ISP Industry in Bangladesh at a Crossroads: Challenges and the Call for Change

The internet revolution in Bangladesh was sparked by local Internet Service Providers (ISPs), who brought broadband connectivity into households across the country. These ISPs—through relentless efforts and overcoming numerous challenges—laid the foundation of digital connectivity by stretching fiber-optic cables into even the narrowest alleys. Now, as mobile operators and global players expand their reach deeper into the domestic market, these early pioneers find themselves facing an existential threat.

Looking back, it is evident that ISPs were instrumental in introducing thousands of young Bangladeshis to platforms like YouTube and Facebook, and in supporting the rise of a freelance economy. The contributions of this sector are not insignificant; they are, in fact, a part of the nation's collective progress. Yet, time moves forward. Any sector that fails to keep pace with technological advancement is bound to face disruptions—and the ISP sector now stands at such a turning point.

History and Immense Contribution of ISPs

In the early 2000s, when the term "broadband" was still novel, a group of young entrepreneurs and tech-enthusiasts began providing internet services across areas like Dhaka, Narayanganj, Khulna, and Chattogram using self-made networks. Some sourced capital from family, others borrowed, but they all shared a common dream: to connect people to knowledge.

These ISPs were the first to physically install fiber cables at customers’ doorsteps, to rush out at 3:00 am to fix downtime issues. They provided reliable connections to countless freelancers, students, businesspeople, and professionals. Their role became especially vital during the COVID-19 pandemic, when they served as a lifeline—helping people work, study, and run businesses from home. Government-led digital services, telemedicine, online education, and remote working were all made possible by the silent yet indispensable contributions of this sector.

The Road Ahead: Emerging Challenges

Bangladesh's telecom landscape is poised for a major shift. The Bangladesh Telecommunication Regulatory Commission (BTRC) recently proposed a draft policy that would allow mobile operators to offer wired broadband services to enterprise customers.

"7.3.2 They will use designated radio frequency to connect the end users. But at the same time, when technology allows, and the solutions demand they can also combine both radio and wired access technologies to provide enterprise solutions."

This is seen as the first move toward sidelining local entrepreneurs. Mobile Network Operators (MNOs) have already been permitted to offer mobile data and Fixed Wireless Access (FWA) services—delivering broadband via mobile networks directly to homes. Adding to the pressure, international satellite-based services like Starlink are on the verge of entering the Bangladeshi market.

In the near future, competition will not be based merely on speed or pricing, but on overall user experience, customer service, and technological capabilities. In this new reality, Bangladeshi ISPs are facing a question of survival.

Why the Sector is in Crisis

Many in society blame ISPs themselves, citing frequent service disruptions, poor support response, dangling wires, and a lack of transparency in packaging and billing systems. Several ISPs have prioritized business expansion over technology investment. However, ISP stakeholders argue that deeper structural issues also exist, including VAT at every level of the internet ecosystem, high taxation, disproportionate revenue-sharing rates, the imposition of a Social Obligation Fund (SOF), lack of permission for active infrastructure sharing, muscle power interventions, and the presence of unlicensed operators. These have created significant instability in the sector. Business owners remain under immense pressure. Notably, the previous authoritarian government failed to take any steps to resolve these issues. Now, it remains to be seen whether the current administration will act—or ignore the crisis.

Core Strengths of ISPs

Despite the mounting challenges, Bangladesh's ISPs still possess several strengths that can help them survive and even thrive in the future:

Strong local connections: ISPs have in-depth knowledge of their communities, markets, and local needs.

Fast response times: While mobile companies may take up to a week to respond through ticketing systems, local ISP field technicians often arrive within 30 minutes of a call—this builds relationships, not just services.

Affordability: ISPs continue to offer unlimited broadband at the lowest prices, with speeds of 10 to 15 Mbps available for just BDT 500—commendable even by global standards for low-income nations.

Reliability: In many cases, local fiber networks provide more consistent service compared to congested mobile data networks.

Customer loyalty: Families that have been with the same ISP for eight years often trust them over new MNOs—“their technician came just last month and provided excellent service,” they say. Such brand loyalty takes years to build.

What ISPs Must Do to Survive

Change is the only path to survival. The question is not whether the ISP industry is ending—it is whether it can adapt. If ISPs evolve swiftly, they can not only survive but also thrive. The following strategic actions are essential:

Prioritize quality over quantity: ISPs must move away from low-cost, low-quality models and invest in robust backhaul, resilient fiber networks, redundancy, and real-time monitoring systems.

Develop a customer service culture: Professional 24/7 customer care, smart ticketing systems, live chat, and automated support tools must become standard.

Build technological and software capabilities: ISPs need their own CRM, NMS, billing platforms, and real-time alerting systems.

Unite for policy reform: ISP forums and broadband associations must become more active in negotiating with regulators for a level playing field between ISPs and MNOs.

Engage with local communities: ISPs can enhance their presence through digital literacy events, internet awareness campaigns, or school-based programs.

Explore untapped markets: While urban competition is intense, rural areas and smaller towns still offer great potential for expansion.

Offer value-added services: Beyond just internet, ISPs can provide IP phones, IPTV, cloud storage, and local CDNs, which deepen customer relationships and diversify revenue.

What the Government Must Do

To protect local entrepreneurs, the government must step forward. On April 19, 2025, the ISP Association announced an upgrade from 5 Mbps to 10 Mbps at BDT 500. In response, Fiber@Home announced a 10% discount on IIG services and 15% on NTTN services on April 21. Summit Communications followed on April 22 with similar offers. Bahon Ltd. also announced a 10% NTTN discount. However, apart from the ISP industry, none of these discounts have been fully implemented. Government intervention is necessary.

Authorities should have to declare- 

• Permit active infrastructure sharing.

• Declare internet services as IT-enabled services.

• Remove revenue-sharing requirements on internet services.

• End the collection of Social Obligation Fund (SOF) payments from ISPs.

Not the End—A New Beginning

The ISP sector is undergoing a difficult phase. Yet, it is hard to imagine that the very sector which brought internet access to every home and transformed the country into a digitally driven nation will simply fade away. Instead, this crisis should be viewed as an opportunity for reinvention. ISPs have the experience, local insight, infrastructure, and customer trust. By building on these strengths, the industry can rise again.

The only question now is: Will the government stand by its homegrown entrepreneurs?

Writer: Mohammad Aminul Hakim, CEO, Amber IT Ltd.

Note: The views expressed in this article are solely those of the author and do not reflect the opinions of Digital Bangla Media. This opinion piece has been published without editorial modifications, in line with the policy of presenting diverse viewpoints. Any offense or discomfort caused by this article is entirely personal to the reader.