Neither operators nor customers are actually happy
Whenever all Robi user tops up Tk 100 for service, the National Board of Revenue is said to get Tk 27.50 from it seeing that surcharge, value added tax and supplementary duty and Tk 11.4 as minimum amount turnover tax and SIM tax.
Another Tk 14.4 would go to Bangladesh Telecommunication Regulatory Commission in the kind of earnings sharing and spectrum and licence service fees while Tk 18.2 to the ecosystem licensees, departing Tk 28.5 for the carrier.
These numbers were shared by Mahtab Uddin Ahmed, chief executive officer and managing director of Robi, on a Facebook live session over Monday evening.
There were about 1,000 concurrent viewers who also engaged in a question-answer session.
Using what was left, Robi must manage and extend its networking, bear staff salaries and work promotions and other bills, he explained, adding that it had been quite impossible to perform all these proficiently with this sum.
Ahmed also described media reports on the government's intent to increase additional supplementary duty on all kinds of mobile services by 5 percentage points in the upcoming national budget of 2020-21.
"If the federal government incorporates additional taxes with after that it it'll be unbearable for us to run the services," said Ahmed.
The services carry 15 % VAT, 10 % supplementary duty and 1 per cent surcharge.
The federal government has increased taxes on portable services consistently for the past few years and it had a direct effect on users, said Ahmed, also the president of the Association of Mobile Telecommunication Operators of Bangladesh (AMTOB).
"Definitely consumption and user numbers will not increase if the tax over utilization increases further. We likewise acknowledge that the federal government needs money to run the united states but how long can an individual industry be taxed?" explained Ahmed.
"With this tax structure we aren't happy and we can not make the clients happy."
He also asked customers to demand the government to bring down taxes on telecom offerings which would in the end help them reduce services costs and improve support quality.
Ahmed gave a display stating that the country's mobile operators were currently having to pay 53 % of their total income as taxes and service fees. He said this was the highest in the world. After that in line was Argentina and Pakistan at 38 per cent.
According to his display, the common tax on telecom offerings in the Asia Pacific place is 24 %, Latin America 18 % and Europe 21 per cent.
Ahmed said the audiences could go ahead to achieve the facts and quantities about investment, income and taxes examined to see if they were telling the reality.
"Thanks to the federal government that they have declared a vision to make Bangladesh a digital country but the tax policy on digital products and services is contradicting that vision, which needs to be revised," he added.
Bangladesh is a good land of opportunities and if policymakers may present the proper tax policies, even more operators will come over with huge amounts found in investments, he added.
"The telecom regulator offers tried to bring latest operators in Bangladesh in 2013 and 2018 but failed as a result of the tax policies," he said.
Once there have been six players but regrettably it came down to four and a great number of international investors left this country's telecom industry previously, he said.
Ahmed showed a government letter acknowledging Robi since the single foreign investor to bring in the best amount of foreign direct investment five moments in a row. But he as well expressed his frustration on the profitability.
Robi's shareholders have up to now invested a lot more than Tk 26,500 crore and made a profit of Tk 1,240 crore found in its journey greater than 2 decades in Bangladesh.
The management could provide Tk 292 crore to investors as dividend and contributed more than Tk 27,690 crore to the national exchequer by 2019.
"Our shareholders haven't arrive to Bangladesh to incur losses and it's really extremely hard for investors to carry these losses for long."
Ahmed also stated the spectrum pricing formula was an extremely big hurdle for offering telecom providers.
"Spectrum price is much higher than gold and platinum in Bangladesh and highest on the globe in various parameters," he quoted a report of GSMA, a business organisation that represents the interests of mobile network operators worldwide.
Spectrum selling price per megahertz (MHz) increased from $12 million to $20 million in 2011 when the operators renewed their 2G licences, he said.
It had been again fixed at $21 million per MHz found in 2013 when 3G licences were awarded and risen to $27 million and $31 million in two bands in 2018 for awarding of 4G licences, said Ahmed.
"Spectrum is normally our lifeline and there is no shortage of it in Bangladesh but its value has increased over the time," he added.
"And additionally the regulator has created numerous licensing regimes and in undertaking that they have trim our hands and legs and today we must take offerings from additional parties which is also very costly."
But on the other hand, due to the competitiveness of the marketplace prices, top quality of different services also came down to a world low, he said.
Currently each and every minute voice call charge is Tk 0.58 and per MB info charge is Tk 0.03, both one of the lowest in the world, Ahmed added.
All the operators also have cut data prices amidst the COVID-19 pandemic, he said. "Info use has increased about 25 per cent in the industry but it also led to losses for all of us for price adjustments."
Ahmed also compared info of the telecom industry with that of others between 2011 and 2020.
He said per unit price of electricity had increased 28.3 per cent, gas 106 per cent, water 117 % and bus fare 10 % whereas voice call charges possessed declined 35 per cent while data cost 97 %.
