Bonikbarta Exclusive

The mobile operators like Grameenphone, Robi, and Banglalink have seen significant business growth through mobile internet data sales. Over the past few years, these companies have reaped considerable profits from this sector. An analysis of their financial reports shows that the cost of providing one gigabyte of mobile internet data ranges from BDT 2.25 to BDT 5.25, with an average of about BDT 4. Grameenphone’s cost per gigabyte is BDT 2.26, while Robi Axiata’s cost is BDT 5.28. Although Banglalink’s financial report does not provide detailed information on data costs, industry insiders say its cost per gigabyte is similar to Robi’s.

However, the operators claim that the actual cost of providing mobile internet data is higher than the reported average of BDT 4. They argue that factors like regulatory fees, VAT, taxes paid to the government, spectrum purchase costs, service sales, marketing, advertising, revenue sharing with BTRC, and contributions to the social responsibility fund add to the total cost of providing internet services.

In recent years, the price of bandwidth purchased from International Internet Gateways (IIG) has decreased consistently, contributing to the expansion of internet services in the country. As data usage has increased, so has the number of broadband customers using services provided by various ISPs. Despite this, the majority of users still rely on mobile operators for internet access. The introduction of 4G technology has allowed operators to further expand data-based services. However, customers have raised concerns about being deprived and overcharged.

An analysis of Grameenphone’s 2023 financial report reveals that the company incurs seven types of expenses in managing its network. These include traffic charges, costs related to parts and services, salaries, service management, vehicle management, other operations and management, and fuel expenses. These are primarily linked to internet management. The total cost of these seven types of expenses amounts to BDT 31.04 billion.

Of this, traffic charges account for BDT 8.3 billion, parts and services cost BDT 1.66 billion, salaries amount to BDT 8.49 billion, service management expenses total BDT 2.99 billion, vehicle management costs BDT 321 million, other operations and management amount to BDT 2.96 billion, and fuel costs reach BDT 6.31 billion.

Over the year, Grameenphone’s subscription and traffic revenue amounted to BDT 156.33 billion. Revenue derived from voice, data, and messaging services, was collected from its customers. In comparison, the company’s total expenses were BDT 31.04 billion. Of the BDT 156.33 billion, data sales generated BDT 45.41 billion, while non-data revenue amounted to BDT 110.92 billion.

Data revenue accounts for 30.21 percent of the company’s total earnings. Out of BDT 31.04 billion, which is the company’s total expenses, 29 percent or BDT 9.31 billion is spent on data services.

According to operator sources, Grameenphone currently has 46.6 million data users. Each customer, on an average, uses 7.4 GB of internet data per month. Annually, Grameenphone users consume 4.14 billion GB of internet data. The price per gigabyte of data is BDT 2.26.

Cellular operators purchase bandwidth from International Internet Gateway (IIG) providers at a rate of BDT 130 to 150 per megabit per second (Mbps). These companies primarily buy speed from IIGs, selling it to customers as capacity. At a speed of 1 Mbps, the maximum amount of data used in a month is 2,592 gigabytes (GB). Based on this, the cost to operators per GB of data is BDT 0.05-0.06. However, accounting for a 30 percent loss due to disconnection and other factors, the actual data usage comes to 1,814 GB. Thus, the cost to operators for each GB of data ranges from a minimum of BDT 0.07 to a maximum of BDT 0.09. Additional operational costs are also factored in. A financial analysis of Robi Axiata Limited, another mobile operator, reveals a similar expense pattern. The company spent BDT 2.65 billion on equipment and services, BDT 4.85 billion on interconnection and roaming charges, BDT 17.87 billion on network operations and maintenance, BDT 4.53 billion on salaries and benefits, BDT 226.5 million on vehicle management, BDT 1.03 billion on software and hardware maintenance, and BDT 13.6 million on building management. In total, Robi spent BDT 31.17 billion on direct services.

In 2023, Robi earned BDT 92.17 billion from its customers, including BDT 39.90 billion from data revenue. The remaining BDT 52.27 billion came from non-data services such as voice calls, messaging, and other offerings.

The analysis shows that 43.28 percent of the company’s total revenue is from data-based services. Out of the BDT 31.17 billion spent, BDT 13.49 billion was on data services. During the year, Robi provided customers with 2.55 billion GB of data, resulting in a direct cost of BDT 5.28 per GB.

Additionally, these two companies incur significant expenses in other areas, with a large portion going to the government. This includes a 20 percent supplementary duty, a tax of BDT 300 per SIM card, 45 percent corporate tax, and a 5 percent duty on telecom product imports.

Moreover, operators must acquire spectrum from the Bangladesh Telecommunication Regulatory Commission (BTRC). In the last auction held on March 31, 2022, BTRC allocated spectrum worth BDT 106.45 billion. Such spectrum allocations are considered a major source of government revenue. Additionally, mobile operators are required to pay regulatory fees to BTRC and contribute to the Social Obligation Fund (SOF).

In 2023, Banglalink’s digital communication revenue from data and non-data sectors totaled BDT 60.54 billion, with data revenue amounting to BDT 21.71 billion. Non-data revenue was BDT 38.83 billion. The operator currently has 26.2 million data users and sold 1.67 billion GB of data to customers this year.

When asked about costs and internet pricing, Shamim Ahamed, Media and Communication Manager of Robi Axiata Limited, told Bonik Barta, “Robi will not comment on such irrational questions.” Grameenphone also declined to comment on the matter.

When asked about the difference between the cost per gigabyte of data and the selling price by cellphone operators, Professor Dr. BM Mainul Hossain of the Institute of Information Technology at Dhaka University told Bonik Barta, “We must bring these issues under accountability. Operators should charge customers in line with their expenses for data provision. But it should be at a reasonable level. They must disclose the relevant information to the public. Investors are running businesses, but why should there be secrecy? Operators must disclose their cost information. We have a regulatory body, and they need to clarify the situation to the regulators, including how much the costs are and how they are incurred. If necessary, the regulatory body will set the prices.”

In the past year, customers have reduced their use of cellphone talk time. Industry insiders say that people are now easily communicating through data-based apps like Messenger, WhatsApp, Skype, Imo, Zoom, Meet, and LinkedIn. These apps allow easy texting, voice calling, and sharing of photos and videos. These encrypted apps are also cost-effective. As a result, users are prioritizing them over talk time and SMS.

Asked for his opinion, Fahim Mashroor, CEO and founder of BDjobs.com and an information technology expert, told Bonik Barta, “We have already discussed mobile internet data pricing. We’ve submitted an informal proposal to the ministry. We are discussing how to restructure this sector better. Companies are setting high prices to collect additional profits. These prices must be lowered.”

He added, “Operators focus more on cities but ignore villages. As a result, 4G services in rural areas are inadequate, leading to a large amount of unused data by the operators. The cost of this unused data is passed on to the customers.”

According to data from the Bangladesh Telecommunication Regulatory Commission (BTRC), operators sold 155.33 billion ‘on-net call minutes’ through their own networks in the 2022-23 fiscal year. The previous year, the figure was 163.74 billion minutes. This indicates that telecom operators sold 8.41 billion more minutes in the 2021-22 fiscal year. In the 2020-21 fiscal year, customers used 167.99 billion minutes of talk time. This shows a decrease of 4.24 billion minutes in 2021-22 compared to 2020-21.

Similarly, the use of SMS has also dropped. In the 2022-23 fiscal year, customers sent 18.91 billion SMS domestically, compared to 25.99 billion the previous year. This indicates a reduction of 7.09 billion SMS. In 2020-21, customers exchanged 30.39 billion SMS, which was 4.40 billion more than the following year.

In contrast, internet users have increased over these three fiscal years. In the 2022-23 fiscal year, there were 129.4 million internet users in the country, up from 126.2 million in 2021-22 and 120.9 million in 2020-21.

When asked about the overall situation, Nahid Islam, the Interim Government’s Adviser on Posts, Telecommunications, and Information Technology, told Bonik Barta, “Discussions about telecom operators’ data and talk time prices have been ongoing for a long time. Our general customers are also frustrated with the high internet prices. We will soon begin working on determining a reasonable price for the internet.”