Infrastructure sharing in Bangladesh: Bottlenecks and way forward

Abu Saeed KhanSenior Policy Fellow, LIRNEasia

@ Westin, Dhaka. April 20, 2014

Bangladesh in regional ICT Development Index (IDI)

Source: Measuring the Information Society 2013, ITU.

Bangladesh: Improved in ranking, yet remains at bottom of the list.

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Monthly median IP Transit prices (10GE) per Mbps (Q2 2013)Source: TeleGeography

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7

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$1.6

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$1.7

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$1.2

8

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Two solutions: Diversify, keep diversifying!

Poor diversity

Exceptions

Submarine networks = Terrestrial networks

Courtesy: Ciena

Evolution of technology = Evolution of policy

International Internet bandwidth (Mbps) consumption in South Asia

Country 2005 2006 2007 2008 2009 2010 2011 2012 2013

Bangladesh 172 348 642 1,264 3,637 7,148 13,647 22,083 38,085

Bhutan 7 22 30 75 116 330 485 640 940

India 8,178 16,201 35,682 76,612 193,993 335,858 649,977 914,086 1,265,928

Nepal 35 41 85 199 1,085 1,775 4,865 7,960 12,300

Pakistan 1,234 2,555 4,852 9,014 29,079 58,939 104,920 136,695 195,325

Sri Lanka 496 688 1,045 2,453 4,465 10,661 21,032 33,070 53,244

Notes: Figures represent Internet bandwidth connected across international borders. Data as of mid-year.Source: TeleGeography

South Asia: Gbps Club of >1.5 Tbps (2013)

Country*(IDI rank) 2005 2006 2007 2008 2009 2010 2011 2012 2013

India(121) 8,178 16,201 35,682 76,612 193,993 335,858 649,977 914,086 1,265,928

(82%)

Pakistan(129) 1,234 2,555 4,852 9,014 29,079 58,939 104,920 136,695 195,325

(13%)

Sri Lanka(107) 496 688 1,045 2,453 4,465 10,661 21,032 33,070 53,244

(3%)

Bangladesh(135) 172 348 642 1,264 3,637 7,148 13,647 22,083 38,085

(2%)

*Source: TeleGeography. Figures represent Internet bandwidth connected across international borders. Data as of mid-year.

ICT Development Index (IDI) global rank: Measuring the Information Society 2013, ITU.

The

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Mobile launched in 1997: Telcos didn’t have fiber transmission*

Investing in Different Network Layers

>US$

400

mill

ion

inve

sted

OFC TX networks in Bangladesh

Source: BTRC website (Retrieved on April 19, 2014)

Revised Infrastructure Sharing Guidelines

Missed the opportunity of open access

2008

2011

Original and amended telecomInfrastructure Sharing Guidelines

Optical fiber TX and Access have been dropped

From competition to captive market

Impact analyses of amended guideline• NTTNs not necessarily own fiber infrastructure. Yet, they are

exclusive providers of transmission services. – Public sector monopoly (BTCL) and private sector duopoly (Two NTTNs).– BTCL also operates access and gateways.

• Airtel and Robi.– Increased operating costs and slower network rollout.

• Grameenphone, Banglalink and CityCell– Investment (>US$ 400 million) under jeopardy.

• The entire telecom sector– Reliability and affordability of fixed and mobile broadband is compromised.– Discouraging for foreign investments in infrastructure development.

Mobile industry wrote to MOPT (July 20, 2011)

ISP Association wrote to MOPT(October 16, 2011)

Barrier to affordable broadband (Digital Bangladesh?)

Wasted the opportunity of open access

Perfect candidate for open access (Domestic and International)

State-owned PTTClosed access

Open access is not a stranger to Bangladesh Government

Political goodwill for needed for technical imperatives

Courtesy: Ciena

Internet’s infrastructure fragility and cost

Tweet from Renesys on November 16, 2012: “BTCL, Mango down. Fiber@Home uses terrestrial conx to India, Link3 stays on satellite up.”

Routine maintenance of

SMW4 on January 23,

2013 20:14 to 21:53 UTC.

BTCL and Mango are

completely offline during

the downtime.

1Asia, Aamra, NovoCom and

Fiber@Home experienced

increases in their traffic as

customers automatically

shift traffic to the surviving

connection.

Bangladesh is among 10 emerging countries hot on the heels of the BRICS (March 26, 2014)• Coface identifies only 10 "new emerging" countries which

meet all the criteria. However, these countries are not the same in terms of their business environments - the weaknesses of which can stifle growth. This leads Coface to distinguish two groups in the "new emerging" countries:

– Colombia, Indonesia, Peru, the Philippines and Sri Lanka have a sound business climate (A4 or B), similar to that of the BRIC countries today.

– Kenya, Tanzania, Zambia, Bangladesh and Ethiopia have very difficult (C) or extremely difficult (D) business environments which could hamper their growth prospects.

Source: Coface press release.

A note of encouragement

• Naturally, it will be more difficult for the second group of countries, who could take longer to fully realise their growth potential.

• However, their business environment problems are relative: in 2001, the quality of governance in Brazil, China, India and Russia was comparable to that of Kenya, Tanzania, Zambia, Bangladesh and Ethiopia today.

Julien Marcilly, Head of country risk at Coface.

Next steps in telecom: Back to basics• Restore Infrastructure Sharing Guidelines of 2008.

– Be technology-neutral. – Encourage active infrastructure sharing.

• Unbundle BTCL’s transmission from access networks.– Ensure the ITCs access to SASEC network.– Explore Structural Separation of private networks.

• Unified Licenses with Open Access for NTTNs.– Reduce regulatory fees. – Tax-incentive for co-locating data centers.

• Foreign carriers to trade IP Transit in Bangladesh– Declare BSCCL as a Facilities Based Operator.

• Issue more Facilities Based Licenses.

Today’s policy shapes tomorrow

Picture: The Daily Star