bKash pays Tk 139cr for using mobile networks

Top mobile money provider bKash has paid about Tk 139 crore in the last three years to the mobile operators for using their networks to send messages to account holders against their transactions.

Mobile money users traditionally use unstructured supplementary service data or USSD channels to provide services to its customers. USSD is a global system for mobile communication technology that is used to send texts between a mobile phone and an application in the network.

In Bangladesh, MFS providers share 7 percent of earnings of MSS charges or USSD session earnings with the mobile operators.

In 2015 alone, bKash paid Tk 67 crore to four mobile operators -- Grameenphone, Robi, Banglalink and Airtel -- for using their USSD channels, said Zahedul Islam, spokesman for bKash. A major portion of that network fee went to Grameenphone, which dominates the mobile industry.

bKash paid Tk 46 crore and Tk 26 crore respectively in 2014 and 2013 to the mobile operators, according to Islam. “It clearly shows a remarkable increase of our contribution to the revenue earnings of the telecom operators amid growth of mobile wallets.”

bKash controls more than 90 percent of the total mobile money market of 3.65 crore registered customers.

Bangladesh Bank reported that more than a dozen MFS providers transacted around Tk 700 crore a day as of June 2016.

Commenting on bKash's information, an official of a telecom company said it means that if Tk 100 is collected as revenue from the customers for their service, the mobile operators received only Tk 7. If bKash shares Tk 139 crore, it means it earned Tk 1,985.71 crore, using the mobile networks and bearing no cost on it.

Acknowledging the calculation, however, bKash said they also share 80 percent of its revenue with agents and distributors as commission. 

The Association of Mobile Telecom Operators of Bangladesh or AMTOB submitted a proposal to Bangladesh Telecommunication Regulatory Commission, saying 86 percent of USSD traffic and 100 percent of SMS are free of charge as MFS operators are not taking any fees on most services.

“There is a chunk of transactions where bKash does not charge customers, but those transactions are using operators' USSD resources,” said a top official of a mobile operator.

AMTOB said it resulted in a cumulative industry revenue loss of Tk 44.9 crore in the fourth quarter of 2015 alone. They also asked the telecom regulator to fix Tk 1.5 for every USSD session and Tk 0.20 for an SMS.

Mobile operators also share 5.5 percent of it with the government and 1 percent for SOF contribution, which means the government is also losing revenue from this segment.

On the other hand, MFS operators said if USSD charges increase, it will impact the customers and they will have to pay more.

The telecom regulator recently held a meeting with all the stakeholders on fixing the USSD charges.

The objective of launching mobile money services back in 2011 was to create financial access for the poor and unbanked via mobile phones.