Vol. 5 Num 418 Sat. July 30, 2005  

What's the telecoms regulator really doing?

Sudhir Mitra is one of the frustrated customers of Teletalk. In a "Letter to the Editor" on The Daily Star's July 27 issue, he described how the balance of his prepaid mobile account with Teletalk got "automatically" deducted when the phone was not used.

Sudhir has, however, mistakenly identified Teletalk as a public sector enterprise in his letter. Like many others, he seems to be unaware of the fact that Teletalk is, under no circumstances, a state-owned entity. Rather a group of civil servants, violating the service rules, personally own the entire Teletalk. It is just a privately-owned company.

Interestingly, the government has recently made Teletalk's one shareholder officer on special duty (OSD). This gentleman is retiring in September while another shareholder is retiring in August. Both of them, and eventually all shareholders of Teletalk, will be going home with the government's regular retirement package, coupled with Teletalk's ownership as an illegal bonus.

That is why Teletalk's formation as well as its operation as a cellular mobile service provider has been challenged in the court of law. The BTRC transfer of the mobile licence from BTTB to Teletalk has also been challenged in the same case and the details were published in The Daily Star's April 18, 2005 issue.

Sudhir's comments about the BTRC (Bangladesh Telecommunication Regulatory Commission) in the said letter is apparently derived from his gross dissatisfaction at the regulator's inaction about Teletalk's business practice. The four-year old regulator has been suffering from crisis of different sorts.

Mid-management officials of this very first utility regulator have never had the opportunity to act professionally due to temporary leadership. Its hierarchy has always been dominated by the retired civil servants. Despite having no clue about the rapidly changing telecoms industry, retired bureaucrats have been holding top positions in the BTRC for a three-year term.

The government may have been enjoying a great deal of psychological comfort by virtue of installing the preferred ones in BTRC. Such appointments have, however, been proven counterproductive due to lack of appropriate competency.

Here is one example. BTRC has to issue a "Code of Practice" pertaining to dispute resolution between the operators and aggrieved customers, per subsection 4 under section 59 of the telecoms law. Since BTRC has not done such a simple task, customers such as Sudhir Mitra have been suffering from the operators' wilful misconduct.

The BTRC top officials, being retired from civil service, are unable to elevate themselves from "Administrator" to "Regulator." They are not earnestly bothered about protecting the consumers' interest. Rather the amount of fees and charges being collected from the providers has become their key performance indicator.

Its collection-craze has now gone beyond any rational level. Now the regulator is asking annually Tk1,100 from the mobile operators for each handset, mind it -- handset, their customers use. It is like taxing a gasoline supplier for the vehicles that burn the fuel! Actually the regulator has inherited this idea from its predecessor.

The Ministry of Posts and Telecommunication (MOPT), then regulator, issued the GSM mobile phone operating licences to Sheba, GrameenPhone and AKTEL on November 11, 1996.

The licence mandates each operator paying an annual royalty of Tk 11,000 for each base station they install. It also directs the operator to pay Tk 1,000 royalty as well as Tk 100 licence fee for every mobile handset.

The new GSM mobile phone operators accordingly kept on paying annually Tk11,000 for each base station they install. The operators, however, started annually charging Tk 1,100 to each subscriber as licence fee cum royalty.

It continued until a customer filed a public interest litigation against GrameenPhone and the BTRC. The High Court Division stayed such "Taxtortion" (extortion in the name of taxation) for three months from November 27, 2002. The court also extended the stay for another three months, which expired on May 23, 2003.

While the final verdict remains pending, GrameenPhone suspended the petitioner's connection due to his non-payment of the Tk 1,100 annual licence fee and royalty of his handset. The aggrieved petitioner filed a contempt petition against GrameenPhone and the BTRC.

On July 20, 2003 the court ordered GrameenPhone to restore the connection without charging the annual licence fee and royalty. Final verdict of this case is still pending. Yet the BTRC began asking the GSM mobile operators to pay Tk 1,100 per annum per subscriber.

Egyptian telecoms giant Orascom had, meanwhile, acquired the ownership of Sheba Telecom in December 2004 and re-branded as Banglalink. It figured out that the BTRC has exempted Teletalk from such questionable licence fee and tax. The new entrant swiftly crossed sword with the regulator challenging such a deplorable discrimination.

Consumers have begun firing legal salvos into the shabby fortress of the establishment. This is the first time an operator has joined the battle. Hopefully the operators as well as the regulator will take a serious note of this development.

The writer is a telecoms analyst.