Promising but demands tuning

The BTRC’s draft reform of the ILDTS policy is a vital step toward a modern, future-ready telecom framework. After two decades of outdated licensing, this overhaul promises a more efficient, competitive, and innovation-driven sector. By phasing out ineffective licenses and addressing key inefficiencies, it sets the stage for meaningful, sustainable growth in Bangladesh’s telecom industry.

The draft allows Access Network Service Providers to interconnect without mandatory interconnect licensees which was a need 2 decades ago at the early age of multiple telecom players in the market but became redundant years ago. Also allowing deregulating TVAS and Vehicle Tracking Service is a good move. This will remove entry barrier for small tech entrepreneurs with innovation solutions to partner up with ANSPs to market their services to millions without regulatory paperwork. Allowing ANSPs to deploy last mile connectivity is also a move that will increase competition and competence.

The draft policy includes several noteworthy proposals, some of which deserve praise, while others warrant further scrutiny. Here are the key scrutiny requirements to be considered:

Harmonizing Foreign Investment Restrictions
The policy proposes 49% foreign ownership for International Connectivity Service Providers (ICSPs) and 70% for National Infrastructure & Connectivity Service Providers (NICSPs) while allowing 100% foreign investment in Access Networks. This disparity may lead to regulatory arbitrage, discouraging some international companies with both financial and technical capabilities to enter the market. To create a level playing field and attract sustainable foreign investment, the policy should consider removing ownership caps altogether and ensure that equity claims are genuinely reflective of foreign investment, not simply local loans masked as equity infusion.

Guarding Against Vertical Integration Abuse
One of the critical challenges of a rapidly evolving telecom market is preventing market dominance by a few large players. The draft policy correctly proposes a prohibition on cross-ownership, specifically barring entities holding ANSP or ICSP licenses from also holding NICSP licenses (7.99) But this should be clearly mentioned for each layer/class up to ownership level breaching corporate veils. Without strict cross-ownership restrictions, dominant players could leverage their position in one segment to stifle competition in others. A clear demarcation of service layers is essential to prevent anti-competitive practices . By allowing foreign owners of one licence to hold a licence in another layer (7.10.7) contradicts with this principle.

Avoiding Horizontal Integration Risks
In addition to vertical integration, horizontal integration must also be closely scrutinized. The policy should prevent the same entity from owning multiple Access Network Licenses. Allowing mobile network operators (MNOs) to hold both Fixed Telecom Service Licenses (FTSL) or National Global Satellite Operator (NGSO) licenses would risk unfair bundling practices, further marginalizing smaller players. Such consolidation could harm competition and reduce consumer choice. However, collaborative bundling can be considered on a case-by-case basis, with regulatory scrutiny in line with competition law.

The draft policy allows Cellular Mobile Service Licensees (CMSLs) to use both radio and wired access for enterprise services while it prohibits CMSLs from obtaining Fixed Telecom Service Licenses (FTSLs). This creates regulatory confusion and opens the door for potential market distortions. A clearer, more consistent approach would be to ensure a functional separation between wired and wireless services, preventing unfair competition and regulatory ambiguity.

NICSP License Class
The policy mentions that infrastructure companies will be required to provide services up to the union level. However, similar conditions were included in previous infrastructure licenses but were not effectively enforced. To address this, the licensing framework can be restructured into region-wise, limited licenses allowing companies to apply for as low as one to as high as all regions as long as they demonstrate the capacity to connect each licensed region down to the union level within a set timeline. This model can foster increased investment and promote competition by opening the market to capable new entrants.

Local Internet Distribution: Preventing Chaos
The draft proposes a system allowing grassroots internet distribution through simple enlistment. While this idea encourages local entrepreneurship, it risks regulatory laxity and potential compromises in quality. Instead, Fixed Telecom Service Licensees (FTSLs) should be allowed to partner with local entrepreneurs under a structured distribution model, ensuring both regulatory oversight and the encouragement of local innovation.

Inclusion of CDN and Cache Servers
The inclusion of discussion on Content Delivery Networks (CDNs) and local cache servers is a progressive step. CDNs play a pivotal role in enhancing internet performance by reducing latency and improving user experience. However, the draft policy lacks details on regulatory treatment of CDN operators. A dedicated policy on CDNs and related infrastructure would encourage investment by global content players in local hosting, promoting both performance improvements and digital sovereignty.

A sound policy balances national goals, investor confidence, and consumer welfare. BTRC’s draft shows promise in modernizing telecom regulations. If paired with enforceable quality standards and strong oversight, it could drive innovation, ensure fair competition, and lay the foundation for a truly future-ready telecom ecosystem in Bangladesh.

Abu Nazam M Tanveer Hossain: Public Policy Advocate