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3 g services in bangladesh

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3 g services in bangladesh

  1. 1. 3G Services in Bangladesh : Challengesand regulatory recommendationsMd.Iftakharul Islam, Telecom & Regulatory ExpertEmail :rusho.bss@gmail .comINTRODUCTION:The Telecommunication sector in Bangladesh, specially the mobile sector, has showntremendous growth in last decade. The access to internet services is to some extend drivenby the mobile operators. However, broadband services in particular have so far been verylimitedly driver by to few Wi-Max operators and recently government owned operator“Teletalk”. In line with the “Digital Bangladesh Vision” we understand that Governmentwants to build an empowered information society, where everyone would be able to createaccess, utilize and share information and knowledge easily and efficiently. Broadband canimprove the efficiency, availability, and reach of public and private sector ICT services inareas of health, education and other socio economic areas.The recent publication of 3G licensing framework is one promising step. The ICT industry iseagerly waiting for the commercial launch of 3G/UMTS based services by the privatetelecom operators which can surely demonstrate the strongest growth rates, the largestvolumes – and hence probably the lowest prices of both network equipment and terminals.However as a part of the telecom industry, I would like to request the Government and theregulators to kindly access the below concern which need to be addressed before we issuethe 3G License :CHALLENGES OF 3G DEPLOYMENT :The deployment of broadband infrastructure and services in Bangladesh faces a range ofchallenges:While increased broadband penetration is an important factor in strengthening theeconomic development, the present socio economic condition (i.e. per capitaincome) of the people doesn’t assure good business case for broadband networkdeployment.Ubiquity of broadband services drives demand for and hence development ofcontent, application and vice versa. The low penetration of PCs, Laptops, lack ofBangla language supported application, low penetration of 3G enable handset and
  2. 2. unfamiliarity with the English language create challenges in terms of securing thedevelopment of local content and access to international content.The lack of competition in terms of international broadband connectivity leads tovery high cost of international IP traffic, in a global as well as in a South Asiaperspective.Transmission is a critical factor for 3G deployment. However, considering regulatoryobligation mobile operators will be solely dependent on NTTN operators in terms ofensuring last mile connectivity for providing quality services to their customers. Butthis will result in very high OPEX and slow deployment.3G FROM INVESTOR’S PERSPECTIVEWith such a risk profile, funding of a 3G license and associated network deployment inBangladesh is likely to be challenging, in particular taking into account the recent highvolatility of financial markets.This challenge will apply not only with regard to the licensee itself, but also with regard toany external funding sources. From those points of view, it’s extremely important thatgovernment contributes in limiting the total level of uncertainty through minimizing theregulatory uncertainty. This will eventually help to:Facilitate – and maybe reduce cost of - funding for license fee and networkdeploymentThrough the facilitation of funding provide for increased coverage, capacity andqualityIncrease the value – and hence the attractiveness - of the license.The mobile sector is clearly a high-profile industry in terms of Foreign DirectInvestment in Bangladesh. A predictable regulatory regime for this sector willcontribute positively on the overall assessment of business environment inBangladesh.With regard to the licensing guidelines for 3G, there are in industry view three areas wherelong-term predictability and stability is of particular importance:SOME RECOMMENDATION & SUGGESTIONS FROM REGULATORY POINT OFVIEW :
  3. 3. - Spectrum Price :3G Spectrum pricing should be kept in such a level that secure the properbalance between granting access to reduce entry barriers, and facilitating new andprotecting existing investments.- Price regulation :Needless to say, the financial risks associated with network constructionare significantly higher if there is a price regulation. This risk increases further if there is arisk of such regulation without any indication on how this price regulation may be designed.- Amount Spectrum allocation for 3G : It is very positive to see that BTRC has reserved asmuch spectrum as possible (at least 50 MHz) for commercial use. Reduced spectrumavailability increases network roll-out costs, making some geographical parts of Bangladeshunattractive for 3G-roll out, and some capacity demanding services unviable. This reducesthe benefits for the Bangladeshi society compared to a situation where spectrum is notartificially scarce.- Number of licensee :Restricting the number of available licenses compared to themaximum that could be achieved given spectrum availability over a longer timeframe willnot in general bring advantages to the country. A large number of licenses would supportincreased competition and increase the likelihood that 3G networks are actuallyestablished. More licenses would as well lead to better services and lower prices towardsthe market- Modification of License terms and conditions :As any modification of license fees,spectrum fees and revenue sharing may have a significant impact on the business case ofany 3G licensee, BTRC shall not exercise the power given in BTA to bring about anychanges in license fees, spectrum fees and revenue sharing etc.- Technology Neutrality : Int’l regulators are acknowledging that spectrum allocations shouldbe made on a technology neutral basis and spectrum refarming is international bestpractice (i.e. allowing 3G on 800/900/1800MHz)- New entrants :The Bangladesh market is competitive already and the market can likely notsustain new entrants – in any case there is likely to be no viable business case for new 3Gonly entrants in the Bangladesh market- Tariff Approval : In particular with the wide range of services which must be expected toflourish when the 3G market develops in Bangladesh, tariff approval for each and everyservice is probably not feasible. Rather, any service provider should have a clearrequirement to make tariff information easily available at time of entering into anagreement, and updated tariff information should be readily available at any time, e.g. on aweb site. Also, all marketing of services should contain clear information on tariff.
  4. 4. - Access sharing :There are quite a few markets where also companies who don’t have their own, completemobile network infrastructure, are allowed to offer mobile services to end customersthrough utilizing the capacity of the mobile network operators. There are three maincategories of such access arrangements:o Mobile Virtual Network Operator (MVNO)o Simple Resaleo National RoamingIndustry and regulators clearly acknowledges that there are several advantages of reducedentry barriers facilitated through MVNO, resale and national roaming.