Transcript Telecom Regulatory Environment in “Digital Bangladesh”: Exploring the Reasons behind Poor Sector Specific Performance CPRSouth 6, Bangkok, Thailand December, 2011 Faheem Husain (faheem.hussain[at]gmail.com) This work was carried.

Telecom Regulatory Environment in “Digital
Bangladesh”: Exploring the Reasons behind
Poor Sector Specific Performance
CPRSouth 6, Bangkok, Thailand
December, 2011
Faheem Husain
(faheem.hussain[at]gmail.com)
This work was carried out with the aid of a grant from the International Development
Research Centre, Canada and the Department for International Development, UK.
Digital Bangladesh and the Telecom Industry
Fixed
Internet
Mobile
Internet
Internet Subscribers in Bangladesh
Market Shares (based on SIMs) in the Mobile Sector
Telecom Sector as % of Total Tax Revenue
Analytical Framework
Average TRE Scores
• This study used perceptions of
key stakeholders (e.g., operators,
legal experts, civil society, etc.)
– to evaluate the effectiveness of
the regulatory and policy
environment in three telecom
subsectors (fixed, mobile, and
broadband) along seven
dimensions
5.0
TRE Scores by Regulatory Dimensions
4.5
4.0
3.5
3.1
3.0
2.7
2.7
2.5
2.5
2.3
2.4
2.2
2.0
1.5
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1.0
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• The average TRE score for all
three telecom sectors across the
seven regulatory dimensions
turns out to be 2.6, which is
below the satisfactory level of 3
Key Findings
• Good Interconnection Enabled Better Telecom Diffusion
– Extensive competition facilitated better customer service
– Availability of effective telecom network all over Bangladesh
Growth of SIM/Access Paths in Bangladesh
Key Findings
• Uncertainty in Policy Formulation and Implementation
– High renewal fees for spectrum allocation and mobile phone
operating licenses
• stalled rollout of 3G
– Arbitrarily calculated Market Contribution Factor creating
disincentives for the stakeholders to grow
– State incumbent’s monopoly over Bangladesh’s submarine
cable landing station made access to infrastructure costly
Key Findings
• Failure in Developing an Effective Regulatory Framework
– Rolling back regulatory liberalization- significantly curtailed
the power for the Regulator
• Telecommunication Act of 2010
• Provisions for heavy fine and punishments
– Stagnant market place with ministry at the helm; long delay
and bureaucratic red-tapes on tariff decisions
• Failed to cope up with the dynamic telephony market
• Unregulated broadband pricing
Key Findings
• Absence of Long Term Planning
– Incoherency between Telecom Policies and “Digital
Bangladesh” vision
Key Findings
• Absence of Long Term Planning
– Anti-competitive practices in VAS market
• Disputes with revenue sharing, intellectual property rights
– Lack of QoS guidelines
• BTRC is yet to publicize its documents
• QoS is somewhat balanced in Mobile Phone Industry due to
competition
• As shown in LIRNEasia studies, broadband operators are failing to keep
the promises on QoS*
– No clear definition of “Bangladeshi” Universal Service
• Do we need it?
• How does the funding get disbursed?
* Broadband Quality of Service Experience (QoSE) Indicators, 2009, LIRNEasia
Recommendations
• Pro-market 3G Licensing
– Present private operators should be allowed to have
transition from 2G to 3G services
– Provisions for Refarming
• the incumbents can be required to pay a certain amount of
spectrum utilization fee, consistent with that for the new 3G
licensees*
• Ensuring Prompt Tariff Regulations
– MoPT needs to transfer back the responsibility of Tariff
regulation to BTRC
– For broadband sector, price ceilings/floors should be set
* Guermazi, B., & Neto, I. (2005). Mobile License Renewal: What Are the Issues? What is at Stake?
The World Bank
Recommendations
• Acting against Anti-Competitive Practices
– Clear directives on abuse of dominance, cross
subsidization, predatory pricing, bundling, and related
practices*
• Active implementation of the infrastructure sharing guidelines to
prevent non-tariff barriers for the market entrants in voice,
internet, and VAS sectors
– Broadband operators should be allowed to negotiate with
the international carriers to reduce bandwidth pricing and
for efficient internet traffic management
* Monson, C., Banarjee, A., Briceño, A., Ros, A., Tardiff, T., McKinley, A., Kalba, K., & Frieden, R.
(2007). ICT Regulation Toolkit. NERA Economic Consulting
Recommendations
• Clarity in Guidelines for USO and SOF
– Bangladesh can follow Pakistan’s example to include
private participation in the governance of SOF*
• It helps to expedite the decision making process of identifying
potential projects and fund disbursement**
• Should focus on developing local content and broadband network
• Effective QoS Obligations
– BTRC needs to share its guidelines of QoS for voice and
data services, and facilitate inclusive consultation
• Specific focus on “Broadband” services
* Guermazi, B., & Neto, I. (2005). Mobile License Renewal: What Are the Issues? What is at Stake?
The World Bank
** Sambandaraksa, D. (2010). All of Pakistan to have fibre access. The Bangkok Post.
Acknowledgements
• LIRNEasia, IDRC, DFID
• Helani Galpaya, Aslam Hayat, Sriganesh Loknathan,
Abu Saeed Khan, Rohan Samarajiva
Thank You!