A High level Analysis on Bangladesh Telecom Market in the context of Competition Regulation

1. Bangladesh Telecom Market
An analysis in the context of Competition Regulation and Law
Mohammad Tamjeed Siraj
May 2018

2. Telecom Market Scenario in Bangladesh
MOBILE OPERATOR
SUBSCRIBER (IN
MILLIONS)
Market
Share
Grameen Phone Ltd. (GP) 66.466 44.6%
Robi Axiata Limited (Robi) 45.595 30.6%
Banglalink Digital
Communications Limited
32.720 22%
Teletalk Bangladesh Ltd.
(Teletalk)
3.988 2.8%
Total 148.769 100%
POPULATION 170 MILLION
PSTN LESS THAN 1 MILLION
MOBILE 150 MILLION
INTERNET 83 MILLION
INTERNET
OPERATOR
SUBSCRIBER
Mobile
Internet
77.495
WiMAX 0.086
ISP + PSTN 5.560
Total 83.141

3. Market Scenario in terms of Competition
• Land phone penetration is very low till today
• Mobile phone is the ultimate tool for communication service
• Mobile Telephone service is the major players both in voice and
Internet service
• In terms of competition, that is only present in Mobile Sector
• Most of the Mobile Network Operators (MNOs) have entered to the
market after 1997
• Till then, Telecom Penetration has increased due to the competition
in the private sector,
• In Bangladesh Market MNOs are competing each other
• Telecom Regulator is now considering to formulate a Competition
Regulation for this sector

4. Attempts to introduce Competition Regulation
Year
Competition Act
(National)
SMP Regulation
(Sector-specific, for Telecom)
2009 -
• BTRC engaged ITU consultant on SMP
regulation
• MNOs participated in consultation
2011 - • BTRC drafted SMP Regulation in June
2012
• Cabinet passed the General
Competition Act, which seems a
standard one
• Correspondence continues between BTRC &
MoPT
2015 -
• The issue came to surface again in Mar 2015
• MNOs submitted their position paper to
BTRC & MoPT
2016-17
• Competition Commission is yet to be
formed
• Some MNOs pursued for SMP Regulation
• SMP regulation was again in discussion of
BTRC
BTRC : Bangladesh Telecom Regulatory Commission, The Telecom Regulator
MNO : Mobile Network Operators
MoPT : Ministry of Post & Telecommunication

5. Purpose of Competition Regulation
To maintain sustainable market through competition to ensure optimal benefit of the consumers.
It controls merger of enterprises and prohibits:
o Anti-competitive behaviour by the market players
o abuse of power of a enterprise in dominant position
The ultimate goal of competition laws and regulations is to promote competitive behavior
among the market players so that consumers can enjoy best possible products and services for
the optimal price.

6. Type of Competition regulation
Sector Specific Regulation General Competition regulation
• When competition law is not
considered sufficient to promote
competition
• Regulations in advance (ex ante)
• Detailed (e.g. interconnection rates)
• Predictability for entrants
• Higher risk of regulatory failure
• Limited specificity / general
• No restriction in advance other than
threat of intervention
• Reactions after (ex post)
• Merger control (ex ante)
• Slow and time consuming
• Lower probability of miss specified
intervention
ex ante means regulation beforehand where the regulator takes a forward looking
approach and defines regulatory obligations in order to prevent future distortion of
competition.
ex-post means the traditional regulation of historical events. i.e. when the question of
whether an undertaking has a dominant position and if this dominant position has been
abused.

7. Purpose and Type of Competition Regulation
• Purpose of competition law:
– Promoting competition to secure efficient use of resources while protecting
freedom of economic action of market players
– International experience shows it contributes to growth
– Dominance/SMP not a problem – as long as it’s not abused
– Focus on efficiency in market regulation
• Sector competition regulation – like SMP - only where
– No (general) competition law exists, or
– For issues where general competition law deemed insufficient, termination being
a typical example

8. What is restricted by Competition Law?
Between Competitors: bid rigging, market allocation, syndication
With dealers or consumers: retail price maintenance, exclusivity
Exclusionary: predatory pricing,
Exploitative: discretionary conditions
To keep the market concentration within a certain limit.

9. A High level assessment of Bangladesh Telco Market
Parameters** Y/N
Dumping N
Exclusive dealing There are few
Barriers to entry N
Price Fixing N
Refusal to deal N
Limit Pricing N
Tying N
Resale Price maintenance N
Tariff BTRC regulates
Termination Rate BTRC regulates
**SMP determining parameters, EU

10. Does Bangladesh need SMP regulation for Telco?
There is adequate regulation…
o From High Level assessment it appears there is little scope to practice
anti- competitive behavior
o Adequate regulations already exist to ensure competition i.e. BTRA,
ILDTS Policy, Tariff & Service Directive. No scope for manipulation by
any market player.
o MNP would bring more competition & customers’ choice in the
market
Challenges in Market Definition in Digital age
o Telecom sector is converging & getting complex day by day- overlap
among service domains
o Clear definition & identification of “markets” are crucial for SMP
Regulation to be beneficial

11. Questions to be addressed while considering competition regulation
Definition of the market.
Is there segmentation in
the market?
Should fixed line voice
and mobile voice be
considered to products of
the same market?
Which recognized anti-
competitive behaviors are
present in the market?
Can they be eradicate by
a competition legislation?
Is the market price
sensitive or quality
sensitive?
Do operators lose
customers to one
another? Does that
happen due to
competition?
Should the quantitative
analysis of voice usage
rather than the number
of consumers or revenue
is required to monitor
market share?
Do the mobile networks
provide the same services
?
The level of regulatory
control on tariff and
interconnection charges
in Bangladesh.
Has the sector reached a
standard where we can
call it internationally
competent? How can that
be facilitated?
Has the operators
reached the highest
possible number of
people? How can that be
achieved?
Do mobile networks
bundle services to
restrain competition?
Can customers consider
all operators’ voice
service as of satisfactory
quality all over
Bangladesh?
The effect of
infrastructure sharing
model on the sector

12. Summary
• In Bangladesh Telecom Market, MNO are playing major role
• There is apparently no element which can allow any entity to sustain with anti-
competitive behavior
• There is General Competition Act, but no authority yet to oversee
• Telecom Regulator regulates the Telecom Market with different regulation and
Directives , however, there is no SMP regulation.
• A systematic approach can be taken to assess the market in case any sector
specific regulation is introduced

13. Thank You