Crisis in Internet Sector: ISP Entrepreneurs Face Existential Threat

Mobile operators’ fixed wireless access is pushing the country’s internet entrepreneurs to the brink of extinction. Local entrepreneurs, who have painstakingly built networks over time, are on the verge of losing them to multinational and foreign investors. The country’s interests are not being taken into account in the face of an unknown force trying to dominate not just the mobile domain but also the fixed domain.

Several members of the current licensing evaluation committee of BTRC (Bangladesh Telecommunication Regulatory Commission) have expressed their frustration on the matter, on condition of anonymity. They claim that since the formation of the committee, only one meeting has taken place, where disagreements on several issues were evident. Despite this, if objectionable actions take place, there will be nothing to discuss. Some believe that MNOs (Mobile Network Operators) are subtly influencing BTRC's decisions. They argue that despite having representatives from current and former mobile operators in the 12-member committee, there is a significant underrepresentation of internet service providers (ISPs) from various layers of the service industry. As a result, no matter how much is discussed, the outcome seems likely to favor them. The essence of a national policy that should protect local industries may be completely undermined, leaving nothing to argue about.

In such a scenario, internet business owners are questioning how a mobile operator, designated as a Significant Market Power (SMP), was able to launch wireless broadband internet services or Voice over Internet Protocol (VoIP), even before the release of the fixed wireless bandwidth. They are concerned whether BTRC is working to legitimize services launched outside the regulations.

SM Iqbal, the founder president of ISPAB (Internet Service Providers Association of Bangladesh), commented on the issue, saying, “They are still providing mobile internet services via broadband cable connections. By applying for ISP licenses, they aim to maintain their business while encroaching on others’ territory. Without addressing call drop, missed calls, and service quality, now they want to enter the ISP business under the pretense of providing internet to every household. This should not be allowed. Allowing them to lay fiber cables will result in mobile operators replacing ISPs. This will create unfair competition in the market, threatening local entrepreneurs. It will be a dangerous sign for the country as only giants will remain in the market, leading to massive youth unemployment.”

Mohammad Mahiduddin Ahmed, president of the Bangladesh Mobile Subscribers' Association, criticized the actions of certain stakeholders, saying, “By breaking mobile operator license and SMP policies, Grameenphone’s CEO Yasir Azman managed to secure broadband wireless permission from BTRC using the influence of former ICT Minister Mustafa Jabbar’s nephew. Despite unresolved complaints about mobile network quality and commissions, BTRC continues to protect the beneficiaries of the previous government.”

Tech expert Hasibur Rashid, CEO of InterCloud Limited, further emphasized that the core objective of the 2007 ILDTS (International Long Distance Telecommunication Services) policy was to encourage local entrepreneurs in the telecom sector. He stated, “Local entrepreneurs have made significant investments in remote areas over the past 17 years. Providing internet services in rural areas has been crucial for creating job opportunities among the youth. It is essential to safeguard these investments. If foreign mobile operators are granted ISP licenses, small and medium-sized local entrepreneurs will face financial risks. They can partner with ISPs for services like last-mile connectivity or data links, but bypassing local regulations to grant mobile operators ISP licenses will harm the local industry.”

According to sources, the process of consolidating control over the internet sector began with the involvement of former ICT and Telecom Minister Junaid Ahmed Palak during the previous government. Those who had played an active role in shutting down the internet during the political turmoil were now working to dominate the sector. This has raised questions about the inactivity of ISPAB leadership in defending local entrepreneurs' interests.

Many within the industry feel that the current situation, where the national interest and the protection of local businesses are being overlooked, is a result of ISPAB's failure to present a clear and rational proposal to BTRC. As one observer put it, “Had ISPAB acted more proactively, this situation wouldn’t have escalated to the current crisis.”

The aggressive push to monopolize fixed broadband services, spearheaded by mobile operators, is evident. The demand for fixed broadband has surged, with ISPs having already established networks to serve smaller and medium-sized businesses. The growing concern among internet entrepreneurs is the imminent threat to their investments if mobile operators are granted ISP licenses. The consequence could be the loss of jobs for thousands of young people across the country, as local businesses are wiped out.

Amjad Hossain Khan, Managing Director of Banglafon Limited, remarked, “Broadband and mobile are two distinct spaces. Mobile operators should stay within their domain, as defined by APNIC. BTRC must ensure that each operator remains within their bounds. ISPs have made investments to provide services to marginalized areas. Many entrepreneurs have sold personal assets, including land and cattle, to set up these services. It’s critical that the government ensures ISPs are not deprived of their business opportunities.”

Saiful Islam Siddique, Vice President of IIJAB and former Senior Vice President of ISPAB, highlighted that the internet sector was a social business for local entrepreneurs. He stated, “For years, ‘revenue sharing’ and ‘excess SOF’ have been imposed, while ISP license upgrades have been delayed. Now, the business is being handed over to foreign operators, posing a risk to the development of local industries. If one or more companies are given an advantage, it could lead to the loss of thousands of local entrepreneurs. This cannot be allowed to happen.”

Taimur Rahman, Chief Corporate and Regulatory Officer of Banglalink, responded to the criticism surrounding the license applications, stating, “The current telecom ecosystem is inefficient. Mobile operators are unable to provide high-quality services to the people. As a compliance company, we’ve asked BTRC if we can provide fixed ISP services. For us to remain competitive in the market, offering a range of services is essential. We believe such services can be provided in partnership with ISPs.”

Khaled Abu Naser, former Director of the Competition Commission, also stressed the importance of ensuring the internet service sector does not fall into monopolistic or oligopolistic control. He noted, “The telecom industry is unbalanced, with some operators making profits while others face losses. With foreign investments, the profits are leaving the country. On the other hand, 3,500 ISPs are providing affordable, high-quality services, ensuring that money stays within the country and generating significant employment. However, for further development, substantial investments are needed in the sector, considering both technical advancement and market balance.”

In conclusion, experts believe that granting a single company full control over telecom services could result in a monopolized market, reducing competition and driving local entrepreneurs out. This would lead to lower service quality, higher costs, and a loss of employment opportunities. Therefore, there is a need to reassess the current licensing framework and consider models of cooperation, such as allowing ISPs to partner with mobile operators as Mobile Virtual Network Operators (MVNOs), to balance market dynamics and protect national interests.