Regulator to cap mobile data prices

The telecom regulator is set to introduce fixed maximum tariff rates for mobile data packages with the aim of ensuring simple and affordable connectivity services for consumers.

The Systems and Services, a division of Bangladesh Telecommunication Regulatory Commission (BTRC), is finalising the conditions in this regard.

"We will introduce a rate schedule for data with a ceiling price for operators," said Shyam Sunder Sikder, chairman of the BTRC.

"While they cannot offer prices above the fixed rate, they will be allowed to go below the threshold," he added.

However, Sikder then said they are yet to finalise the terms and conditions as changes will be brought about after consulting stakeholders.

The regulator is conducting consultations with various stakeholders, including mobile network operators, to understand their concerns and take into consideration different perspectives of the industry, said an official of the BTRC.

However, this will likely be different from the maximum tariff for broadband internet connections set by the regulator in June 2021.

As per guidelines, a customer has to pay Tk 500 per month for using a broadband connection with a minimum internet speed of 5 Mbps.

For 10 Mbps, the rate is Tk 800 to Tk 1,000, and Tk 1,100 to Tk 1,200 for 20 Mbps.

"The fundamental difference between mobile data and broadband is that mobile operators sell an amount of data while internet service providers sell speed," said Mustafa Jabbar, telecom minister.

Mobile operators offer data to their customers by typically measuring it in megabytes (MB) or gigabytes (GB).

For example, a mobile plan might provide a monthly data allowance of 5 GB, allowing customers to consume up to 5 gigabytes of data during that period.

Meanwhile, speeds are measured in Mbps (megabits per second) and indicate the rate at which data can be transmitted over a broadband connection.

"Overall, we will ensure that the data price in this tariff mechanism remains affordable for everyone," Jabbar said.

He went on to say that operators in the country offer numerous packages, many of which are illogical.

"There are 20 GB packages that last just three days. What can a customer do with so much data in such little time? Such packages will be eradicated," the telecom minister said.

"Besides, the packages of different operators will be made similar, not like the heterogenous packages available in the market now," he added.

For example, Teletalk offers a non-expiring 26 GB data package for Tk 309 while Grameenphone sells a 15 GB version for Tk 549.

Such differences will not be present in the new mechanism and the number of data packages will be cut significantly, Jabbar said.

"There is no discipline in the mobile data market as packages are very confusing and misleading. So, we want to bring order to these services," he added.

The initiative has sparked both support and concern within the telecommunications industry.

"Any pricing regulation should, in our opinion, go through a rigorous consultation procedure," said Taimur Rahman, chief corporate and regulatory affairs officer at Banglalink, the third-placed operator in terms of the number of customers.

Additionally, it should consider the market's competitive environment in light of the fact that Bangladesh's market is unbalanced and uncompetitive, he said.

"The data prices we currently offer are already below cost because everyone is essentially recovering it from voice services," he said.

"Considering the current trend, we expect that soon the demand for voice will decrease significantly and mobile operators will be fully dependent on data," he added.

Therefore, if there are ceilings and floors below cost, it will not be sustainable, according to Rahman.

The larger operator may continue to grow for a while but at that point, smaller operators are going to disappear, which will severely compromise consumer welfare and market competition, he said.

Robi Axiata, the second largest operator, welcomes the data price regulation "wholeheartedly".

The telecom industry currently has regulations for voice products and services, but no price regulation for data.

"So, as long as data price regulation is brought for addressing the distorted competition landscape in the market, we would welcome it wholeheartedly," said Shahed Alam, chief corporate and regulatory officer of Robi.

"We urge the regulator to ensure measures so as to safeguard the interest of data users as well as operators as it would ensure sustainable investment and infrastructure for years to come," he added.

Abu Saeed Khan, a senior policy fellow at LIRNEasia, said before setting the maximum tariff rates for mobile data, the BTRC should publish the impact of the "one country, one rate" policy introduced for broadband internet services.

"It is a must. We have to know the opinion of the broadband customers and operators first. So, the BTRC should publish the study as a white paper after conducting it," he said.

The BTRC should then hold a public consultation before imposing a uniform data rate for mobile operators, he added.