Exploring the Reasons behind Poor Sector Specific Performance CPRSouth 6 Bangkok Thailand December 2011 Faheem Husain faheemhussain atgmailcom This work was carried out with the aid of a grant from the International Development Research Centre Canada and the Department for Int ID: 315103
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Telecom Regulatory Environment in “Digital Bangladesh”: Exploring the Reasons behind Poor Sector Specific Performance
CPRSouth 6, Bangkok, ThailandDecember, 2011Faheem Husain(faheem.hussain[at]gmail.com)
This work was carried out with the aid of a grant from the International Development Research Centre, Canada and the Department for International Development, UK.Slide2
Digital Bangladesh and the Telecom Industry
Internet Subscribers in Bangladesh
Market Shares (based on SIMs) in the Mobile Sector
Telecom Sector as % of Total Tax Revenue
Fixed Internet
Mobile InternetSlide3
Analytical Framework
This study used perceptions of key stakeholders (e.g., operators, legal experts, civil society, etc.) to evaluate the effectiveness of the regulatory and policy environment in three telecom subsectors (fixed, mobile, and broadband) along seven dimensionsThe average TRE score for all three telecom sectors across the seven regulatory dimensions turns out to be 2.6, which is below the satisfactory level of 3
TRE Scores by Regulatory Dimensions
Average TRE ScoresSlide4
Key Findings
Good Interconnection Enabled Better Telecom Diffusion Extensive competition facilitated better customer serviceAvailability of effective telecom network all over Bangladesh
Growth of SIM/Access Paths in BangladeshSlide5
Key Findings
Uncertainty in Policy Formulation and Implementation High renewal fees for spectrum allocation and mobile phone operating licensesstalled rollout of 3G Arbitrarily calculated Market Contribution Factor creating disincentives for the stakeholders to grow State incumbent’s monopoly over Bangladesh’s submarine cable landing station made access to infrastructure costly Slide6
Key Findings
Failure in Developing an Effective Regulatory Framework Rolling back regulatory liberalization- significantly curtailed the power for the Regulator Telecommunication Act of 2010Provisions for heavy fine and punishments Stagnant market place with ministry at the helm; long delay and bureaucratic red-tapes on tariff decisions
Failed to cope up with the dynamic telephony marketUnregulated broadband pricingSlide7
Key Findings
Absence of Long Term Planning Incoherency between Telecom Policies and “Digital Bangladesh” visionSlide8
Key Findings
Absence of Long Term Planning Anti-competitive practices in VAS marketDisputes with revenue sharing, intellectual property rightsLack of QoS guidelinesBTRC is yet to publicize its documentsQoS is somewhat balanced in Mobile Phone Industry due to competitionAs shown in LIRNEasia studies, broadband operators are failing to keep the promises on QoS*No clear definition of “Bangladeshi” Universal Service
Do we need it? How does the funding get disbursed?
* Broadband Quality of Service Experience (QoSE) Indicators, 2009, LIRNEasia
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Recommendations
Pro-market 3G LicensingPresent private operators should be allowed to have transition from 2G to 3G servicesProvisions for Refarming the incumbents can be required to pay a certain amount of spectrum utilization fee, consistent with that for the new 3G licensees*Ensuring Prompt Tariff RegulationsMoPT needs to transfer back the responsibility of Tariff regulation to BTRC For broadband sector, price ceilings/floors should be set* Guermazi, B., & Neto, I. (2005). Mobile License Renewal: What Are the Issues? What is at Stake? The World BankSlide10
Recommendations
Acting against Anti-Competitive PracticesClear directives on abuse of dominance, cross subsidization, predatory pricing, bundling, and related practices*Active implementation of the infrastructure sharing guidelines to prevent non-tariff barriers for the market entrants in voice, internet, and VAS sectorsBroadband operators should be allowed to negotiate with the international carriers to reduce bandwidth pricing and for efficient internet traffic management* Monson, C., Banarjee, A., Briceño, A., Ros, A., Tardiff, T., McKinley, A., Kalba, K., & Frieden, R. (2007). ICT Regulation Toolkit. NERA Economic ConsultingSlide11
Recommendations
Clarity in Guidelines for USO and SOFBangladesh can follow Pakistan’s example to include private participation in the governance of SOF*It helps to expedite the decision making process of identifying potential projects and fund disbursement**Should focus on developing local content and broadband networkEffective QoS ObligationsBTRC needs to share its guidelines of QoS for voice and data services, and facilitate inclusive consultation Specific focus on “Broadband” services* Guermazi, B., & Neto, I. (2005). Mobile License Renewal: What Are the Issues? What is at Stake? The World Bank
** Sambandaraksa, D. (2010). All of Pakistan to have fibre access. The Bangkok Post. Slide12
Acknowledgements
LIRNEasia, IDRC, DFIDHelani Galpaya, Aslam Hayat, Sriganesh Loknathan, Abu Saeed Khan, Rohan Samarajiva Thank You!