• Thursday, July 31, 2014

Private terrestrial cable operators demand floor for bandwidth prices

Abdullah Mamun

Private international terrestrial cable operators want the government to set a floor for wholesale bandwidth prices to help avoid unhealthy competition between private and public companies.
Bangladesh Submarine Cable Company Ltd, a state-owned operator, has recently announced its plans to slash the price of international bandwidth by as high as 60 percent for both voice and data transmission, which has affected the business of the private terrestrial cable operators.

Currently the ceiling is Tk 5,000 per Mbps for both private and public operators, but there is no lower limit.
Both Submarine Cable and terrestrial cable operators sell bandwidth in bulk to international internet gateways (IIGs), internet service providers (ISPs) and international gateways (IGWs).
The country has six private terrestrial cable operators who also serve as a backup for the lone submarine cable that has a 60 percent market share in wholesale bandwidth business.
The recent decision of Submarine Cable to slash bandwidth price will affect the business of the private operators, said Moynul Haque Siddiqui, managing director of Fiber@Home, a private terrestrial cable operator.
Now the private operators too will have to reduce price to remain competitive, but such a move will take a toll on their business, he said.
So it will be tough for them to stay in the race if the government does not set a price floor for wholesale bandwidth, Siddiqui said.
Zahir Ahmed, managing director of BanglaTel, another terrestrial cable operator, said Submarine Cable already has an edge over them as the state-run company does not need to bear investment cost now and it can borrow from international lenders at low interest rates.
On the other hand, the private operators have just started their business and count bank interest at more than 15 percent, Ahmed said.
Telecom Secretary Md Abubakar Siddique said the price cuts by Submarine Cable may reduce profits of the private terrestrial cable operators, but will not put their business at risk.
“We can consider setting a lower limit for bandwidth price, but before that they (the private operators) will have to guarantee that they will not cross the limit,” said Siddique, who is also the chairman of Submarine Cable.
Monwar Hossain, managing director of the state-run listed company, said they have reduced bandwidth prices when they started losing clients because of huge price cuts by the private operators.
In May their sales dropped to 30 Gbps from 42 Gbps before, Hossain said, adding that a price floor will ultimately affect the end-users.
The new prices of the state-run company may be approved by the telecom ministry soon.
After the price cuts by Submarine Cable, the price for the IIGs, which purchase a huge amount of bandwidth, will be Tk 855 per Mbps, and for the ISPs it will be Tk 1,350.

Published: 12:00 am Tuesday, June 10, 2014

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