Telcos propose to hike charge for mobile wallet users
Telecom operators have urged the regulator to raise the cost of messaging service for mobile money transfer to Tk 2 from almost zero, which means customers will have to pay more.
The Association of Mobile Telecom Operators of Bangladesh has recently submitted its proposal to Bangladesh Telecommunication Regulatory Commission, saying 86 percent of unstructured supplementary service data or USSD traffic and 100 percent of SMS are free of charge.
That resulted in a cumulative industry revenue loss of Tk 44.9 crore in the fourth quarter of 2015 alone, according to AMTOB. USSD is a global system for mobile (GSM) communication technology that is used to send texts between a mobile phone and an application in the network.
It plays a key role in connecting the network to the system and users of mobile financial services. For example, every time a user makes a transaction on his mobile wallet, an SMS is directly sent to that person's mobile number -- this service is an USSD.
The telecom operators said they face huge pressure on their networks, especially at peak hours, due to an increased volume of free texts and crores of USSD sessions from the MFS providers.
This service, which is 86 percent free of charge, creates extra pressure on the operators' networks, leading to more call drops and poor services, they added.
However, the mobile money companies said telecom operators are earning much more than when the service was launched in 2011 because the volume of transactions has gone up significantly. So, the telecom operators should cut the cost instead -- to benefit customers, they added. The MFS providers also said they are not making money from these services either and rather, they are sharing the revenue with the mobile operators.
TIM Nurul Kabir, secretary general of AMTOB, said USSD is an asset to the mobile operators, but it requires investment and cost of maintenance; so it cannot be free of charge for an unlimited time.
“We have written to the telecom regulator with examples from some other countries and we hope BTRC will consider it soon,” said Kabir.
Meanwhile, the central bank has decided to appoint a third party international company to run a massive study and fix the USSD charge within six months, according to officials of Bangladesh Bank.
Subhankar Saha, executive director and spokesman for Bangladesh Bank, said they recommended going for a market study, but unfortunately it did not happen in the last two years.
Kamal Quadir, chief executive officer of bKash, the country's largest mobile money company, said: “We welcome a resource utilisation based cost analysis on USSD pricing by the regulator.”
“As agreed by the committee, comprised of Bangladesh Bank and BTRC members, we expect them to find an effective alternative to USSD that does not deprive the common people who use low-cost handsets.”
A senior executive of a mobile phone operator said they do not want to inconvenience the customers by increasing the cost of service for MFS.
“But using our network, the MFS operators are making money and they are depriving us,” said the top official, requesting anonymity.
“They are using our network and giving free service to their customers. That is helping the users, but is burdening us as we have to bear maintenance costs and we have made investments.”
Two years back, there were around 38 lakh USSD sessions a month, which is 4.56 crore now. The volume of SMS also increased from 5.8 lakh to 80 lakh a month. However, the revenue volume is almost the same for the mobile operators, said the official.
“If they want to give any service free to their customers, they can do so. But USSD is not their service, they will have to pay for it,” he added.
A senior official of a leading MFS provider said they are sharing 7 percent of their total revenue from this segment with telecom operators as per an agreement.
Quadir of bKash said the USSD channel is considered a 'public utility service' and the pricing should be based on the resource utilised. “An engaged study to determine prices is critical."