Regulator asks ISPs to cut internet prices

The telecom regulator recently directed internet service providers, including mobile phone and WiMax operators, to reduce the cost of internet for end-users.

Bangladesh Telecommunication Regulatory Commission, in a letter to all operators, said the government has reduced the cost of raw materials of different internet products and the end-users should be benefitted by it.

The telecom regulator also wants feedback from the operators on the steps they took to reduce internet prices.

Operators said they have already cut prices at the end-users' level and increased speed as well.

Analysts said this kind of a letter from the telecom watchdog shows that they have no control over the market.

BTRC officials said they do not have any cost model for internet pricing, nor any tool to determine what the actual price should be.

A few years back, BTRC conducted a cost modelling study on the voice call segment, which determined the upper and lower levels of prices. However, BTRC never took any initiative on internet pricing, said a senior official of the regulator.

The government reduced bandwidth prices, which is only 6 percent of their total operational costs, according to Internet Service Providers Association Bangladesh (ISPAB).

About 35 percent of their expenses go to the two NTTN (Nationwide Telecommunication Transmission Network) operators, even though they cannot provide full network support. Also, 30 percent of expenses go to staff salaries, 22 percent to revenue sharing at different layers, including the government, and 7 percent goes for office space and other payments, they added.

“Without cutting NTTN charges, end-users' costs will not be impacted,” MA Hakim, president of ISPAB, said in a letter to the regulator.

To get optimum benefits, the government should withdraw VAT and other taxes and stop taking a share of the revenue from it, the letter added.

The NTTN charge that was fixed in 2009 has never been revised, Hakim said, when contacted.

As of May, there are 6.33 crore active internet connections in the country, according to a report by the telecom regulator.

Internet service providers gave only 33.7 lakh internet connections at the household level, although they consume a huge volume of internet bandwidth, around 50 percent.

The number of active WiMax connections stands at 1.18 lakh as of May, and it is declining every month.