Bangladesh to open international gateways

03 Oct 2007

In a bid to further deregulate the country's telecoms sector, the Bangladesh government has decided to open international gateways (IGW) to the private sector.

The government announced in August plans to award licenses for three international gateway operators as a part of much-awaited International Long Distance Telecommunication Services policy brought out this year, which legalizes VoIP.

The Bangladesh Telecommunication Regulatory Commission (BTRC) was to call for proposals in September and award licenses in a competitive bidding.

To ensure optimum revenue, the telecom authorities have also decided to award licenses for two interconnection exchanges from where mobile and fixed-line operators will send and receive calls and separate CDRs will be kept to reconcile accounts.

A study by the GSM Association showed that the average international call prices in countries liberalizing IGWs fell by at least 31% with partial liberalization and as much as 90% in the years immediately following full liberalization. Prices for other international services such as international leased lines also fell, the study found.

Under the new policy only local companies can apply for the licenses, which means foreign service providers won't be eligible to take part in the bidding. In addition, non-resident Bangladeshis won't be eligible for the licenses.

The government also will issue two internet exchange licenses to the private sector. Only Dhaka and Chittagong will have an exchange to provide access network service operators with data services.

Breaking the monopoly

The country's international gateway has been controlled by the state-owned Bangladesh Telegraph & Telephone Board (BTTB), whose monopoly has resulted in artificially high international call prices that have curbed demand for incoming and outgoing international calls. Analysts say this has imposed substantial economic costs on the economy and enabled BTTB to underinvest in its gateway capacity, which is insufficient to handle even current levels of demand between Bangladesh and international markets.

The high price of international calls has encouraged the growth of illegal business of call origination and termination over IP.

The government's new international telecoms policy strongly discourages the use of small aperture terminal or VSATs for private overseas communications via satellite.

'We will assess the justification of using VSATs on case-by-case basis and decide accordingly,' Manzurul Alam, chairman of BTRC, told reporters when announcing the new telecom policy. The regulatory chief said the IGW operators may use BTTB's backup link via satellite if BTTB's only submarine cable gets shut down.

The new policy has created a scene of disappointment among the incumbent telecom operators as all of them were barred from the new licensing regime for which they had long been waiting.
'We are very disappointed"&brkbar; as we were waiting instead to have a VoIP policy that was earlier decided that all calls be would routed through a common platform to ensure government revenue,' said a senior official of an ISP.

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