License renewal and Digital Bangladesh

Posted on June 1, 2011 / 8 Comments

An op-ed written by Harsha de Silva, LIRNEasia’s consultant lead economist, has been published in the Daily Star in Bangladesh. Harsha emphasizes the need to ensure that an environment is created to encourage investment by the private sector to build on the success of delivering voice connectivity on wireless to take broadband to the people of Bangladesh.

Digital Bangladesh is the centerpiece of the government’s ICT policy. Therefore, the government must consider the evidence, in both Bangladesh and in fast-developing Asia, on what infrastructure is likely to make Digital Bangladesh possible. Will Digital Bangladesh become a reality on wireless network platforms operated by well capitalised and managed mobile operators, or on some government-managed wireguide-based platform? Also considered must be the evidence building up on the use of mobile applications on inexpensive phones as well as the explosion of smart phones that have as much computing power as desktop machines a few years back.

This mirrors a response I gave yesterday when speaking at an innovation event in Helsinki. The best way to advance innovation in the ICT space is improve the investment environment and free up spectrum.

8 Comments

Abdul Halik
June 2, 2011, 9:31 am
Utilisation factor will make sense only if you know how spectrum is allocated to individual operators. It is not given in slices. The correct analogy is charging an airline not for fuel, but runaway. More use, more pay.
Abu Saeed Khan
June 2, 2011, 10:21 am
@ Abdul Hakik: Landing charges vary on the aircraft’s size. Cost of gasoline applies equally to all aircraft. Be more efficient, pay less for gasoline, make more money and pay more income tax.
Rohan Samarajiva
June 2, 2011, 1:32 pm
The basic argument is that the per MHz cost should be identical for each operator.

Assume Operator A serves x customers using 1 MHz and Operator y serves 2x customers using 1 MHz. Should the government charge Operator y more per MHz?

If this were the case, what incentives would exist for efficient (=doing more with the same inputs) utilization of the spectrum resource?
Harsha de Silva
June 2, 2011, 5:59 pm
I think Mr Halik’s comment has been appropriately responded to. Even in the case of his analogy, it is not the total area of runway being used, but the per sq.ft charge of the runway, again not for airline, but aircraft.
Abdul Halik
June 3, 2011, 2:10 pm
Who says more utilisation means more efficiency? See the definition again.
Aslam
June 4, 2011, 12:37 am
Lets not get into analogies and confuse a simple matter, GP’s 1 MHz is exactly the same as Robi’s 1 MHz and both are being being allocated for next 15 years when no one knows who is going to be more or less efficient. So why there is a price difference. One may argue if spectrum can be sold at a premium price then why government is selling it on a discount?

BTW, BTRC charged same price from all 3 renewing operators back in 1996 and same price per MHz for additional spectrum in 2008, now why suddenly this “brilliant idea” ?

I have no doubt in mind that its a bad decision and there may be consequences.
Abdul Halik
June 8, 2011, 8:56 am
@Aslam, You are correct if it is only B. But what about T and S? Are they too equal?

I do not comment on the fees. Whether the fees should be on utilisation or not is a different question. (or assumed future utilisation) But use of utilisation, as far as I see, is not illogical.
Rohan Samarajiva
June 8, 2011, 4:42 pm
I hope Mr Halik will expand on his abbreviations of B, T, and S. Otherwise it is difficult to respond.