Telecom Division Gets Tk 2,141 Crore in FY2026-27 Budget, Broadband Operators Voice Concerns

The proposed national budget for FY2026-27 has allocated Tk 2,141 crore for Bangladesh’s Posts and Telecommunications Division as part of the government’s broader strategy to advance the country's ICT sector and digital economy.

The allocation was announced on Thursday when Finance Minister Amir Khasru Mahmud Chowdhury presented the country's 55th national budget and the first budget of the current administration in Parliament, chaired by Speaker Dr. Hafiz Uddin Ahmed, in the presence of Prime Minister Tarique Rahman.

While mobile operators have welcomed tax reforms proposed in the budget, broadband internet service providers have expressed disappointment over the absence of incentives for expanding fiber-optic infrastructure.

Allocation Breakdown

According to budget documents, the Posts and Telecommunications Division has been allocated:

• Tk 1,193 crore for operational expenditure.
• Tk 948 crore for development projects.

The total allocation is slightly lower than the Tk 2,148 crore originally allocated in the FY2025-26 budget.

However, it is higher than the revised FY2025-26 allocation of Tk 1,987 crore, which included Tk 1,212 crore for operational expenditure and Tk 775 crore for development spending.

In FY2024-25, actual expenditure under the division stood at Tk 1,966 crore, including Tk 1,123 crore in operational costs and Tk 843 crore in development spending.

Budget analysts note that although the allocation has increased compared to the revised budget, the reduction from the original budget could affect the pace of development projects, particularly those focused on telecommunications infrastructure expansion.

Mobile Industry Welcomes SIM Tax Reform

One of the most significant measures in the proposed budget is the withdrawal of the existing Tk 300 fixed SIM tax.

Under the new proposal, SIM cards will instead be subject to a 15 percent value-added tax (VAT) based on the sale price.

The move has been welcomed by the mobile industry.

Lt. Col. Mohammad Zulfiqar (Retd.), Secretary General of the Association of Mobile Telecom Operators of Bangladesh (AMTOB), said the change could help bring nearly 40 percent of the population who remain outside telecommunications services into the digital ecosystem.

He also called for additional reforms, including:

• Reducing the overall tax burden on telecom consumers.
• Rationalizing corporate tax rates.
• Removing VAT on spectrum acquisition.
• Eliminating supplementary duties on OTT services.

Broadband Operators Frustrated

In contrast, broadband internet providers argue that the budget offers little support for fixed broadband expansion despite the government's digital transformation ambitions.

Aminul Hakim, President of the Internet Service Providers Association of Bangladesh (ISPAB), criticized the absence of incentives for fiber-optic network deployment.

He argued that lowering the cost of SIM cards, laptops, or personal computers alone would not be sufficient to accelerate digital economic growth without robust connectivity infrastructure.

According to him, fixed broadband penetration in Bangladesh remains around 9 percent, far below the international benchmark of approximately 56 percent often associated with advanced digital economies.

“Affordable, high-speed internet access is the foundation for the growth of freelancing, fintech, healthtech, edtech, and other digital industries,” he noted.

Call for Infrastructure Incentives

Saiful Islam Siddique, Senior Vice President of ISPAB, emphasized that the country still lacks adequate last-mile broadband infrastructure.

He pointed to challenges such as:

• Insufficient nationwide transmission networks.
• Limited NTTN infrastructure.
• Lack of sustainable access networks reaching individual households.

He suggested providing direct incentives to internet service providers to expand networks and develop skilled human resources.

Concerns Over Digital Divide

Industry analysts warn that reduced development allocations and the absence of targeted incentives for fiber-optic deployment may slow broadband expansion, particularly in rural and underserved areas.

They argue that delays in extending high-speed internet access could widen the digital divide and make it more difficult to achieve the government's goals of building a cashless and digitally connected economy.

//DBTech/SI/MUM/OR//