Fixed broadband at risk: BTRC’s proposed tax measures could hurt users and ISPs
After assuming office as Bangladesh Telecommunication Regulatory Commission (BTRC) chairman, Maj Gen (retd) Md Emdad ul Bari, known for his practice of listening to all stakeholders before making any decision, expressed his intention to lower internet prices, stating that they should be brought down to the cost of water to increase digital penetration.
He took multiple steps, from simplifying the complex licensing process and lowering bandwidth costs to ultimately reducing broadband prices.
For all latest news, follow The Daily Star's Google News channel. Though many users alleged they were still paying the previous prices and some broadband providers claimed they had recently doubled bandwidth while keeping prices unchanged, the initiative demonstrated a commitment to affordability.
However, in the proposed guidelines, which are part of the broader Telecommunication Network and Licensing Policy 2025, the internet regulator seems to take a complete U-turn.
The introduction of new taxation provisions by the BTRC to different licensing layers could increase costs for broadband service providers, potentially pushing up prices for end users and undermining the chairman's previous efforts.
On the other hand, the new "Regulatory and Licensing Guidelines for Fixed Telecom Service Providers" could have a significant impact on broadband internet providers, particularly small and mid-sized operators already operating with thin profit margins.
The most contentious aspect of the guideline is the mandatory 5.5 percent annual revenue sharing with the regulator, in addition to a one percent contribution to the Social Obligation Fund (SOF). Earlier, BTRC used to collect a SOF fee only from top ISPs. In the proposal, the charge applies to all, including small and medium providers.
While these provisions mirror those imposed on mobile operators, the two industries operate under vastly different market dynamics.
Unlike mobile operators, broadband providers cannot adjust their internet prices freely, as the internet regulator has imposed a price cap for broadband internet.
This restriction prevents providers from offsetting the new financial burdens through pricing adjustments. It could also erode profitability, forcing many small internet service providers (ISPs) to scale back operations, delay infrastructure expansion, or even exit the market.
Investment in network upgrades and service quality could also take a serious hit, as providers may struggle to expand fibre coverage or adopt newer technologies like Internet Protocol version 6 (IPv6) with reduced financial flexibility.
The cost pressure could also slow innovation in customer service and local content delivery networks, ultimately affecting user experience and internet speed.
According to the World Bank's "Digital Progress and Trends Report 2023," Bangladesh remains behind its regional peers in overall internet usage, smartphone penetration, and connection speed, despite notable progress in affordability, digital transactions, and coverage expansion.
The report, published in March 2024, shows that only 39 out of every 100 people in Bangladesh use the internet—higher than Pakistan (36 percent) but lower than India, Sri Lanka, and Nepal.
In terms of speed, the World Bank cites International Telecommunication Union (ITU) data showing that Bangladesh's average mobile download speed is 16.1 Mbps, while fixed broadband average is 36 Mbps—both below the South Asian averages of 26.7 Mbps and 43 Mbps, respectively.
However, according to experts, Bangladesh performs relatively well in broadband affordability, as a single broadband connection costs only Tk 400–500 per month.
The BTRC's recent proposals could undermine this sole advantage of low broadband prices in Bangladesh, where broadband internet penetration stood at 8.24 percent as of September, 2025. Fixed broadband contributes more to economic output than mobile internet does because it provides stable, high-capacity and low-latency connectivity, essential for digital industries, cloud computing, e-commerce, and remote work.
While mobile internet expands access, fixed broadband drives productivity and innovation across sectors. According to a research finding, a 10 percent increase in broadband penetration can raise GDP per capita by 1–1.5 percent, and research across the Organization for Economic Co-operation and Development (OECD) countries shows that doubling broadband speed can increase GDP by 0.3 percent. If broadband becomes more expensive or less accessible, these potential economic gains could be reduced, limiting Bangladesh's ability to leverage digital infrastructure for sustainable growth.
According to the ICT use survey by the Bangladesh Bureau of Statistics published in August, only 48.6 percent of individuals in Bangladesh use the internet, but just nine percent use a computer in the fourth quarter of fiscal 2024-2025. This indicates that participation in computer-based activities, which generally rely on broadband connections and contribute more directly to economic output, is already very low. If fixed broadband becomes less accessible or slower, the potential for growth in sectors that depend on high-speed, reliable internet, including e-commerce, IT services, and digital entrepreneurship, could be negatively affected.
However, the financial burden does not stop at broadband providers' revenue-sharing and SOF contributions. The BTRC has also proposed higher taxes on the international broadband supply chain and increased licensing fees across different categories under the new guidelines. These measures could lead to higher internet prices for both broadband and mobile internet users, making access less affordable.
The BTRC's new move appears rooted in its dual role as regulator and revenue‑collector. The experts have long been arguing that BTRC is increasingly functioning more like the National Board of Revenue than a sector‑enabler. The commission has shifted its focus from facilitating growth to imposing higher fees, revenue shares, and licensing burdens.
The regulator should revert to its foundational role, such as promoting competition, safeguarding service quality and easing market entry rather than prioritising tax‑like collections.
The fixed broadband sector in Bangladesh is already in a precarious state, partly due to the previous regime granting thousands of licenses without ensuring quality or capacity. If the BTRC seeks to streamline the sector through new levies, it risks burdening users and providers without addressing the root problems. A more effective approach would be to rationalise the number of licenses and cancel those held by operators who fail to maintain compliance or service standards.
For BTRC to function as a true sector regulator, it must prioritise improving service quality, fostering investment, and ensuring market efficiency rather than relying on fees and levies. Strategic innovation in licensing and enforcement would strengthen the broadband ecosystem without penalising consumers or responsible operators.
Mahmudul Hasan is a journalist at The Daily Star.
Views expressed in this article are the author's own.
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