IGW operators aim to double earnings

International gateway operators aim to double their annual earnings to $1.2 billion next year.

They shared their target with Tarana Halim, the newly appointed state minister for telecom, in a meeting at her office yesterday.

The IGW Operators Forum or IOF said the industry is currently earning around $600 million a year.

To reach their target, they increased the incoming call termination rate without approval from the government or the telecom regulator.

On August 16, the forum directed all IGW operators in a letter signed by Khandakar Muzharul Haque, deputy chief executive of IOF, to increase the call termination rate by 33.33 percent, to be effective from August 24.

IGW operators are currently terminating calls at $0.015 a minute, which has been reset higher at $0.02.

“After increasing the termination rate, we can help the government increase the foreign exchange amount,” said Haque. “We haven't discussed the matter with the government yet, but we need to do so.”

They are allowed to increase the call termination rate up to $0.03, Haque claimed. 

Of the $0.015 a minute, the regulator gets 40 percent, interconnection exchanges 17.5 percent, land or mobile phone operators 22.5 percent, while IGWs keep the rest.

However, even though IOF increased the termination rate, it would not share the extra earnings with BTRC, ICX and the land or mobile phone operators, said officials of the telecom division.

Bangladesh Telecommunication Regulatory Commission would not comment on the matter.

The telecom division said the IGW operators cannot increase the termination price on their own.

“What they are trying to do is a crime,” said Md Faizur Rahman Chowdhury, telecom secretary. “They can't do it without government approval, and we need to look into that.”

There are currently 105 million minutes of legal incoming international calls a day in the market, said industry insiders. If the per minute price increases by $0.005, it means the IGW operators will earn an additional $0.53 million a day and no-one else will get a share from it.

Haque said the incoming international calls could be a major source of foreign currency, if the government allows it.

In the meeting with the telecom state minister, IGW operators said the current situation is not in their favour, but they can ensure more foreign currency coming into Bangladesh.

“Potential earnings will cross $1.2 billion a year, and we can earn more gradually,” said Imran Karim, chairman of Digicon Telecommunications, an IGW operator.

IGW operators also proposed not to cut the mobile operator interconnection charge, which would allow slashing the local call rate, said Karim.

“This may increase illegal international call termination.”

A mobile phone operator recently proposed to reduce the interconnection charge to cut the average local call rate.

According to IOF's estimate, there are 50 million minutes of illegal incoming calls in the market a day, which amounts to a market price of $250 million.

The government had earlier approved a cartel in the incoming call termination market, where only seven IGW operators can terminate international calls, although 23 IGWs are in operation. Other IGWs bring calls from international carriers from different countries but they can only send it to the tier-2 IGWs.