How tax pressure limits profits and investment in Bangladesh's telecom sector
Analysts say the strain is uneven, with only one operator maintaining relatively stable profits while others operate on thin margins or continue to post losses
Bangladesh's mobile operators face one of the heaviest tax burdens in the region, leaving most unable to generate sustainable profits despite decades of operation and large subscriber bases.
Industry data shows that after taxes, fees, spectrum charges and licence costs, operators retain only a small share of revenue, limiting their capacity to reinvest.
For most companies, profitability remains elusive, with little room to expand networks or improve service quality.
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Analysts say the strain is uneven, with only one operator maintaining relatively stable profits while others operate on thin margins or continue to post losses.
With voice revenues stagnating and operating costs remaining high, operators say the current tax structure offers limited scope for long-term planning.
Industry observers argue that although telecom services have become basic utilities, the sector is still taxed as a high-margin industry, constraining investment and innovation and raising concerns about future network quality and sustainability.
Banglalink: Losses after more than two decades
Banglalink remains the most affected by the tax structure. Even after 26 years of operation, the operator has yet to record a profitable year.
Despite holding around 22% of the market and serving about 40 million subscribers, the company posted a loss of Tk331 crore in the latest fiscal year.
An additional 2% turnover tax, imposed regardless of profitability, has further reduced cash flow.
Company officials say that after meeting tax, spectrum and licence obligations, little remains for network investment, forcing Banglalink to limit upgrades and expansion.
Robi: Profitable, but returns remain thin
Robi, the country's second-largest operator with nearly 70 million subscribers, reached profitability only after more than two decades in operation.
In the last fiscal year, the company recorded a turnover of Tk9,950 crore, but profits accounted for just 7% of revenue.
While growth in digital and enterprise services has improved financial performance, high taxes and spectrum costs continue to restrict reinvestment.
Robi says limited retained earnings affect its ability to invest in fibre backhaul, unified network management and improvements in 4G service quality.
Grameenphone: Profits under pressure
Grameenphone remains the only operator generating relatively strong profits, controlling about 46% of the market.
In 2024, it reported a turnover of Tk15,845 crore and a profit of Tk3,630 crore, slightly lower than its post-tax profit in 2020.
However, analysts note that even for the market leader, tax pressure has reduced reinvestment capacity.
Capital expenditure stood at around Tk1,830 crore in 2024, which industry observers say is modest given rising data consumption and growing network demands.
