BTRC’s strong numbers mask governance, audit gaps

The Bangladesh Telecommunication Regulatory Commission (BTRC) has delivered strong financial and regulatory performance, but its high ranking in the latest state-body assessment also uncovers weaknesses in governance, accounting and financial controls.

BTRC ranked second among 30 state-owned enterprises and autonomous bodies in the fiscal 2023-24 performance evaluation, scoring 3.17 out of 4 and receiving a “Very Good” grade. Its performance was driven largely by profitability, revenue collection and policy implementation, while governance and financial reporting remained weak spots.

BTRC’s net profit rose 12.83% to around Tk4,328 crore during the year, while service revenue grew 6.92% to Tk4,414 crore. But the profit increase was also supported by steep cuts in satellite-related and administrative expenses, which together accounted for more than 40% of the rise in profit.

Revenue collection was another area of strong performance. BTRC collected Tk4,434 crore against a target of Tk3,555 crore, exceeding the annual target by around 25%. Its regulatory achievements included the Starlink licence, progress on the 700 MHz spectrum auction, four new private submarine cable licences and stronger action against illegal VoIP and unauthorised SIM use.

However, the assessment points to weaknesses beneath these headline results.

BTRC’s receivable collection period increased to 184 days, crossing the threshold for the lowest grade. Trade receivables stood at around Tk476 crore, while credit sales nearly doubled to Tk945 crore.

The regulator also faced declining utilisation of its network capacity. Bandwidth utilisation fell to 63.17% from 83.81% despite an increase in overall capacity, indicating that a significant portion of available infrastructure remains underused.

The audit findings are more concerning. Auditors issued a qualified opinion on the 2023-24 accounts, citing BTRC’s modified accrual accounting system, which does not comply with international accounting standards. The regulator also lacked a fixed asset register and could not fully explain a Tk532 crore negative capital expenditure fund.

Potential losses on deposits with Padma Bank were another concern, as no provision had been made against the possible loss.

BTRC’s five-member commission has no independent members and lacks audit and nomination and remuneration committees. Although the commission held 10 meetings and implemented 302 decisions during the year, board governance scored only around 69%, the weakest area of the assessment.

The findings highlight a clear gap between BTRC’s operational achievements and the strength of the systems supporting them. Strong revenue generation and regulatory delivery have placed the commission near the top of the performance table, but weaknesses in oversight, accounting and risk management remain.

The evaluators recommended forming audit, nomination and procurement committees, adopting international accounting standards, maintaining an updated asset register and making provisions for long-overdue receivables. They also called for greater transparency in service pricing, stronger cybersecurity and wider 5G and broadband coverage.

BTRC’s second-place ranking is therefore a positive measure of its performance, but the assessment also sets out a clear reform agenda. The regulator’s long-term credibility will depend on strengthening the governance and financial controls behind its strong headline results.