSM 1800 frequencies). In the third case, an operator wishing to change standards (e.g., operator on AMPS, DAMPS, or whatever, wants to move to GSM) is given new frequencies. In none of these cases is there a need for a system license to be issued. Only for more/different frequencies. No big deal.

    Why a difference for 3G only? Why can’t spectrum managers simply give 3G frequencies to current operators? Use auctions or whatever method, but no need to make a big fuss. Identify the frequencies that are available and let the operators bid for them. Different qualities, different prices.

    If additional operators are wanted, then go through the full song and dance, for that focused task. Just because the Europeans made a mistake, is it necessary for every one else to follow?

  6. Chanuka, Thanks for your clarification.

    But the governmnet should not punish the mobile operators with hefty license fees for 3G while comforting the WiMax camp with comparitively token charges. The mobile operators have been heavily punished by denying the International Gateway licenses in Bangladesh. BTRC had also allowed so-called limited mobility to the PSTN providers. In addition to SIM tax, such regulatory barriers are counterproductive. Still we expect the mobile operators will provide affordable and speedy wireless access to Internet. Why?

  7. “Why a difference for 3G only?” asks Rohan.

    The term “3G license” is a telecoms apartheid that was born in Western Europe and now being widely practiced by the Governments having corrupt and inefficient tax collection regime.

    The old guards (Including John McCain) in policymaking are illiterate in terms of ICT usage. They don’t check emails, let alone using Skype, Facebook, YouTube etc. Therefore, such ignorant elites lack the basic understanding about affordable broadband using cellular mobile technology.

    Wireless broadband is a natural evolution of cellular mobile service. Innovation has gone to such a level that 3G in 900 MHz. is now a commercial reality and it is fast gaining momentum. But the regulatory outfits in our part of the world are reluctant to allow the mobile operators to embrace such innovative solutions and bridge the digital divide without compromising the profit margin.

    Such puritan decisions are actually depriving the exchequers from various forms of taxes. Therefore, common sense should prevail in telecoms regulation and policy formation.

  8. @Rohan Samarajiva

    Judging by the regulators tone in recent news media, they don’t want a new entrant in BD mobile market. Most likely the top three player will get the 3G spectrum. A auction will be held for 3G, just for price discovery for spectrum fee. Since initially (1996) mobile licenses was given out for free, the GOVT is upset and is hellbent on not making the same mistake for the 3G spectrum.

  9. @Abu Saeed Khan

    Discussing which broadband technology (WiMax, 3G, HSPDA, LTE, Fiber..) is best for Bangladesh is pointless and would get you no where. With today’s WiMax auction completed and 3G auction in a few months, the regulator have succeeded in introducting various forms of technologies in BD; now the free market capitalism (supply & demand) will decided which technology will thrive and which will fail in Bangladesh.

  10. Dear Mr. Amar:

    there’s nothing wrong with asking 100% coverage by 5 years from the aspiring wireless broadband licensees. in fact that is a commendable goal. but as Mr. A.S. Khan has mentioned already, this goal may have better chance of success if the new wireless broadband licenses were not restricted to new entrants only [and limited to a single technology i.e. Wimax].

    as for USO, i said no “clear directions” in the policy objectives. that’s the key, clear targets and directive on how to achieve USO. but very recent licensing guidelines contain better benchmarks.

  11. @Chanuka Wattegama

    I also would have liked the regulator to include everyone (mobile companies, new investors, foreign investors…) in these auctions, but for some reason the regulators doesn’t want any vertically integrated telecom companies for at least 3 years. Maybe this will bring in more competition and further lower the prices(?). But after the 3 years have passed the mobile companies or anyone else for that matter can buy out the firms that won those licenses as they all must go for an IPO in the local stock exchanges. So the Mobile companies still have a chance to get into the Long Distance telephony business, but they just have to wait for at least 3 years.

  12. @ Miraj Khaled

    I recently received a response from BTRC. They do have extremely thought out policies but BTRC does a horrible job in expressing these policies properly.