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The mobile industry’s combined investment fell 19 per cent year-on-year to Tk 3,695.72 crore in 2019, the lowest in recent years, as the regulatory regime continues to spook the foreign owners of the top three carriers.
Mobile carriers are not investing adequately into their network, a development that is directly hampering their service quality and customers are getting substandard service, industry insiders say.
The scenario was totally depressing last year because of the restriction on the top players that prevented them from setting up new towers.
Under the new licencing regime, only dedicated tower companies can establish mobile network infrastructure; mobile operators are barred from getting into the business.
Mobile operators say the regulatory situation has become unbearable and if it persists, the country will suffer and customers are already suffering.
“Last year was a very dim year for investors,” said SM Farhad, general secretary of the Association of Mobile Telecom Operators of Bangladesh.
With the restriction on the two top operators — Grameenphone and Robi — coupled with the fact that the tower companies are yet to be operational, the carriers could not expand network during the period and this affected investment and service quality as well, he added.
Regulation is the single most important driver in the telecommunication sector, said Shahed Alam, chief corporate and regulatory officer of Robi, the second-largest operator.
“Any action by the regulator can have a positive impact or a dire impact.”
Robi has cut back on its investment the most last year: about 32 per cent.
In 2019, it invested Tk 1,421.3 crore and had planned to put in another Tk 1,200 crore but could not do so because of the regulatory restriction centring on its audit claims of Tk 867.23 crore by the Bangladesh Telecommunication Regulatory Commission.
Following a High Court order recently, Robi has paid two instalments of Tk 27.60 crore each to the BTRC and got no-objection certificate from the regulator after seven months, during which time its network expansion and maintenance came to a halt.
Robi’s investment previously surpassed all other telecom investors’, making it the leading foreign direct investor for five consecutive years to 2018, Alam said.
“It is unfortunate that regulatory actions disrupted our 2019 investment plan, pulling us and the industry down by a few years. It was an irrecoverable loss. We were unable to increase the capacity of our network or resolve the issues of customer complaints,” he said in a statement.
Robi requested for a more cohesive approach and the formation of a coherent industrial policy for the telecoms sector, so that it is able to provide much-needed boost to the vision of the government, in terms of investment ability, innovation adoption, network capability and attractive unit pricing, Alam added.
Grameenphone’s investment declined more than 13 per cent in 2019 from the previous year, while Banglalink’s investment grew 4.37 per cent.
Banglalink made significant investment in 2018 to purchase spectrum in order to roll out 4G, which ultimately resulted in an enhanced quality of service for customers, said Taimur Rahman, chief corporate and regulatory affairs officer of the company.
The country’s third largest carrier invested Tk 3,524.16 crore in 2018, which included the spectrum charges it paid for buying 10.6 MHz spectrum. Without the spectrum charges, the investment stood at Tk 776.61 crore in 2018.
“Regrettably, the less favourable regulatory environment made it challenging for Banglalink to invest in rolling out more sites recently.”
In 2019 it invested Tk 810.62 crore.
“However, we remain hopeful that the government will take our challenges into consideration and take necessary steps such as implementing the SMP guidelines that would encourage small operators to invest further in future,” Rahman said in reference to the rules on the significant market player.
Banglalink’s continued investment has allowed it to meet the growing demand from its customers for digital services, he added.
Market leader Grameenphone declined to comment.
The carrier has yet to get the NOC’s after depositing Tk 1,000 crore to the BTRC in line with a court order.
The telecom regulator imposed a bar on Grameenphone and Robi in July last year and the bar is still ongoing for the Norwegian Telenor Group subsidiary.
A major chunk of the investment of mobile operators goes into network expansion and building towers to improve coverage and service quality. Upgradation and maintenance of towers also require additional investments.
In order to make sustainable businesses, mobile carriers will have to invest an adequate amount to satisfy their customers, said Md Jahurul Haque, chairman of the BTRC, when contacted.
The telecom watchdog regularly runs the quality of service drive tests.
“We will punish operators if they fail to meet the quality. We will not go to find out how much they have invested or not — our main agenda is to ensure proper service to the customers.”
The operators are cutting back on investment and repatriating more sums, he said.
“This is a common trend among the telecom operators. This needs to be discussed.”
(TDS)
