What could be the impact on telecommunication sector?

Bangladesh Telecommunication Regulatory Commission (BTRC) has taken the initiative to bring changes to the International Long Distance Telecommunications Services (ILDTS) policy, which was introduced 15 years ago. This move must be welcomed as the sector has undergone drastic technological transformation in the last 15 years. The entire landscape of telecommunications has changed fundamentally.

Back then, international voice calls were exchanged through clear channels. Now, OTT (Over-The-Top) app-based calls have taken over. With just an internet connection, people can easily make app-to-app ID calls from anywhere in the world. It's not only international call exchanges—overall, the dominance of clear-channel voice calls is diminishing in telecommunications. Anyone with a smartphone typically uses some OTT application for making calls rather than making direct phone calls. Even for direct voice calls on 4G networks, VoLTE (Voice over LTE) technology is used, which delivers voice services through a data terminal. On top of that, an even more advanced technology—VoWiFi (Voice over WiFi)—is rapidly gaining popularity in mobile telecom services, and it's entirely internet-dependent.

Therefore, it is undeniably necessary to revise the ILDTS policy, which was originally formulated to prevent revenue loss from illegal VoIP use in clear-channel international call exchanges.

However, such policy reform must be approached with extreme caution. If the change is driven by the intent to serve the commercial interest of a particular group, rather than aligning with the evolving realities and future challenges, it could create more complex problems instead of offering solutions.

Now, let’s look at the draft titled “Telecommunication Network and Licensing Regime Reform 2025.” While the ILDTS policy was primarily introduced to ensure government revenue from international calls, it also inadvertently established a value chain in the telecommunications service structure and led to a licensing framework at each level of this chain. This made ILDTS the fundamental policy basis for issuing licenses by BTRC. The new draft’s title reflects this context, clearly indicating a shift from the existing licensing regime to a new chapter—suggesting a progressive and seemingly transparent outlook.

The draft proposes to simplify the regime into three tiers: Access Network Service Provider (ANSP), National Infrastructure and Connectivity Service Provider (NICSP), and International Connectivity Service Provider (ICSP).

The first tier includes three categories of licenses: Cellular Mobile Service License, Fixed Telecom Service License, and Satellite or NGSO (Non-Geostationary Orbit).

The third category is completely new. During these 15 years, Bangladesh launched its own communications satellite, which can be used to provide internet services. Moreover, the widely known U.S.-based company Starlink has already been permitted to provide satellite-based internet in Bangladesh. So, adding this category to the licensing structure was necessary.

Under this category, two additional subcategories of service providers have been proposed under a registration system: Small ISP Services, and Small Telecom Services.

The “Small ISP Services” subcategory raises questions. According to the draft, service providers under this subcategory will be allowed to provide fixed broadband services at the Upazila or Thana level. These small ISPs must procure internet bandwidth from ICSP license holders or those licensed for fixed broadband services.

But here’s the concern: delivering high-quality and secure internet service is not something that can realistically be managed as a “small business.” Providing quality internet requires substantial investment in bandwidth and operational infrastructure. For example, an ideal ISP should offer 24/7 customer support. To ensure safe and secure services, proper security infrastructure and skilled personnel are necessary. Can a small-scale investor afford these requirements?

Already, local ISP businesses, especially at the neighborhood level are often under the control of political strongmen. Therefore, issuing licenses to “Small ISPs” could further disrupt last-mile internet services and increase the risk of mismanagement and disorder.

Moreover, the draft also proposes allowing mobile operators to offer fixed broadband services to enterprise customers. If this provision is finalized, local ISPs with domestic investment could face severe business threats. In urban areas, corporate or enterprise bandwidth markets will almost certainly be dominated by mobile operators. If small ISPs end up buying bandwidth from these mobile operators as “small enterprises,” national ISPs will face an existential crisis.

Therefore, the draft should be amended to entirely prevent mobile operators from entering the fixed broadband market. Mobile operators already have their cellular networks and are permitted to provide internet services to both individuals and institutions via that network. High-speed broadband services over wireless technologies and compatible devices are now widely accessible. In this context, there is no justifiable reason to create loopholes that allow mobile operators to enter the fixed broadband space.

There may be an argument that just as fixed broadband is an opportunity for mobile operators, cellular service should similarly be open to ISPs. However, in this draft, only the mobile operator license category has been classified as a “limited license type,” while all other categories have been labeled as “open licensing type.” The reason for singling out one category as “limited” has not been clarified. As a result, obtaining a cellular license will not be easy or open to all.

In reality, ISPs do not possess the massive investment capacity required to build and manage cellular networks and services. Therefore, such a proposal does not offer a practical solution. The more logical approach would be to not allow mobile operators to provide fixed broadband services via cable.

There’s also a new technological dimension to consider. ISPs are now allowed to set up CDN (Content Delivery Network) cache servers, which is a positive step. This opportunity is available even to listed small ISPs. Consequently, in line with the idea of “a server at the ring ball or right in front of the customer’s home,” mobile operators can use these small ISPs to establish and control CDN cache servers in every upazila. Since the mobile operators would be investing in setting up these cache servers through the small ISPs, nationwide ISPs may find their content delivery businesses effectively shut down. This would result in mobile operators monopolizing both the corporate internet bandwidth and content delivery markets.

If this draft is implemented, nationwide ISPs will face a significant existential crisis. Another important issue is that three years ago, the ISP policy was revised to replace the A, B, and C categories with licenses at the nationwide, divisional, district, and upzila levels. Now, only the nationwide license category remains, while upzila small ISPs will be listed but not licensed. Divisional and district licenses are being scrapped. While removing these categories might be acceptable, what happens to those who already invested, albeit modestly, in these licenses?

Furthermore, the listed small ISPs will be weakened by the lack of proper licensing. No bank will be willing to lend them even 100,000 BDT. As a result, these listed entities may fall under the control of either nationwide ISPs or mobile operators, and given the significantly greater capabilities of mobile operators, it’s likely they will dominate.

The draft policy proposes to deregulate services such as TVAS, call centers and vehicle tracking, which is a positive move. From professional experience, I have seen unethical practices around TVAS service listings for years. Some BTRC officials were involved in these unethical activities centered around enlistment. A proper investigation would easily reveal their identities. Thus, deregulating these categories is both courageous and commendable.

However, allowing enlistment-based operations for small ISPs and small telecom service providers (e.g., VSAT, SMS aggregation) opens the door again to run old irregularities and corruption. If small ISPs and telecom services must be included, they should fall under proper licensing, not just enlistment . If deemed unnecessary, they should be eliminated. Listed entities do not share revenue with the government, and this loophole may lead licensed companies to evade revenue-sharing obligations under the guise of enlistment. Therefore, maintaining opportunities for irregularities and corruption through enlistment is not justifiable.

The draft also proposes allowing foreign investors to hold up to 70% ownership in the NICSP category, while only 49% is permitted in the ICSP category, without any explanation. Moreover, it mentions that foreign investors may own stakes across different categories without restrictions. This inconsistency is confusing and raises suspicion. Why 70% in one category and 49% in another? One could assume that a certain NICSP company already has 70% foreign ownership and perhaps also holds significant stakes in ANSP license holders—this might explain the questionable provision.
According to the draft, NSP operators may lease both capacity and dark fiber from NICSP license holders. Previously, mobile operators were allowed to purchase DWDM equipment. Since dark fiber is essentially “dark” without DWDM, enabling dark fiber leasing implies DWDM use must be allowed too. If this draft policy is enacted, mobile operators will effectively become alternate transmission service providers, severely limiting the business opportunities for existing NTTN providers. As a result, the need for a separate license for building a common transmission network may become largely irrelevant.

In summary, this proposed policy is likely to lead to a monopolistic hold over the telecom sector by foreign-owned companies, especially mobile operators. Nationwide ISPs and transmission service providers may become commercially irrelevant. Mobile operators already receive the most policy support in the country. For example, they can invest by taking loans from local banks. As a result, they do not have to bear the responsibility of not bringing any FDI in a decade. However, the regulatory body can adopt a policy of reducing the price of radio spectrum allocation for mobile operators. The big problem for them is the high tax burden. Therefore, BTRC can also play a role in reducing the tax burden from the shoulders of mobile operators in the tax policy.The telecom regulator should offer necessary but not excessive policy support to mobile operators.
The draft also proposes eliminating IGW, IIG, ICX, and NIX categories—all of which are locally funded enterprises. While it mentions compensating these businesses for their losses, it fails to outline how such compensation will be handled. Additionally, although future policies for data centers and CDNs are hinted at, the draft should have included a clearer roadmap. Given future challenges, there is no alternative to establishing top-tier, locally owned data centers.

Rased Mehedi: Telecommunications and Information Technology Analyst