Wahidul Islam
Dtech Bangladesh
Growth and the Gaps
Over the past two decades, Bangladesh has witnessed a remarkable expansion in telecommunication access. Mobile subscriptions surged from fewer than two million in 2005 to over 188 million by 2024, and internet penetration rose from approximately 25.6 per cent in 2018 to 44.5 per cent by 2024. The launch of 4G services in 2018 and the pilot deployment of 5G in Dhaka in 2024 nominally signal technological progress.
Yet these headline figures conceal a deeply uneven structural reality: the expansion has been overwhelmingly mobile centric, urban concentrated, and driven by private operators navigating a policy environment characterised by fiscal extraction rather than investment enablement. Fixed broadband penetration remains negligible, rural last mile connectivity is severely constrained, and the regulatory architecture has failed to keep pace with either technological convergence or the demands of a digital economy.
Government Steps Required but Not Undertaken
The most consequential failure has been the absence of a coherent and modern spectrum management policy. Successive governments treated spectrum primarily as a revenue extraction instrument, imposing astronomical fees and conducting auctions on terms that discouraged long term network investment. Spectrum refarming, essential for reallocating underutilised bands from legacy services to next generation networks, has never been systematically pursued. Operators have been forced to overlay new technologies onto fragmented and insufficient spectrum holdings, directly limiting network quality and coverage expansion.
The fiscal framework governing telecommunications has been equally detrimental. Bangladesh imposes some of the highest sector specific taxes in the Asia Pacific region on both operators and consumers. Supplementary duties on mobile services, VAT on internet usage, and a corporate tax rate for telecom operators that far exceeds the standard corporate rate have collectively drained capital that should have been reinvested in network expansion. Rather than recognising telecommunications as essential infrastructure meriting fiscal incentives, the government has treated the sector as a captive revenue source, a strategy that depresses investment and raises consumer costs simultaneously.
Licensing reform has been another critical absence. The license renewal process has been opaque, unpredictable, and procedurally arbitrary, creating regulatory uncertainty that deters both domestic and foreign investment. License periods remain shorter than the best global practice, and technology neutrality, the principle that operators should be free to deploy any standard within their allocated spectrum, has not been adopted. Infrastructure sharing, both passive and active, has never been formalised into policy despite its proven role in reducing deployment costs and accelerating rural coverage in comparable markets.
The failure to mandate and fund a universal service obligation represents perhaps the most consequential policy omission. Bangladesh has no enforceable mechanism to ensure that rural and underserved communities receive broadband connectivity. The Bangladesh Telecommunication Regulatory Commission has possessed the statutory authority to establish such a framework since its inception, yet the mechanism remains unimplemented, leaving last mile connectivity entirely to the commercial calculus of private operators for whom rural deployment offers inadequate returns.
Regulatory convergence has been equally neglected. As telecommunications, broadcasting, and internet services have merged technologically, Bangladesh has retained separate and often contradictory regulatory regimes. No unified regulator exists to govern the converged digital landscape, resulting in jurisdictional overlaps, policy incoherence, and enforcement gaps that inhibit both investment and innovation.
Reforms That Are Absolutely Essential Now
First, spectrum policy must be fundamentally restructured. Bangladesh needs transparent, predictable spectrum auctions with reasonable reserve prices, technology neutral licensing, and a systematic refarming programme that transitions underutilised bands to 4G and 5G deployment. Spectrum fees should be recalibrated to reflect their role as a tool of industrial policy rather than fiscal extraction.
Second, the fiscal burden on the telecommunications sector must be reduced to levels consistent with regional peers. Supplementary duties on mobile services should be eliminated, VAT on internet access should be removed or substantially lowered, and the corporate tax rate for operators should be aligned with the standard rate. Every taka extracted from the sector in taxation is a taka not invested in towers, fibre, and rural coverage.
Third, licensing must be reformed to provide longer license durations, transparent renewal criteria, and technology neutrality. License periods of at least twenty years, with predictable and formulaic renewal processes, would give operators the certainty required for long-term capital planning.
Fourth, a mandatory and funded universal service obligation framework must be established, financed through a transparent industry levy and disbursed through competitive bidding for rural broadband deployment. The current approach of leaving rural coverage to market forces alone has demonstrably failed.
Fifth, active infrastructure sharing must be formalised through regulation, including tower sharing, fibre sharing, and spectrum sharing, to reduce the capital intensity of network expansion and accelerate coverage in areas where duplication is economically irrational.
Sixth, the regulatory architecture must be restructured to create an independent, converged regulator with authority over telecommunications, broadcasting, and digital services, insulated from political direction and staffed with technical capacity rather than bureaucratic appointment.
Seventh, Bangladesh must accelerate the expansion and utilisation of its Internet Exchange Points. With only 7.5 per cent of registered networks currently peering at national exchanges, the vast majority of domestic internet traffic is routed through international transit, increasing costs, latency, and vulnerability. Incentives for local peering and the attraction of content delivery networks are urgently needed.
Eighth, the integration of satellite connectivity, including the anticipated Starlink deployment, must be governed by a clear regulatory framework that extends rural access without undermining the commercial viability of terrestrial operators who have invested billions in ground infrastructure.
The window for these reforms is narrowing. Bangladesh aspires to upper middle-income status and a trillion-dollar economy, yet its digital infrastructure lags behind the targets required to support that ambition. Without decisive and immediate policy action, the telecommunications sector will remain a constraint rather than an enabler of national development.
