Banglalink's application for ISP license raises concerns about future of local ISP sector

Banglalink has applied to the BTRC (Bangladesh Telecommunication Regulatory Commission) for an ISP (Internet Service Provider) license. Recently, the operator's Managing Director and CEO, Erik Aas, made this application. Banglalink authorities have stated that they wish to undertake this in a partnership model.

In the application, CEO Erik Aas stated, "Due to Bangladesh's ISP licensing regulations, mobile network operators are prohibited from obtaining an ISP license, which is hindering the optimal use of telecommunication infrastructure and creating obstacles in providing world-class high-speed internet services." He further mentioned that if this restriction is lifted, innovation, investment, competition, and sustainable development in the industry will increase.

He also pledged to follow the regulations and emphasized his commitment to making every effort to build an innovative ecosystem in the telecommunications sector.

For a long time, mobile phone operators have been demanding an expansion of their license scope. They argue that many services cannot be provided within the current limited framework. The operators want to offer all types of telecom services under their unified license, particularly claiming the right to provide last-mile services in the ISP sector.

In Bangladesh, telecom operators generally provide mobile internet services, while internet service providers (ISPs) offer broadband services.

Due to slow internet speeds, high prices, limited data, and the lack of unlimited packages offered by mobile operators, customers are increasingly turning to broadband internet. While the number of mobile internet users has decreased in recent months, the number of ISP and PSTN users has risen. Broadband is gaining popularity due to its low cost, high-speed connection, unlimited packages, and the option to choose speed according to user needs.

However, broadband coverage is still insufficient in most areas of the country. While its expansion has increased in major cities, the service remains limited in district and rural areas.

At the beginning of 2024, the Bangladesh Telecommunication Regulatory Commission (BTRC) allowed mobile phone operators to launch Fixed Wireless Access (FWA) services under the Cellular Mobile Service guidelines. Following this, three private mobile network operators in the country started offering FWA services, initiating competition in the broadband market. Through FWA services, customers can be provided with Wi-Fi connections without the need for a landline.

In fact, legitimate broadband internet service providers (ISPs) are struggling against the dominance of illegal operators. Despite paying regular taxes, they are finding it difficult to sustain their businesses. On the other hand, unlicensed illegal operators are running their businesses smoothly while evading government revenue, amounting to millions of taka. Currently, the number of illegal operators in the country is around 30,000.

In this context, ISP operators fear that allowing mobile operators to enter the ISP business will make it difficult for small and medium-sized entrepreneurs to survive. According to them, the vast capital and monopolistic market control of mobile operators would put the local ISP industry in crisis, which could be detrimental to both the technology sector and the economy in the long run.

According to experts, this initiative by mobile operators will create intense competition in Bangladesh's broadband internet market, which has been built over nearly 25 years and is valued at around 8,000 crore taka. The competition will not only increase among operators but also between network providers and broadband operators.

The President of the Internet Service Providers Association of Bangladesh (ISPAB), Imdadul Haque, expressed his concerns to Views Bangladesh, stating that such a move will have a severe impact. He mentioned that nearly 650,000 employees work in this sector, and there is a significant amount of investment. All the companies in this sector are local, and not a single taka is sent abroad. The money stays within the country, and reinvestment happens here. He believes that such a step would go against the government’s vitality and promises. He hopes that the government will reconsider this decision.

Expressing deep concern, he stated, "On behalf of the Internet Service Providers Association of Bangladesh (ISPAB), we express our profound concerns regarding the interest shown by mobile operator Banglalink in obtaining an ISP license."

He further said, "Currently, there are more than 2,700 ISP companies providing internet services at the local level in the country and creating employment for hundreds of thousands of people. If mobile operators are granted ISP licenses, the following negative impacts may occur:"

1. Monopolistic Market Creation: Mobile operators, with their high investments, will create an uneven competition with local ISP companies, which will facilitate their monopolistic control over the market. As a result, customers will be forced to purchase their desired services at higher prices from a monopolized market.

2. Crisis for the Survival of Local ISP Companies: No local ISP company will be able to compete with mobile operators, leading to a significant reduction in employment opportunities in this sector. An example of this can be seen in India, where Reliance offered a one-year free plan to eliminate local ISP companies. As a result, nearly all small to large ISPs in India were forced to shut down their businesses within a year.

3. Control and Increase of Service Prices: Due to current market competition, internet service prices are among the lowest in the world. If mobile operators establish a monopolistic control, the price of internet services will rise in the future, and the general public will be deprived of affordable, high-speed internet services like they currently enjoy.

4. Negative Impact on Local Investment and Entrepreneurial Development: The ISP sector is a promising field in Bangladesh. Local investors have been consistently working in this sector. If mobile operators are granted ISP licenses, the interest of local investors will diminish.

5. Potential Decline in Service Quality: Mobile operators are already providing mobile broadband services, where they often struggle to ensure high-quality service. If they are granted ISP licenses, it could lead to a general decline in the quality of internet services.

According to Bangladesh's telecommunications policy, mobile operators are primarily permitted to provide mobile connectivity and related services. Granting them ISP licenses would be contrary to the existing laws and regulations.

Therefore, we urge the BTRC to take appropriate measures to prevent the granting of ISP licenses to mobile operators and to implement effective actions to protect the interests of local ISP companies.