Broadband poised for a leap

Bangladesh's slowly advancing broadband market is expected to flourish with affordable rates for the masses, as the telecom minister assured prospective licensees that the 3G spectrum will not be auctioned.

The minister's assurance however raised mixed responses among telecom industry insiders, as no one is sure about the criteria of the "beauty contest", which is expected to become a tool for awarding the 3G (third generation) licences. Traditionally, beauty contests incorporate personality, talent and answers to judges' questions as criteria for selection. In response to journalists' queries, Telecom Minister Rajiuddin Ahmed Raju recently said: "The 3G licence will not be auctioned as was happened with the WiMax licence, which was awarded at a hefty price of Tk 215 crore."
Bangladesh's internet penetration rate may reach 32 percent at household level and 66 percent at business level by 2020, according to a study conducted by Boston Consulting Group (BCG), USA. At present, the average internet penetration rate is only 4 percent, which is mainly driven by mobile operators' EDGE (enhanced data rates for global evolution) and GPRS (general packet radio service) solutions. All the mobile operators are ready to upgrade their networks to 3G from the existing 2.5G or 2.75G as 3G is considered one of the most competitive tools to provide high-speed internet. The telecom regulator has already reserved 40 MHz spectrums to allocate to four prospective operators.
"We welcome the telecom minister's comment on arranging a beauty contest to award the 3G licence, rather than monetary bidding," said Ahmed Abou Doma, chief executive officer of Banglalink. He said this is exactly what happened in many advanced countries that have already launched 3G. "They implied the beauty contest approach because it ensures fastest and widest 3G coverage along with the highest service levels and quality for the customers," Doma said.
However, the market's top player -- Grameenphone (GP) -- has doubts about the transparency of the 'beauty contest'. “I don't have details on the exact model or form of the 'beauty contest' that the telecom ministry and the regulator have talked about. Therefore, it's difficult to accept or reject the idea. It may be noted that beauty contests are inherently a non-transparent process," said Oddvar Hesjedal, chief executive officer of Grameenphone Ltd.
Hesjedal, however, said it might be considered if the 'beauty criteria' are wide enough to include all mobile players in Bangladesh and all the terms and conditions of spectrum allocation are affordable to all the existing operators. "GP will support any process, which is credible and transparent," he said. He suggested the regulator proceed with public knowledge and go for an open consultation before launching the model. "In any process, we must not forget the ultimate objective of providing affordable mobile broadband and modern services," said Hesjedal.
Among the six operators, five GSM (global system of mobile communication) operators are technically eligible for the 3G spectrum. Except for CDMA (code division multiple access) technology-based Citycell, Grameenphone, Banglalink, Robi and Warid will contest for the 3G spectrum. However, state-run Teletalk may enjoy a privilege in getting the 3G spectrum without participating in the 'beauty contest'. "Nothing has been decided yet," said Zia Ahmed, chairman of Bangladesh Telecommunication Regulatory Commission (BTRC), the regulator. "We are working on finalising the guideline for 3G."
In Bangladesh, only 4.4 million people have access to the internet. Forty-eight percent of urban Bangladesh is aware of internet services, while 29 percent of the rural population have heard about the service, said the BCG study. Bangladesh will have around 20 million internet subscribers by 2020 if proper policy support is provided, and 90 percent of the users will be added through wireless connections, the study said. Annual earnings from broadband internet penetration in Bangladesh is expected to reach Tk 128 billion by 2020 if the country ensures a rule-based policy regime, according to the US-based consulting group.