Internet package should be calculated in simple math

We are living in a time when the internet has become an indispensable part of people's daily lives. I have observed that even at street corners or roadside tea stalls, individuals are engrossed in their smartphones, watching YouTube or TikTok video, which means they are using the internet.

The rich are always busy keeping track of their huge income and do not have time to think about what is being spent in the family. However, in this expensive market, those who struggle to make ends meet, and whose dishes are chipped, have to meticulously budget their expenses, particularly for their daily meals. They must determine how much money to allocate to each category, and they do this at the beginning of each month.

When there is an allocation for internet in these people's accounts, it can be understood that they are not spending for internet as a hobby. They certainly have a genuine need for internet usage. Whether it's to stay in touch with relatives living abroad through messaging apps or making calls, or to seek a moment's entertainment through social media, their internet usage is primarily focused on meaningful communication and finding a brief escape from the challenges of their daily lives.

Unfortunately, these low-income individuals are the ones who bear the brunt of various forms of exploitation in the market. They are the ones who are hit the hardest by indirect taxes. When buying any kind of product in the market, they have to pay value-added tax (VAT). Even when using mobile internet, since July 1, 2022, they have been subject to a 15% VAT rate.

In the 2018-19 budget, the rate of VAT on mobile internet usage was fixed at 5 percent. The picture changed in 2022 after the Covid-19 pandemic. The budget for the fiscal year 2022-23 imposes a number of complex conditions, as a result of which mobile operators collect VAT at the rate of 5 percent and no longer have the opportunity to get rebates on the VAT they pay in tiers to buy bandwidth. Therefore, the operators go to the path of VAT collection at the rate of 15 percent, instead of the complicated conditions of the law, in order to be within the benefit of the rebates. Because according to the terms of the VAT Act, if the VAT is collected below 15 percent, the mobile operators will not get the concessional benefit or rebates.  

In other words, mobile operators have opted for simple calculation to comply with VAT laws. But choosing the internet package for the customers is a complex issue. According to BTRC data, mobile operators have 95 types of packages. Mobile operators said that the more packages they offer, the more choices consumers have. But in reality, 95 packages means walking into a maze of nearly a hundred doors! It is also a complicated calculation to keep in mind which of these is three days, which is 7 days, which is 15 days, which is 30 days.

Customers get stuck in this kind of complications. For instance, someone might see a package from one operator offering 14 gigabytes of data for 118 Taka and make a purchase. However, after using 4 gigabytes within three days, they find out that their data is gone. Perhaps, at that point, they realize that the package was actually intended for three days, and any unused data does not carry over to the next package.

Alternatively, in another operator's case, they may have purchased a 1-gigabyte internet package for 97 Taka, which is valid for three days. However, they run out of data even before their favorite music video on YouTube ends within just 10 minutes. They have used up an entire gigabyte of data, leaving them frustrated, and with no recourse but to purchase another 1 gigabyte for 97 Taka. This leads customers to consume their entire package in a single day. In this way, customers have been tricked into buying additional packages day after day after the original package's expiration. This is why three-day packages were like a goldmine for mobile operators.

The study done by BTRC was much later, the operators did it some years back. According to that study, three-day package users are more. This isn't surprising, as these packages offer more data for a lower price, making them particularly attractive to people with limited incomes and students. They didn't pay much attention to being deceived, as the cost of deception was relatively low. However, for many people, these three-day packages were more about business tactics than genuine benefits.

The business tactics become evident when comparing the pricing of mobile data packages offered by the same operator. For example, one mobile operator offers a one-gigabyte data package for 97 Taka in a three-day package. On the other hand, the same operator offers a 22-gigabyte data package with a 30-day validity for 499 Taka. Here, the cost per gigabyte drops to 22 Taka.

Now, for individuals with limited income who purchase one gigabyte for 97 Taka, if they buy such a package five times a month, they would end up spending 485 Taka for 5 gigabytes, which is almost the same as the 22-gigabyte package priced at 499 Taka. This clearly illustrates the clever pricing strategies employed by the operators to maximize their profits.

Another operator might say, "Brother, I'm offering 14 gigabytes of data for just 118 Taka with a three-day validity. Here, the cost per gigabyte is only 8 Taka." Customers might indeed think they are saving money by choosing this option"!

However, there is logic here too. Utilizing 14 gigabytes or 14,000 MB of data within a three-day period is not as straightforward as it might seem. If someone wants to exhaust it within three days, they would need to use a significant amount of data each day. On the other hand, if someone doesn't manage to consume all the data within three days, the operator benefits from the unused data because it can't be rolled over to a new package. So, in both cases, the operator wins.

If a customer uses only 4 gigabytes out of the 14 gigabytes allocated, the operator won't provide any opportunity to reclaim or roll over the unused data. However, if the customer uses more data, even if it gets exhausted within a day, they can purchase the same package again.

Suppose a customer decides to purchase the package 10 times in a month, each time paying 118 Taka. In that case, the operator earns 1,180 Taka from this customer in a month. Comparatively, if they were to provide a 140-gigabyte data package for 30 days at the same cost of 1,180 Taka, the likelihood of it going unsold would be high. So, in this way, the operator maximizes their revenue.

Finally, from today (October 15, 2023), that complication is ending to some extent because the telecom regulator BTRC has finally decided to stop the package for a period of 03 days and 15 days. This decision is effective from today. We welcome this decision of BTRC to stop cheating customers.

However, the mobile operators are not giving in so easily. They might find it challenging to accept BTRC's decision to discontinue the three-day packages, as these packages provided a quick way to make profits. They may try to uphold some cheap arguments in front of the people  that this decision (to close 03 days and 15 das pkg)  may not be in the best interest of the consumers.

Some may even question if removing three-day internet packages is like removing "mini pack shampoo" from the market. In this context, one might recall a moment from the novel "Lalsalu" by Syed Waliullah, where Abdul Majid, the protagonist, questions a young man who was advocating for building a school in the village. At that moment, Majid, who held the audience's attention, asked, "Where's your beard?" This indicates that in the eyes of the people present, the absence of a beard was more critical than establishing a school in the village!

Here, too, that could happen. Decision for closing  the three-day internet packages may spread a panic among "mini pack shampoo" sellers in the market. Aa a result,   The mini-pack shampoo sellers and the buyers could come together and make greater human chain in the street, in support of reversing the decision to end three-day internet packages. In such a scenario, it could be challenging for BTRC to withstand the pressure!

In fact, there is nothing complicated about internet packages. In the case of broadband internet service through cable, "one country, one rate"  has been fixed.   People are also getting the benefits of this. However, legitimate Internet Service Providers (ISPBs) say this is causing some business losses. Because its cost to transport bandwidth has not been implemented effectively until now. However, ISPs have accepted it.

These domestic businessmen are not dominated by the power of huge foreign investment like the mobile operators, but the legitimate ISPs in the capital itself have to be face unusual difficulties  by the political gangsters.  In this situation, all authorities close their eyes!

Mobile operators don't face the same complexity in their business. But they have to face the problem of setting up the BTS(base transceiver station). Some people, fearing the specter of radiation, prevented them from installing BTS. Because they don't have proper idea about radiation. They are frightened and agitated by some misinterpretation. And due to this, the desired network service is not ensured in different places due to the site not being installed properly. As a result, subscribers have to suffer for weak network.  Despite network vulnerabilities, mobile operators don't face the same level of problems. In fact, the issues primarily affect customers. Even though the network may have issues like dropped calls or unreliable internet usage, mobile operators still charge for their packages upfront.

This is why I'm saying that mobile internet packages should be straightforward and transparent. First and foremost, there should be a clear breakdown of what's included in the package, such as the amount of data volume in gigabytes (GB) that mobile operators provide in exchange for a particular bandwidth, and the corresponding cost. There must be a mathematical formula for this, which the regulatory authority, in this case, the Bangladesh Telecommunication Regulatory Commission (BTRC), should be aware of.

By determining the cost of selling 1 GB of data against the expenses related to the bandwidth's price and other operational costs, we can understand how reasonable the price of 1 GB of data for 97 Taka over a three-day period is.

Actually mobile operators buy bandwidth on a monthly basis. The data volume generated by using this bandwidth will also be calculated on a monthly basis. For this reason, the data package of fixed volume of three or seven days beyond the monthly calculation is the additional profit of the operators. I would definitely support the three day package, if its data volume is unlimited rather than fixed.

To me, the regulatory body should fix a price of one GB data package based on the amount of data volume generated in 60 seconds, 60 minutes, 24 hours and 30 days using one Gbps (1000 Mbps) bandwidth. All packages will be priced based on that one GB data. The operator will have no control over how many days I use up my purchased data at this fixed rate. 3 days, 7 days, 15 days, 30 days will not be valid. And if the period is specified then such volumes as 1 GB, 3 GB, 5 GB, 10 GB, 100 GB will not be specified. Data will be unlimited. In that case BTRC will fix the price of unlimited data usage for one day. On that account I will buy unlimited data for the period of how many days I want to buy.

The package system that mobile operators have now is very complicated. Low-income and general consumers are at high risk of being defrauded in such complex package arrangements. At least, kudos to the regulatory body, BTRC, for taking the initiative to simplify the existing complicated package equation by giving away the three-day package. However, if the price rate of each 1 GB data, or unlimited data usage rate for 1 day is determined, that will be the most effective calculation to protect the interests of both the common customers and operators.

Finally, the most important thing is to withdraw VAT from mobile internet usage. Fifteen percent VAT on internet usage of people of Bangladesh who are on the path of dream of Smart Bangladesh is a complete mockery.

 

Rased Mehedi, journalist