Beset by multiple challenges within today’s fragile global environment, governments around the world are ramping up national digital strategies as part of efforts to catalyze economic and social growth.
Policymakers and regulators are pioneering a path to greater connectivity and future ready ecosystems.
On the mobile front, the adoption of a competitive and market-based approach, used during the assignment of 4G spectrum in 1800MHz and 2100MHz earlier this year, has proved successful, raising more than USD898 million for the country . This assignment is especially timely, given soaring mobile internet traffic, necessitating that mobile network operators (MNOs) upgrade their network capacity. While this has proven successful, to move forward sustainably, a piecemeal regulatory approach may not be sufficient to achieve mobile-enabled digital inclusion in the country.
On the infrastructure front, the introduction of an independent tower sharing regime in 2018 has attracted high quality foreign investors into the country. Three (3) of the licensees are backed by strong international infrastructure players with access to global capital markets and bring with them expertise, technical knowledge and strong capabilities towards deploying infrastructure at scale.
The nation’s previously low tenancy ratio has significantly increased. This signifies that duplication of towers have reduced and an increase in MNOs confidence on relying on independent Towercos to manage their passive infrastructure, subsequently allowing them to focus on other areas of their businesses.
The BTRC’s push in promoting the growth and transparency of the tower sharing market by introducing Service Level Agreements amongst tower providers and MNOs to facilitate faster access negotiation is a laudable move forward which has played a significant role in advancing the country's burgeoning digital ecosystem.
The past 18 months have been challenging for Bangladesh's telecom sector. As the country grapples with the Covid-19 crisis, the importance of digital technology in sustaining connectivity has become even more apparent. Mobile connectivity has become a pivotal cornerstone for businesses, governments, and society to remain active amid the nationwide lockdown put in place to curb the spread of the disease.
Learnings from global markets show that independent Towercos, such as American Towers, Cellnex and Crown Castle, are pivoting to emerging technologies and innovation such as network virtualization, automation, and digitalization. These moves offer a deeper form of infrastructure sharing such as fiberized bandwidth services to the telecom tower, In Building Solutions (IBS), Network-as-a-Service (NaaS), edge computing and OpenRAN (the next generation of radio access networks), to name a few.
In addition, these mainstream solutions are capable of transforming MNOs’ capital expenditure to operating expenditure, easing the MNOs’ cash outflow pressure, and improving their ROIC (return on invested capital) in the long run, which in turn frees up capital for other focus areas.
Unfortunately, Towercos’ operations in Bangladesh are still confined to passive infrastructure models. Although this was relevant in 2018, the global trends we have described above necessitates that BTRC undertake some structural reforms to accommodate these dynamics.
Covid-19 is proving to be a game changer for most sectors, demanding extensive pandemic and post-pandemic recovery efforts presenting the perfect opportunity for reviewing and improving traditional approaches. Coupled with the fact that the nation is also preparing for 5G, this is the most opportune time for structural reforms within the towerco market. An overview of the country's tower market shows that no towerco has a disproportionately large share of the market, and there are no barriers to tower deployment for four major Towercos as they have strong capabilities and operational experience as well as a steady access to funds.
The changes in this global landscape and digitization needs proves as a good time for the country’s policymakers and regulators to calibrate progress and to deliberate new measures towards nurturing the development of a more competitive towerco market in Bangladesh. The current growth of Tower market is essential for the overall development of Telecom industry, not just to address the pandemic, but to prepare for the upcoming 5G.
The Bangladesh government and the BTRC are in an ideal position to consider a broad range of recommendations centered on measures to alleviate pressure on networks and ensure resilience, continuity, and growth of access to mobile services by consumers and businesses during the Covid-19 crisis and beyond.
Globally, tower markets are lightly regulated, with limited number of countries identifying towers as part of the relevant list of markets. In the limited countries where the tower market is identified as a relevant market (for periodic review) by its telecom regulators, MNO-owned towers have been included in the tower market definition.
Recommendations to deepen infrastructure sharing
Moving forward, some recommendations for structural reforms by BTRC to incentives infrastructure sharing and support network resilience and expansion include
• Liberalization of foreign ownership limits on tower sharing licenses to bring fresh foreign capital into the country.
• Merging of the scope of Nationwide Telecommunication Transmission Network (NTTN) and towerco licenses or to allow Towercos to own and operate the last-mile fiber to the sites supporting MNOs backhaul requirements.
• Facilitating removal of bottlenecks towards faster tower deployment.
• Reducing license fee of 5.5% to a level comparable to other markets.
• Evaluating existing licensees on their performance and potentially considering allowing more licenses.
• Ensuring the tower rollbacks are completed by 2023 by providing incentives for MNOs to rollback their towers.
• Not to introduce extreme measures such as SMP on tower sharing industry as the market is yet to mature, especially when MNO rollback commitment is yet to be fully unfolded
We believe these reforms will serve to dynamically advance infrastructure, as a focus on liberalization, and a flexible license regime will ease operations, and actively contribute to solidifying Digital Bangladesh's aspirations.
The current highly challenging scenario both highlights the pivotal role played by the BTRC in nurturing the communications ecosystem and presents an ideal opportunity to embrace innovation while working closely with key industry players in regulating the sector.