BTRC still continues ‘revenue losing’ formula

The government of Bangladesh has incurred massive revenue loss with a reduction in incoming overseas call charges and the introduction of a revenue sharing formula by the regulatory body.

Still, the Bangladesh Telecommunications Regulatory Commission (BTRC) has extended the timeframe for following this method by yet another year.

btrcIn a letter signed on 16 March by BTRC’s system and services department director Lt. Col. Zulfiqar Ali, it was instructed that this system would remain in operation until further notice.

The letter stated that the international call termination rate (ICRT) and the stockholder revenue sharing formula in this regard, would remain in force on a test basis.

The people concerned are criticising the BTRC for extending this system thought it is still just on a test basis. Their question is: in whose interest is the BTRC going ahead with this system, knowing full well that the government is incurring a huge financial loss?

On 18 September last year, directives were issued to reduce international incoming call rates from three cents per minute to one and a half cents. The BTRC, along with this, also re-determined the revenue sharing structure with the gateways. The BTRC’s directives stated, this formula is temporary and will be in effect on a test basis for six months.

According to the model, 40% if the revenue from the calls would go to the BTRC, 20% to the international gateway (IGW) services, 17.5% to the interconnection exchange (ICX) services, and 22.5% to the access network services (ANS). Previously this rate had been that the BTRC would get 51.75%, IGW 13.25%, ICX 15% and ANS 20%.

All overseas calls come through IGW. Then through ICX these go to the concerned operator or ANS. The operator connects the subscriber to the call.

Government loses Tk 4.12 billion

Over the past five months, revenue in this sector has fallen by Tk 4.26 billion. Of this, though BTRC made Tk 4.12 billion in losses, the IGWs made an over 53% profit.

According to the BTRC records, from March till September in 2014, incoming international calls amounted to approximately 8.58 billion minutes. After the calls rates were reduced, in the five months from September to February, calls increased by 5.04 billion minutes. As the BTRC’s revenue part was lessened, it is losing a large chunk of revenue. In the previous model, in five months the BTRC’s revenue income was Tk 10.66 billion.

Yet in the next five months the BTRC’s revenue income was Tk 6.53 billion. Revenue income of INS and ICX has also fallen in this model. ICX revenue has fallen by over Tk 230 million and INS by over Tk 440 million.

This model with reduction in the call rate and revenue sharing was introduced when controversial leader Abdul Latif Siddiqui had been the minister for telecommunications and IT. At the time, concerned persons had protested that these changes were being brought about in the interests of the IGWs.

However, the model went into effect with the approval of prime minister Sheikh Hasina.

The logic shown for the incoming international call charges to be reduced was that it would stop illegal VoIPs. Though incoming calls doubled, illegal VoIPs have not stopped. The BTRC’s decision to set up a centralised monitoring system (CMS) is also hanging in limbo.

One thing is clear from the records of the number of calls, revenue income, The BTRC’s revenue and other details over the past 10 months. The number of calls has increased, but all sectors have incurred losses in the process, except for the IGWs. The government has incurred significant losses.

An condition of anonymity, several officials of the BTRC told Prothom Alo, the BTRC did not review this model even though large sums of public funds have been lost. That indicates that despite billions of taka in losses, they are maintaining this model in the interests of certain quarters.

However, two senior officials of the BTRC, in favour of this model, said, every day the number of international calls is increasing. If this model continues, the government’s revenue will increase and the losses will be covered. It was on this reasoning that the system was extended further.

Despite contacting the BTRC chairman several times on this issue, he refused to comment.

-Prothom Alo