BTRC approves mobile operators to install device to transmit more data at lower cost

Infographic: TBS

Mobile operators can import and install data transmission amplifier equipment for their leased fibre optic networks to transmit more data at lower costs, the telecom regulator decided in its last commission meeting.

Each installation will require case-by-case approval from the Bangladesh Telecommunication Regulatory Commission (BTRC).

This decision marks a significant victory for mobile operators, who have long pushed for greater control over their network infrastructure.

Earlier in March 2021, BTRC banned mobile operators from installing Dense Wavelength Division Multiplexing (DWDM) equipment on their leased fibre lines, giving Nationwide Telecommunication Transmission Network (NTTN) companies an advantage in handling data transmission.

"DWDM technology can increase the capacity of fibre optic cables by 100 to 1,000 times – or even more – depending on the equipment's strength. If mobile operators can deploy DWDM on backbone fibre, their transmission costs could drop by around 39%," said Faiz Ahmad Taiyeb, special assistant to the chief adviser overseeing the Ministry of Posts, Telecommunications, and ICT.

"By relying on mobile operators, we reinstated the DWDM facility to them, allowing them to provide quality services at lower prices," he added.

The 2008 NTTN guidelines had separated fibre network operations from mobile telecom services. Mobile operators were not allowed to lay fibre cables unless no NTTN provider was available in a specific area. 

Over time, Fiber @ Home Ltd and Summit Communications became the largest NTTN operators, building nationwide networks by themselves and getting government fibre leased. The network is used by mobile operators and internet service providers.

Government organisations like Power Grid Company, Bangladesh Railway, and BTCL, which already owned fibre networks, later obtained NTTN licences. However, they primarily leased their fibre to NTTN companies or mobile operators.

To increase competition in the transmission sector, BTRC has now suggested that Railway and Power Grid create commercial subsidiaries and compete in the market.

Dispute over dark fibre

One major point of contention between mobile operators and NTTN providers has been accessing "dark fibre" – unused fibre cores in an optic cable.

Dark core fibre allows a commercial user to lease dedicated fibre cores for itself and pay a fixed rent regardless of how much data it transmits. On the other hand, the capacity model lets the NTTN operator ensure the needed data transmission capacity of its fibre and allocate it among commercial users for a higher revenue.

Mobile operators want to lease dark fibre at a fixed rate, which would reduce their costs. However, NTTN operators prefer selling capacity-based services, which generate higher revenue.

For years, Summit and Fiber @ Home Ltd refused to lease dark fibre to mobile operators, fearing revenue loss.

According to Summit Communications CEO Md Arif Al Islam, if mobile operators gain access to dark fibre and use DWDM, NTTN companies' earnings could drop by more than 80%. 

He argued that NTTN firms invested heavily in their infrastructure, relying on revenue protections under the NTTN guidelines.

On the other hand, mobile operators continue to push for a rule that would force NTTN companies to lease out dark fibre, allowing them more control over their networks and lower transmission costs.

"Dark fibre leasing should not remain optional for NTTN operators; they should provide all the services to their customers," Grameenphone Chief Corporate Affairs Officer Tanveer Mohammad told TBS.

He also wants the regulator to allow NTTN customers like mobile operators or ISPs to establish the last mile fibre as it would be "difficult for entities like Railway or Power Grid to set up subsidiary companies in a short time."

"The two decisions, if made, will allow mobile operators to provide better services," he said.

BTRC, however, did not make it compulsory for NTTN operators to lease dark cores of their fibre.

Echoing the views of many who see a winning track emerging for mostly foreign-owned mobile operators in their tussle with local players, Bangladesh Mobile Phone Customers' Association President Mohiuddin Ahmed expressed a desire to see a reflection of "the relief being offered to mobile operators."

"Customers need quality internet, voice call services at lower prices," he said.

Chief Adviser's Special Assistant Faiz Ahmad Taiyeb said, "We will bring a fine balance in the disputed matters. We are responsible for both breaking the NTTN duopoly and reducing the price of mobile internet."

"If the mobile operators do not show a good gesture after the DWDM facility, they will face different moves," he said.

"Transmission costs account for only a small portion of the total in the internet value chain — less than 10%. If the government wants to reduce prices, it should remove the 20% supplementary duty on mobile services, as more than Tk60 of every Tk100 paid by consumers goes to the government exchequer," said Fahim Mashroor, former president of the Bangladesh Association of Software and Information Services.

NTTN operators oppose the move

Fibre @ Home Chief of Government and Regulatory Affairs Abbas Farooq said the BTCL move is against the International Long Distance Telecommunications Services (ILDTS) Policy as it is not protecting the interests of the homegrown telecom entrepreneurs, encouraged previously.

"Leaving local investments unprotected, the entire value chain will be captured by foreign-owned mobile operators," he fears.

Faiz Ahmad Taiyeb said the top two NTTN operators' entire network was not out of their own investments. Influencing policy, they got a vast network of government fibre to use, created a business model cornering their customers. Also, most of their own fibre is overhead, which is not of "Telco-grade". It needs correction for robust 4G and 5G connectivity.

Telecommunication policy analyst Mustafa Mahmud Hussain told TBS it appears that the government and BTRC face pressure as mobile operators push for DWDM access, risking the collapse of a homegrown industry built under the ILDTS policy 2008 that broke mobile operators' monopoly and lowered internet costs significantly alongside empowering local investors.  

For years, experts blamed NTTN for high mobile internet costs, but mobile operators said that bandwidth is only 0.5% of their total cost.

Without proper technical review and cost modeling, shifting the backward linkage layers to mobile operators will risk market balance, fair pricing and, most importantly, the collapse of local industries, he added.

BTRC views it as a 'win-win'

BTRC Commissioner Brigadier General (retd) Iqbal Ahmed said, "Upon hearing from the confronting stakeholders, the BTRC is opting for win-win solutions eying an industry capable of fulfilling the future Bangladeshi users' needs."

"It may look like NTTN will lose business. I see enough business cases for them amid new technological solutions and fair competition," he told TBS.

For instance, he said, a regulator to protect the business interest of transmission investors as well as mobile operators is allowing a mix of dark fibre lease, bandwidth capacity rent and lambda businesses. 

"If one comes up with better transmission services at competitive prices, return on investment should be there," said Iqbal Ahmed. 

Sources said that BTRC will also be compelling mobile operators to take NTTN services in the areas where their existing fibre will expire.

Summit's Arif Al Islam said that mobile operators tactfully expanded their fibre network over the years despite regulatory prohibitions. "NTTN investors expect a regulatory oversight for all parties' adherence to the compulsions."

He said operators might do more business with NTTN operators leasing dark fibre. For instance, Bahon, Power Grid, and Railway. It will practically force all NTTN operators into the dark fibre leasing business despite lower revenue and profitability.

Bahon obtained its NTTN licence in 2019 and has been open to lease dark fibre.

However, Arif said transmission companies like his are capable of offering cost-effective solutions if mobile operators cordially enter into long-term business contracts with them.