Allow open market to fix the fibre network infrastructure gap

Only around 25%—30% of Bangladesh’s network sites are connected to fibre optic cables. Photo: Bloomberg

Fibre optic cables are considered the highways or expressways of the digital era. The narrow lanes of the old town in Dhaka won't work for this; we need eight or 10-lane national highways or expressways to facilitate the movement of digital traffic being generated by all of us every time we go online using our mobile phones, laptops, PCs, tabs, etc. 

Before we chart a path for the future, we need to have an honest assessment of the current situation.

We find Bangladesh way down at the bottom of the Fiber Development Index (FDI) ranking published by Omdia, a global analyst and advisory leader in the technology ecosystem. 

In 2020, Bangladesh ranked 81^st out of 81 countries Omdia assessed. In 2021, Bangladesh ranked 71 out of 81 countries; in 2022, we were ranked 69^th out of 88 countries; and in 2023, we ended up at 70^th position among 90 countries. So, it's fair to assume that whatever we have done in this connection has not been enough. 

Let's look at some facts. 

According to BTRC's published data in 2023, the country had rolled out around 1,53,000+ km of fibre network since the National Telecommunication Transmission Network (NTTN) license was introduced 15+ years ago. 

We practically had a duopoly by two private NTTN operators in this segment for nearly the entire tenure of the NTTN license. Only in 2019, the third private NTTN operator came into the picture. 

Regarding fibre quality, 78% of the total fibre deployed by the two private NTTN operators enjoying a duopoly was installed overhead, a substandard approach for delivering reliable 4G and 5G services. 

Besides, by forcing capacity-based pricing for fibre access, these NTTN operators had also pushed up the cost of fibre access by 3 to 7.5 times. No wonder, only around 25%—30% of the country's network sites are connected to fibre optic cables. 

Statistics on the quality of fibre cables are also quite telling. It has been observed that the site outage rate for fibre-connected sites is 4.32%, whereas the microwave-connected sites are only having 0.54% outage.

If we look at it from the customers' perspective, their main concern is quality and cost of service. On both counts, we see that the current NTTN regime is letting our customers down. Confronted with the dire state of affairs, we need to be brutally honest about how we go about solving this problem. 

It would be great to start the process of reform by asking ourselves some important questions.

Do we think a 2G era licensing framework—NTTN—can serve the nation in the 4G or 5G era? Are we where we need to be now concerning the strength of our fibre optic cable-based transmission network?  

Has the vision of framing the NTTN license been realised over more than 15 years? What is the investment roadmap of the existing private NTTN operators for the next 15 years? 

If there is any such roadmap, do we think that the projected investment is sufficient to plug the gap while supporting the nation's accelerated journey towards digitalisation?

The telecommunications sector has thrived in this country because of the open market policy adopted by the government. At one point, we had six mobile operators in this country—five of whom were multi-national companies with one state-owned operator. All of them competed hard against each other, reduced prices drastically in the process, and aggressively expanded their network and thereby business. 

When some of them couldn't sustain themselves in the competition, they folded their businesses and left the country. At no point did the authorities step in to protect the business interests of any operator. 

But in the case of NTTN, we have observed a very different approach. The licensing regime had been designed in such a way that by going against the industry norm all over the world, it put a complete bar on the mobile operators to lay their own fibre. 

So, in effect, this is a problem of our creation. Then comes the question—how do we solve the problem? 

The interesting part is that this is not a problem unique to Bangladesh. So, solving it will require us to assess how the rest of the world has dealt with it. Following a close scan of the global situation, we can safely say that rather than using protectionist regulations, the world has allowed the open market to solve this problem.

To begin with, let's lift all forms of restrictions that bar anyone with a strong track record in this domain from investing in this vital segment of our digital economy. 

Does it mean that we close down the local private NTTN operators—absolutely not! Let the market decide who can or cannot be part of this business. 

Our main consideration should be to facilitate massive investment into our fibre network infrastructure in the quickest possible time which helps in creating a robust, cost-efficient, and quality fibre infrastructure. 

If a local operator has the technical know-how and the ability to invest in this business, we should allow it by all means. 

Same way, if a mobile operator with foreign ownership or any other competent foreign investor is willing and has the know-how and the ability to invest, why should we try to stop them if their investment can solve our problem? 

However, choosing the right kind of investors is critical to having the desired impact. Many local and foreign investors may show their interest, but it's important to review their investment portfolio thoroughly to assess their know-how in this particular domain. Investment in fibre infrastructure is not an SME sector; it requires heavy investment, and the return happens over a long time. 

So without properly determining the investment appetite of the prospective investors, we shouldn't allow random investors to enter into this segment. It will eventually perpetuate the prevailing situation into eternity as they will struggle to source the funds to carry out the level of investment fibre infrastructure demands. If we can smartly choose the right investors, we can bounce back in the shortest time.

I hope we continue to have faith in the open market in fixing our fibre infrastructure with utmost piety. We now have empirical evidence of what happens when our trust in the open market is shaken. The sooner common sense coupled with a smart investor selection process takes charge of the situation, the better. 

Sketch: TBS

Niaz Mohammad Siddiqui is a seasoned strategic communication professional, currently serving as the General Manager of Strategic Communications at Robi Axiata PLC.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.