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September this year to restrict monopolisation, aiming to ensure a
level-playing field in the rapidly growing Bangladesh telecoms
market. The telecoms regulator has followed the recommendations made
by International Telecommunication Union (ITU), the United Nations
agency for information and communication technology, which recently
reported on Significant Market Power (SMP) of Bangladesh's telecoms
sector. ITU also suggested identifying the operators, who hold SMP,
before finalising the regulations. An operator enjoys market power
when it can unilaterally set and maintain prices and other
commercial terms. ITU recommended setting upper and lower limits of
market dominance for a telecoms operator, to be judged on holding
SMP. In its report, ITU said in the context of Bangladesh, it favours
a market share threshold of 45 percent based on a range of factors,
including revenue, subscriber percentage, and if available, traffic
statistics consistent with global precedents. "If the Bangladesh
Telecommunication Regulatory Commission (BTRC) considers a lower
threshold of 35-40 percent to be set as the presumption threshold
because of a lack of detailed industry statistics, then it would be
supported," said ITU, suggesting a second option. Ever since debut in
Bangladesh, a few operators have dominated the telecoms industry.
Considering this, BTRC sought ITU advice on significant market power
issues. Later ITU undertook a project on SMP and recently submitted
its report to BTRC. Competition regulations are common to markets
around the world. "When a few operators have grabbed significant
market share, regulating competition is a must for all," said a BTRC
official. Competition regulations would apply to all, both private and
state-run operators," said the official. As per telecommunication
laws, BTRC is compelled to break monopolisation and anti- competitive
behaviour by operators. Competition policies may be implemented
through general competition laws or through competition enhancing
rules in specific sectors. The laws aim to promote efficient
competition by penalising or undoing conduct that reduces
competition in a market. BTRC would finalise the regulations after
consulting all telecoms stakeholders. Under regulations, operators
are prohibited from entering into agreements that provide for market
sharing, rate fixing, boycott of another competitor or supplier of
the telecommunications system or equipment, said the ITU. ITU said
the regulator may direct operators in a dominant position to cease a
conduct, which has or may have the effect of substantially lessening
competition in the market. The UN agency also suggested an independent
commission to maintain and promote fair competition, to prevent,
control or eliminate restrictive agreements among enterprises or
abuse of a dominant position. It said although the telecommunications
market in Bangladesh is characterised by a large number of operators
(particularly in the mobile sector), it remains highly concentrated.
In terms of subscriber base, Grameenphone has a 43.9 percent market
share, Banglalink 22.8 percent, AKTEL 18.4 percent, Citycell 4
percent, Warid 5 percent, TeleTalk 3 percent, BTCL 1.8 percent and
Ranks Telecom 0.3 percent, according to statistics updated at the
end of April 2009. BTRC sources said big operators are reluctant to
adopt such regulations in the market. "The big operator does pose a
predatory nature and it is already becoming imminent that the very
existence of small operators is in question because of this issue,"
said Ashraful H Chowdhury, general manager of Warid Telecom. He said
the regulator must enforce a level- playing field for the sake of fair
competition and existence in the long run. "Big operators in the
market enjoy advantages because of size and potential
anti-competitive nature," he said. However, Grameenphone, the market's
biggest operator, refused to comment in this regard at the moment.
