IGW cartel proposal goes to Hasina
The telecom ministry has recently sent to Prime Minister Sheikh Hasina the proposal of a group of international gateways (IGWs) for installing a "common switch" meant for controlling the entire cache of overseas calls.
IGW Operators Forum, comprising 17 gateways of the total 29 in the market, plans to introduce the system.
The switch will be led by seven gateways and may allow for a murky window for collecting unspecified fees, said operators who did not join the forum. They also said the switch may go against the competition law, contract law and long distance telecom policy.
A forum leader, however, denied the allegation.
The IGWs transmit international calls to operators through interconnection exchanges connected with other gateways.
The proposal was sent to the prime minister as she is now the in-charge of the ministry following former minister Abdul Latif Siddique's removal from cabinet over his comments on hajj and Prophet Muhammad (pbuh).
The forum is actually an agreement among the gateways and the government should not directly be involved in the pact, the ministry told the premier in a letter.
As the telecom regulator has been involved in the process, it will ensure that nothing goes against the law or rules, the letter said.
Md Faizur Rahman Chowdhury, telecom secretary, recently told The Daily Star that they are now examining the proposal.
Initially Bangladesh Telecommunication Regulatory Commission (BTRC) was against the proposal of forming the cartel, but later they got involved when some of the conditions in the proposal were changed.
After a couple of meetings with the gateways, the telecom regulator sent the proposal to the telecom ministry for approval. It also proposed amendment to some clauses of the telecom policy and relevant guideline to pave the way for the common switch.
However, a ministry official, asking not to be named, said the idea of forming the cartel goes against all legal framework of the government.
will transmit international incoming calls to telecom operators through interconnection exchanges, while tier 1 will only send its entire calls to tier 2, according to the proposal. The regulator has also selected seven IGWs who will receive the majority share of the income.
The system would create a revenue-sharing model that distributes almost twice (1.9:1) the revenue to the tier 2 gateways compared to that in the tier 1.
The proposal also said each member gateway will contribute a certain amount to the forum as “market development expenses” for the purpose of increasing the number of international incoming and outgoing calls through legal channels.
The forum will also control the incoming and outgoing calls of the member gateways if they fail to provide the revenue to the government.
The proposal will lead to an uneven playing field as it has two tiers, said the ministry official. Two or more parties cannot go for a contract if any of it wants to control the other, so the system is not viable, he said.
BTRC Chairman Sunil Kanti Bose said, if the model is introduced, it will be easier for them to monitor the IGW operators.
But he said the government will have to bring changes to international long distance telecom policy to let the system come up.
About the financial issues, Bose said, “The regulator will audit the forum's financial matters.”
Last month a group of entrepreneurs from the IGW sector wrote to the prime minister to save the sector from syndication. They said it is compliance, not a new model, which can bring stability to the sector.
However, AKM Shamsuddoha, chairman of IGW Operators Forum, said, “We are not forming any cartel. Such business models are now working globally.”
"We do not set the overseas call rates, operators abroad do it.” A process has been initiated to save the sector so that everyone's revenue is ensured, he said. "Nothing illegal is happening."
Tanjib Alam & Associates, a law firm that deals with telecom issues, said, as the tier 1 IGWs will no longer transmit calls, they will not feel the need to invest further, reducing overall investment and leading to violation of the Competition Act.
"The BTRC is desperate to cover up its failure in recovering the dues from defaulted IGWs by promoting a syndicate, which is utterly illegal," said LIRNEasia's Senior Policy Fellow Abu Saeed Khan. He questioned the regulator's bid to introduce a "caste system" in the name of tier 1 and tier 2 IGWs.
"While the prime minister is temporarily fostering the telecom ministry, her office should probe why BTRC is so enthusiastically pushing the model of a cartel that has been proven disastrous in Pakistan," Khan said.
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