Effective implementation of SMP guidelines urged to bolster telecom sector growth

A roundtable discussion, organized by the Telecom Reporters Network Bangladesh (TRNB), on Tuesday (Dec.31,2024) underscored the urgent need for effective implementation of the Significant Market Power (SMP) guidelines to establish stability and fair competition in Bangladesh’s telecommunication sector.
Experts highlighted that the SMP framework, if properly enforced, could save smaller operators, encourage infrastructure sharing, and attract foreign direct investment (FDI) in the sector.
Presided over by Samir Kumar Dey, president of TRNB, the program featured a keynote presentation by Al Amin Dewan, organizational secretary of TRNB. The keynote shed light on the decreasing competitive state due to dominance of a single large operator amongst the Mobile Network Operators although the regulator had taken steps through introduction of the Significant Market guideline more than 4 years ago. This is also leading to many operators leaving the country and a decrease in investments in this sector.
Key concerns raised
It was revealed in the roundtable that despite continued investment by mobile network operators (MNOs), average revenue per user (ARPU) has steadily declined over the years. The ARPU in 2009 was 3 US dollar, which has plummeted significantly in the last few years, currently standing at 1.3 US dollar.
Declining ARPU, further compounded by increasing tax burden, is slowing down the sector’s growth. High taxation and intense competition have hamstrung the growth of the smaller operators, leaving snowball impacts on the overall growth of the sector.
While inflation rate now stands at 11 percent, the telco sector’s revenue has nosedived to 4.40 percent in 2024 from 6.39% in 2020. The sector’s revenue has halved in the last five years.
Experts opine that many of these issues have surfaced owing to not implementing existing SMP regulations properly. The SMP operator still has more than 90% of profit market share, nearly 50% revenue market share also controls 50% of the shareable infrastructure which they are not eager to share. This is not only deterring new investors in this sector but also leading to exits of players in the market.
It was noted that while the regulator introduced SMP guidelines in 2018, key provisions have not been reviewed or implemented effectively. Section 7(11) of the SMP policy mandates annual reviews, but these have been overlooked. The current implementation has had minimal impact on ensuring fair competition.
Speakers also cited international examples, such as Australia, India, the UK, and the EU, where strict enforcement of SMP regulations has ensured market fairness and consumer benefit.
BTRC chairman Major General (Retd.) Emdad Ul Bari underscored the need for industry collaboration at the roundtable. He said, “The root of unfair competition in the market lies in the fact that the BTRC as a regulator does not really have any power of its own; they have to take prior approval from the government. Inconsistent and unpredictable change of regulations is another problem. However, some restrictions have already been put on the SMP player. Now, all of you have to work together. Industry collaboration is a must. We have to change our perception. Telecom sector is an enabling sector, so focus on enabling the subscribers. For the sake of services, businesses will be supported. Let us all work together for national progress.”
Apart from impeding the process of creating level-playing field for all, this kind of discrimination is also taking the wind of foreign investors’ sails and discouraging them to plow back more money into Bangladesh market, speakers at the roundtable observed.
Competition Commission’s former director Md. Khaled Abu Naser put emphasis on making the Commission more effective. He said, “The Competition Commission has been ineffective since 15 October. Moreover, the Commission has no liaison with the BTRC. As a result, investment is in a precarious situation. An oligopoly (monopoly) market has been created. In this situation, the entire telecom sector needs an overhaul.”
TIM Nurul Kabir, Executive Director and CEO, Foreign Chamber of Commerce and Industry, opined at the roundtable, “Instead of granting political advantage to anyone, we should think about whether we need a unified licensing model. However, to ensure the development of this sector and to take the right decisions, BTRC should establish a Research and Development Wing. In addition, consistency in the regulations and policies is very important to lure in more investments in our country.”
Lt. Col. (Retd.) Md. Zulfikar, Secretary General, AMTOB, said, “Telecommunications is a very important sector. Many people have invested in this sector. To attract more investment, a competitive environment must be created. To solve various problems existing in this sector, the entire sector must be regulated under specific regulations.”
Taimur Rahman, Head of Corporate Affairs, Banglalink, opined, “It is necessary to implement the existing regulations. For example, to accelerate the process of infrastructure sharing among operators, there should be particular mandate in the existing or new laws to be enacted in future. As advanced technologies like AI are emerging, we need to focus on how to further increase competition in the market.”
Banglalink’s company secretary Jahrat Adib Chowdhury said in her speech, “Mobile operators are playing a very good role, contributing to reducing the digital divide. But due to various challenges, operators are not being able to invest more. To improve this situation, it is necessary to implement sector-friendly laws and regulations, especially the Significant Market Power (SMP) guidelines, without giving advantages to any specific operator.”
Shahedul Alam, Head of Corporate Affairs of Robi, said, “Competition is a fundamental driver of economy growth. But the fact is competition does not really exist in the telecom sector. One of our operators is making huge profit every year. It is because the telecom regulations are somehow benefitting the large operators while hampering the growth of the smaller operators. Our competition commission needs to be made more effective to overcome this problem.”
Teletalk MD Nurul Mabud Chowdhury said at the roundtable, “The situation of unfair competition is so severe that it is not even worth talking about. There is definitely unhealthy competition in the market; Teletalk is struggling to survive amidst this competition.”
Supreme Court Advocate Barrister Rasha Imam opined, “Establishing healthy competition in the telecommunications sector is very important. We need to talk about competition law to ensure consumer rights and retain existing investments. There are 20 clauses in the Significant Market Power (SMP) guidelines, but only three have been implemented, which has not played a significant role in promoting fair competition in the market. BTRC is empowered by law, but in many cases that power is not being used effectively.”
The roundtable concluded urging the regulator to review proper implementation of the SMP guidelines to enhance competition in the Mobile Telecom Industry to create a level playing field for all operators. This step is critical to sustaining the sector’s growth, attracting investments, and ensuring long-term consumer benefits.
BTRC chairman Major General (Retd.) Emdad Ul Bari was present at the roundtable as the chief guest. The event was also graced by several other prominent figures, including TIM Nurul Kabir, Executive Director and CEO, Foreign Chamber of Commerce and Industry; Md. Khaled Abu Naser, Former Director, Competition Commission; Lt. Col. (Retd.) Md. Zulfikar, Secretary General, AMTOB; Nurul Mabud Chowdhury, MD, Teletalk; Taimur Rahman, Head of Corporate Affairs, Banglalink; Banglalink’s company secretary Jahrat Adib Chowdhury; Shahedul Alam, Head of Corporate Affairs, Robi and Supreme Court Advocate Barrister Rasha Imam.