Bangladesh's cellphone growth slows on new subscription regulation

22 May 2006
00:00

Bangladesh's rapidly growing cellular phone industry, which added 10 million subs and grew 144% in 2005, could see four million fewer new customer adds this year than the 10 million projected as a new subscription regulation is expected to drastically slow growth.

The new telecoms regulation makes it mandatory for all prospective customers to provide personal details, including a photograph, fingerprint and photo ID or a certificate issued by an elected public representative or a first-class government officer. Those who have passports, driving or gun licenses or other forms of photo ID, however, will not require the certificate. Existing customers have to comply with the new requirement to retain their subscriptions.

Bangladesh's four private mobile operators have asked the government for an extension to the May 15 deadline to complete registration of around 12 million existing customers. The total cost of the process is estimated at around $80 million, with the bulk of the costs to be covered by the operators.

The Bangladesh Telecommunications Regulatory Commission (BTRC) issued the directive to tighten up security after a spat of bombings late last year. The government in December amended the Bangladesh Telecommunications Act 2001 and passed an ordinance allowing intelligence and law enforcement personnel to tap the phone conversations of any individual.

Mobile operators said that since they started following the regulation at the end of February they have witnessed a sharp drop in sales of new subscriptions. 'It will be difficult to add another 10 million subscribers by the end of this year as the regulation has slowed down our sales by 30%,' Lars P Reichelt, chief executive officer of Banglalink, told Wireless Asia.

He noted that there may be only an additional six million subscribers rather than the projected 10 million.

Executives with different mobile operators said that obtaining all the relevant documents to complete a subscription form is a lengthy process. A senior executive at one cellco insisted that it's more difficult than obtaining a passport since finger prints are not required for a passport in Bangladesh.

Operators say they have no problem with registering existing and new subscribers, but the government has pushed the industry to register the 12 million existing subs in just two months, said Abu Saeed Khan, an telecom analyst. 'Such an impractical deadline, by any standard, reflects the government's lack of comprehension of the entire process. Can the government reconstruct the database of 12 million passport holders‾' Khan asks.

'Such a regulatory barrier will impede the growth of mobile in a market where 10% penetration is yet to be achieved. It is an example of a widening of the digital divide through impractical regulations,' Khan added.

Regulatory officials said that the BTRC is considering allowing operators more time to complete the process. 'We understand it is tough for them, but they now have to comply,' said one BTRC director, who asked not to be named.

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