Glut of IGWs, ICXs to trigger unfair practices

[CaPtAiN_pLaNeT]

]Orangebd
Dhaka Saturday April 7 2012
Glut of IGWs, ICXs to trigger unfair practices
Experts oppose granting too many licences


http://www.thefinancialexpress-bd.com/m_more.php?news_id=125872&date=2012-04-07

Md Jamal Uddin

Issuance of a large number of gateway licences may jeopardise the business and force them to resort to irregularities for survival, say industry insiders.

At present four international gateways (IGWs), three interconnection exchanges (ICXs), and two international internet gateways (IIGs) are in operation in the country.

However, process to offer fresh licence to 25 IGWs, 21 ICXs and 39 IIGs to provide international call transfer and interconnectivity service, and sell internet bandwidth is now in final stage.

Telecom experts think the operators will not be able to sustain by earning meagre revenue, which will not be more than 3-4 per cent each, and they will be obliged to choose alternative ways to offset their loss. Even, the operators might be involved with illegal VoIP (voice over internet protocol) business to survive.

They said already some companies, expecting to obtain licence, are thinking to form consortiums to survive in business.

According to the telecom regulator, around 45 million minutes of overseas calls on an average are divided among existing four IGW and three ICX operators per month. But after awarding new licences, the calls will be distributed among 26 IGW and 21 ICX operators.

Two IIGs sell bandwidth to fifteen big internet service providers (ISPs). But soon 38 IIGs will sell bandwidth to the same ISPs. Bangladesh consumes 24 gigabytes of bandwidth.

Already 73 new entrepreneurs, including 22 IGWs, 18 ICXs and 33 IIGs, have submitted their licence acquisition fees, totalling around Tk 4.16 billion, for three licence categories.

Besides, nine more entrepreneurs are waiting to submit fees. The rest three will not get licence, said Bangladesh Telecommunication Regulatory Commission (BTRC) director general (legal and licence) Shahiduzzaman.

The BTRC chairman told the FE that the country's gateway market was so small that the new licence-holders would face serious competition, and some of them would not be even able to start their operations.

However, the telecom ministry earlier said the objective of issuing more licences in the sector is to create 'a competitive market.'

"The operators, which will provide quality services, will do business, and others will quit in phases."

Managing director of Fibre@Home Moynul Haque Siddique, who applied for an IIG licence, said, "The government could issue new gateway licences, but the market is not appropriate for 82 licences".

"I urge the government to review its decision, otherwise it will create anarchy in the sector," he told the FE.

Executive vice-president of Robi Mahmudur Rahman thinks that the government could issue some licences in the sector. "But it should not be too much."

"We have to face bureaucratic tangles in signing agreements with a number of licence-holders," he said.

Iqbal Ahmed, director and chief executive officer of HRC Technologies Ltd, who applied for an IGW licence, said his company will re-think about investing in the sector. Because, it will have to pay Tk 150 million as licence acquisition fee, Tk 75 million as bank guarantee, and then Tk 75 million as annual fee.

Sumon Ahmed Sabir, senior vice-president of Internet Service Providers Association of Bangladesh (ISPAB), said the new internet gateways will require at least Tk five billion (500 crore) to buy equipments from abroad.

 

[CaPtAiN_pLaNeT]

Has the BAL government gone by that they are allowing 25 IGW, 21 ICX and 39 IIG more for such a small market. These are not like illegal VoIP business that just taking one room for rent and employing 2-3 people these sort of business can be done.

This good going business segment is gonna crash for sure... N 39 international Internet gateway? Even if we just gave up the 25 IGW n 21 ICX issue.... Is there that much client to serve them n it require 39 IIG?

It is true 60-70% of the international call still comes through illegal VoIP... But there is no way space for 25 IGW... It is quite predictable IGWs will start international call routing business along with introducing their own calling card business to sustain n remain in business, n some IIGs may sustain with the increase of Internet use n likely it will reduce bandwidth price but not all will be able to survive. But there is no way space for 21 ICX as they have no place to increase their business. Government charge 3-4 cent per minute call but through illegal VoIP it cost only 1.3 cent. So if government do not reduce call rate illegal VoIP remain popular ... N if government reduce rate it will reduce revenue for the IGWs n will make it difficult for them to survive. N the way Internet calling is becoming popular it is interesting to see how these IGWs will survive in the coming days n ICXs as well.

Another party favored scum by BAL like the license giving to 15 new bank to party members.

 

[TopCat]

Anybody wanting license should be awarded with so. Doing business is a different ball game. Who cant survive will go out business. Whats the big deal? Those applied for license should do a throrough financial analysis before going to operation and they know how to do that. I myself did comparative studies for ICX and found that still it has a handsome return and all 21 of them will make money. There is no question of loosing for sure.

 

[scholseys]

its a survival of the fittest in Bangladesh, 15 new banks and there will be more. More ICX and more IGW will be given. Its all about lobbying, with the right lobby you can get anything in Bangladesh. Regulations are just a hurdle.

 

[CaPtAiN_pLaNeT]

Anybody wanting license should be awarded with so. Doing business is a different ball game. Who cant survive will go out business. Whats the big deal? Those applied for license should do a throrough financial analysis before going to operation and they know how to do that. I myself did comparative studies for ICX and found that still it has a handsome return and all 21 of them will make money. There is no question of loosing for sure.

Your perception is not true. This is not about survival but will reduce the profit margin of others even if it get very low volume and eventually will downgrade the telecom sector and salary structure of the employee.

There should be a certain limit for awarding these contracts... Otherwise you know there is a bengali proverb "Oti sonnasite gajon noshto". As you do Awami league so you may not agree with it but this is true n reality. Only time will say what is going to happen. But as I said voip cost only 1.3 cent where as government charge 3-4 cent ... so even if government provide 100 license situation will not improve as people and foreign carriers will still prefer illegal voip.