Implementation of SMP guidelines stressed to attarct investment in telecom sector

Industry experts have stressed the urgent need for the effective implementation of Significant Market Power (SMP) guidelines to attract foreign direct investment (FDI) in the Telecommunication sector.

They opined that urgent implementation of SMP guidelines would foster fair competition and would ensure stability in the sector.

Proper enforcement of the SMP framework could rescue smaller operators, encourage infrastructure sharing, and attract foreign direct investment (FDI), which are crucial for the sector's growth, they added.

The experts said this while speaking at a roundtable discussion organised by the Telecom Reporters Network Bangladesh (TRNB) on Tuesday.

Presided over by TRNB President Samir Kumar Dey, the event featured a keynote presentation by TRNB Organising Secretary Al Amin Dewan, who highlighted the diminishing competitiveness among Mobile Network Operators (MNOs).

He said that that the dominance of a single operator has persisted despite the introduction of SMP guidelines over four years ago, causing operators to exit the market and investments to decline.

The speakers noted that despite sustained investments by MNOs, the average revenue per user (ARPU) has dropped from USD 3 in 2009 to just USD 1.3 in recent years.

Mentioning about some challenges, they said: "This decline, combined with rising tax burdens, has stunted the sector's growth. With the inflation rate now at 11 percent, the telecom sector's revenue has fallen to 4.4 per cent in 2024, down from 6.39 per cent in 2020. Over the past five years, the sector's revenue has halved, reflecting an increasingly precarious situation."

They observed that these challenges occurred due to the weak implementation of existing SMP regulations.

They stated that the dominant operator controls over 90 per cent of profit market share, nearly 50 per cent of revenue market share, and half of the shareable infrastructure, which it is reluctant to share. This has discouraged new investments and driven smaller operators out of the market.

They also noted that while SMP guidelines were introduced in 2018, key provisions such as annual reviews mandated under Section 7(11) have been neglected, rendering the guidelines ineffective.

BTRC Chairman Emdad Ul Bari, also a retired major general, highlighted the need for industry collaboration.

He acknowledged that the regulator lacks the autonomy to act independently and is constrained by the need for government approval. He also identified inconsistent regulatory changes as a significant issue.

"The telecom sector must focus on empowering subscribers. For the sake of services, businesses will be supported. Let us all work together for the national progress," he said.

Former Competition Commission Director Md. Khaled Abu Naser emphasised the importance of strengthening the Commission, noting its lack of coordination with the BTRC has contributed to the creation of an oligopoly that has destabilised investments in the sector.

TIM Nurul Kabir, executive director and CEO of the Foreign Chamber of Commerce and Industry, proposed establishing a Research and Development Wing within the BTRC to ensure informed decision-making and consistent regulatory frameworks to attract foreign investments.

Retired Lt. Col. Md. Zulfikar, secretary general of AMTOB, called for comprehensive sectoral regulation to promote a competitive environment.

Shahedul Alam, head of corporate affairs at Robi, slammed the lack of competition in the sector, blaming regulatory practices that favour large operators.

Banglalink's Head of Corporate Affairs Taimur Rahman urged the acceleration of infrastructure sharing among operators through legislative mandates.

Teletalk MD Nurul Mabud Chowdhury described the severity of unfair competition, which he said has left Teletalk struggling to survive.

Supreme Court Advocate Barrister Rashna Imam stressed the importance of enforcing SMP guidelines to establish fair competition. She noted that only three of the 20 clauses in the guidelines have been implemented, with minimal impact on addressing market inequalities.