TDS Desk

The Task Force Report on Re-strategising the Economy and Mobilising Resources for Equitable and Sustainable Development has recommended immediately withdrawing the 20% supplementary tax and 2% surcharge on internet services.

The report submitted to Chief Adviser Prof Muhammad Yunus on January 30 also recommended the Bangladesh Telecommunication Regulatory Commission (BTRC) waive the 5.5% revenue sharing and 1% social obligation fund (SOF) for internet revenue.

“Considering the significant impact of internet-driven technologies in the lives of common people, particularly AI applications in education and healthcare, governments must recognise the internet as a ‘social good’ to guarantee equitable access for all citizens, especially marginalised communities,” reads the report.

It says the current high taxation and fiscal policies that impose charges exceeding 50% on internet users “directly contradict the country’s commitment to equitable development.”

One of the primary factors driving up mobile data costs is the high level of taxation and government revenue requirements, said the report.

It estimated that for every Tk100 data pack purchased by a mobile user, more than Tk50 is allocated to the government in various forms, including supplementary duty (20%), VAT (15%), revenue sharing (5.5%), surcharges (2%), social obligation funds (1%), and spectrum related fees (~9%).

This significant financial burden contributes substantially to the overall price of mobile internet services, it added.

Education and Planning Adviser Prof Wahiduddin Mahmud handed over the task force’s report to the chief adviser at the Chief Adviser’s Office in Tejgaon yesterday (30 January).

The 12-member taskforce was formed on September 10 to reframe the development strategies, find out leakages in the financial system and restore discipline in project implementation.

ARTIFICIALLY FRAGMENTED SUPPLY CHAIN

The report says the data transmission value chain comprises multiple layers due to the existence of 29 licencing categories, including International Gateway (ITC), Internet Gateway (IIG), and Nationwide Transmission Network (NTTN), which has created a complex telecom ecosystem, leading to inefficiencies and non-value-added entities.

According to the report, this creates layered intricacies that ultimately impact the quality of service and cost of service to subscribers.

It says the presence of several exclusive licenses within this framework often serves to promote rent-seeking behaviour without adding any real value to the service. These multiple layers contribute to unnecessary costs, raising the price of mobile data for consumers, reads the report.

Moreover, current licensing regulations prevent the sharing of infrastructure among service providers.

The task force report says this restriction hinders opportunities for more cost-effective investments in the overall data infrastructure, further exacerbating the high costs associated with mobile data. “Without regulatory reforms to streamline these processes and reduce taxation, the financial barriers to mobile internet adoption are likely to persist.”

SAME BANDWIDTH, DIFFERENT PRICE

The report suggests any ISP or telecom company purchases 1 GB of data at less than Tk1 (Tk0.5). The broadband service providers in the urban areas spend very little on top of that to deliver to the end users.

Hence the price the broadband users pay to the service providers is very low, less than Tk2 per GB.

However, for any telecom operators who are the main service providers in rural areas, the transmission cost of the bandwidth is six times higher than the bandwidth cost.

As per the report, telecom operators need to pay NTTN (only 2 NTTN operators) Tk1.2 and also Tk 2.6 to tower companies for each 1 GB bandwidth.

BARRIERS IN LAYING FIBRE

The task force report says the current NTTN policy creates barriers for mobile and other internet operators, hindering optimal service delivery.

“It restricts MNOs [mobile network operators], ISPs [internet service providers] to lay fibre creating full dependencies for transmission across the country on them. Such policy restricting MNOs, ISPs to lay fibre is nowhere practised in the world,” reads the report.

Moreover, the current regulatory practices don’t allow any telecom operators to import and install necessary equipment such as DWDM (Dense wavelength-division multiplexing), which is an optical fibre multiplexing technology that increases the bandwidth of fibre networks.

NTTNs are the only entities authorised to import and use DWDM. The report says this artificial restriction is restricting cost optimisation in the ecosystem.

TELECOM COMPANIES NOT ALLOWED TO SHARE UNUSED INFRASTRUCTURE, SPECTRUM

Another reason for low utilisation and high-cost networks of telecommunication infrastructure is restriction of sharing, says the report.

“Telecom companies are not allowed to share their unused infrastructure equipment and spectrum. Though tower sharing is allowed, attempts in the past have been unsuccessful due to non-cooperation between operators,” it reads.