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3G license inBangladeshchallenges andregulatoryrecommendationsMd.Iftakharul Islam, Telecom &Regulatory Expertrusho.bss@gmail .com
Md.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 andunfamiliarity 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.
Md.Iftakharul Islam, Telecom & Regulatory ExpertEmail :rusho.bss@gmail .comTransmission 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:
Md.Iftakharul Islam, Telecom & Regulatory ExpertEmail :rusho.bss@gmail .comSOME RECOMMENDATION & SUGGESTIONS FROM REGULATORY POINT OFVIEW :- Spectrum Price :3G Spectrum pricing should be kept in such a level that secure the proper balance betweengranting access to reduce entry barriers, and facilitating new and protecting existinginvestments.- Price regulation :Needless to say, the financial risks associated with network construction are significantlyhigher if there is a price regulation. This risk increases further if there is a risk of suchregulation 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 as much spectrum as possible (at least 50MHz) for commercial use. Reduced spectrum availability increases network roll-out costs,making some geographical parts of Bangladesh unattractive for 3G-roll out, and somecapacity demanding services unviable. This reduces the benefits for the Bangladeshi societycompared to a situation where spectrum is not artificially scarce.- Number of licensee :Restricting the number of available licenses compared to the maximum that could beachieved given spectrum availability over a longer timeframe will not in general bringadvantages to the country. A large number of licenses would support increased competitionand increase the likelihood that 3G networks are actually established. More licenses wouldas well lead to better services and lower prices towards the market- Modification of License terms and conditions :As any modification of license fees, spectrum fees and revenue sharing may have asignificant impact on the business case of any 3G licensee, BTRC shall not exercise thepower given in BTA to bring about any changes in license fees, spectrum fees and revenuesharing etc.- Technology Neutrality :Int’l regulators are acknowledging that spectrum allocations should be made on atechnology neutral basis and spectrum refarming is international best practice (i.e. allowing3G on 800/900/1800MHz)
Md.Iftakharul Islam, Telecom & Regulatory ExpertEmail :rusho.bss@gmail .com- New entrants :The Bangladesh market is competitive already and the market can likely not sustain newentrants – in any case there is likely to be no viable business case for new 3G only entrantsin the Bangladesh market- Tariff Approval :In particular with the wide range of services which must be expected to flourish when the3G market develops in Bangladesh, tariff approval for each and every service is probably notfeasible. Rather, any service provider should have a clear requirement to make tariffinformation easily available at time of entering into an agreement, and updated tariffinformation should be readily available at any time, e.g. on a web site. Also, all marketing ofservices should contain clear information on tariff.- 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.