Nurturing a telecom ecosystem that enables innovation and builds confidence for foreign investment

Across the world, countries that have successfully optimized their digital economies share one common foundation in the form of strong, scalable, and reliable connectivity. Industry evidence shows that mobile networks are not merely a communications layer but an economic platform. GSMA estimates that mobile technologies and services contribute around 5.8% of global GDP, generating $6.5 trillion in economic value. The International Telecommunication Union has also repeatedly emphasized that broadband infrastructure is the backbone of digital transformation, enabling digital services to function reliably at scale.

Bangladesh is no exception with its telecom infrastructure being the primary channel through which digital services now shape daily life and productivity. From mobile financial services (MFS) to e-commerce, ed-tech, e-health, public service delivery, and the growing startup ecosystem, connectivity supports nearly every dimension of modern economic participation. According to the Bangladesh Bank, registered MFS accounts stood at 239.3 million in January 2025, illustrating the scale of reliance on mobile networks.

This is why telecom policy cannot be viewed as a sector-specific issue. When connectivity improves, the benefits cascade and in 2026, this responsibility will be further amplified. Bangladesh is entering a moment of heightened ambition with a new government and a digitally fluent youth population that is more eager than ever to contribute productively to the economy. Today's young Bangladeshis are not just consumers of technology but innovators, entrepreneurs, freelancers, and skilled professionals competing in global markets. This creates a historic opportunity to build a policy environment paced with national aspirations and evolving consumer expectations.

In the past year, the telecom sector has seen several positive developments. Progress on a comprehensive licensing framework and updated quality-of-service (QoS) directives points to a more structured policy approach. Practical regulatory decisions, such as enabling voice over Wi-Fi (VoWiFi), allowing greater flexibility in service offerings, facilitating smartphone adoption through device-locking mechanisms and EMI-based purchases, and introducing international roaming packages priced in taka have also helped ease long-standing constraints.

However, the telecom sector's ability to sustain growth depends heavily on restoring what matters most for a capital-intensive industry, which is investment confidence. Telecom investments are made over long-term investment cycles, where predictability in policy and process is essential:

Getting the fundamentals right can translate into long-term investment confidence

The most significant barrier facing the telecom sector today is the heavy tax burden. Corporate income tax, VAT, supplementary duties, revenue sharing, social obligation funds, license fees, and spectrum-related charges together create a cost structure that is increasingly difficult to reconcile with global benchmarks.

In peer markets like India, Thailand, Malaysia, and Nepal, indirect telecom taxes range between 6–18%, while corporate tax rates fall between 20–35%. In contrast, Bangladesh's mobile network operators (MNOs) face an indirect tax burden of around 39%, alongside corporate income tax rates of 40–45%, placing the country well outside regional and global norms. Spectrum economics further reinforce this gap. GSMA estimates show that spectrum fees already consume approximately 16% of operators' recurring revenue and could exceed 20% in the coming years.

This is not simply a question of operator margins. The structure and scale of taxation directly shape the industry's ability to reinvest in network expansion, indoor coverage, service quality, and next-generation capabilities, ultimately affecting how quickly better services reach customers. 

The impact is felt directly by consumers. For every Tk 100 a customer pays on a mobile bill, approximately Tk 72 is passed on to the government and ecosystem partners. This includes Tk 25 in subscriber-related taxes (VAT 15%, supplementary duty 15%, surcharge 1%); Tk 14 in SIM tax, customs duties, and minimum/corporate tax; Tk15 through annual license and spectrum fees, revenue sharing (5.5%), social obligation fund contributions (1%), and spectrum amortization; and Tk 18 paid to other ecosystem partners. Despite these constraints, telco continues to invest heavily in nationwide connectivity. Since inception, Grameenphone alone has contributed Tk1,397bn to the national exchequer as of September 2025, equivalent in value to 78% of its revenue, reiterating telecom's role as both a digital enabler and a major contributor to public finances.

If policy objectives are to deliver better quality and experience, affordable services, and stronger digital inclusion, fiscal and regulatory frameworks must support the economics of long-term network investment as sustainable connectivity ultimately benefits customers first.

Reducing uncertainty through predictable and credible regulatory processes

Another challenge lies in the prolonged uncertainty stemming from irregular audit exercises, resulting in long-standing unresolved disputes. Currently, regulatory audits are conducted after long gaps without sufficient sector-specific technical expertise, leading to differing interpretations, recurring disagreements, and prolonged litigation. This is a procedural issue that can be addressed though regularized and standardized audit cycles under the technically competent oversight of globally recognized and specialized audit firms.

For investors, particularly in a sector with significant foreign ownership, market demand alone is not enough. Predictability, institutional credibility, and effective dispute resolution mechanisms are equally important. When disputes remain unresolved year after year, capital stays tied up, opportunity costs rise, and long-term investment decisions are deferred. Bangladesh has an opportunity to change this narrative through timely resolution using transparent and structured arbitration pathways.

Creating a level playing field across the connectivity ecosystem

Another issue that warrants attention is policy asymmetry across the broader connectivity ecosystem. In 2025, Wi-Fi traffic carried by Internet Service Providers made up approximately 64% of total data consumption. While Wi-Fi data volumes grew more than 23% year-on-year, mobile data saw a growth of 15% on industry level.

This divergence persists even as MNOs continue to bear the bulk of spectrum costs, QOS obligations, security requirements, and emergency service responsibilities. When different parts of the same ecosystem operate under materially different regulatory and tax frameworks, competition becomes distorted and incentives for long-term infrastructure investment weaken.

A more coherent taxation and regulatory framework would help balance the ecosystem, support healthy competition, and ultimately deliver better outcomes for customers.

Looking ahead to a resilient and customer-centric telecom future

An ideal telecom sector is one that is predictable, proportionate, and partnership driven. It is governed by clear, principle-based regulations; supported by rational taxation aligned with global benchmarks; enabled by timely dispute resolution; and treated as a national infrastructure priority. Such an environment does not benefit operators alone, it delivers reliable service, fair pricing, sustained innovation, and better outcomes for customers.

The task ahead is to ensure that change translates into confidence, for investors, innovators, and citizens alike. Because strengthening telecom is about building the digital backbone Bangladesh to nurture inclusive growth, boost productivity, and create a safer and smarter tomorrow.

The author is the Chief Corporate Affairs Officer of Grameenphone