Draft policy proposes up to 80% FDI in internet services
- Draft telecom policy proposes capping foreign direct investment (FDI) at 80% for Internet Service Providers (ISPs).
- Mobile operators can have up to 90% FDI while ensuring a mandatory 10% local equity share.
- Industry insiders express concern that high FDI limits might jeopardize local telecom and broadband entrepreneurs.
The government has formulated the 6th draft edition of the 'Telecommunication Network and Licensing Policy, 2026' to modernize the national telecom sector after a decade and a half. The current BNP-led administration is addressing objections raised regarding the draft prepared during the interim government's tenure, aiming to create a more competitive and technology-driven environment.
Under the newly proposed framework, the ceiling for Foreign Direct Investment (FDI) in Internet Service Provider (ISP) companies is set at a maximum of 80%. However, to prevent absolute foreign ownership, a minimum of 20% local equity retention remains mandatory. For shared infrastructure, foreign investment is proposed up to 80%, while international connectivity allows a maximum of 49% FDI to safeguard national security by retaining 51% domestic control. Satellite and space services may permit 100% foreign equity subject to security clearances.
Regarding mobile network operators, the revised draft relaxes foreign ownership restrictions, proposing a maximum FDI cap of 90%, up from the previously considered 85%. Nonetheless, at least 10% local or domestic ownership is required. If finalized, this provision would mandate Banglalink to offload 10% of its shares in the local capital market, whereas Grameenphone and Robi already satisfy local ownership requirements.
However, local industry representatives have voiced strong concerns regarding high foreign ownership caps. ISPAB General Secretary Nazmul Karim Bhuiyan warned that allowing over 49% FDI in the broadband sector could put emerging local entrepreneurs at severe risk and eventually hand control over to foreign entities.
The reform draft also introduces strict 'Significant Market Power' (SMP) regulations to prevent market monopolies and consolidates licenses under four streamlined categories: ICSP for connectivity, TCSP for infrastructure, and NTNSP for satellite internet. The draft prepared by BTRC is currently under review before final submission to the ministry.
//DBTech/ IH/ SME//
