Allow New Mobile Operators

Allow new mobile operators to enter So that consumers feel much better.

Bangladesh Telecom Regulatory Commission (BTRC) is going to hold hearing on the services provided by telecom operators on May 8. Prior to national election, it successfully abolished the 3-day data pack and made 7-day the minimum validity period. It retains the 30-day and unlimited validity packs. Consumers, however, pay a higher price for new validity packs. In general, prices of all data packs increased. Many operators lost small duration clients ,but made significant gains in profits in the first quarter of the current fiscal year. News reports divulged that GrameenPhone earned Taka 13.38 billion profit in the first three months. Meanwhile, Robi earned Taka 1.70 billion profit during the same period. It is important to note that Telenor and Axiata merged their Asian operations. So both the operators should be treated as same.

I used Teletalk for a long time as it offered the cheapest service in the country. But one week after the national election, quality of its service deteriorated. After making complaints, I did not see any improvement and I switched to other operators. Prior to using Teletalk, I interchangeably used various operators ,depending on which one offered the competitive prices. Many operators offered insurance for mobile phones in case they got damaged or new phone devices along with their SIMs. Sometimes later I discovered that far too often my phone got dead. I needed to run to a mobile servicing shop to flush/reinstall the operating software. Most of the time this happened while using the service of an operator based in Egypt. Another time it happened with another operator that offered freebasics, free internet service offered by Facebook. After paying between Taka 3000 and 4000 as mobile servicing fee for fixing my hacked phone in the span of three years,I thought it was time to change my phone. Back then Teletalk offered the most attractive services. And in the last two years I did not have to run for mobile servicing. I do not want to blame the operators directly for the hacking of phones. When we use browsers or internet,developers with ill intentions may target the mobile phones and infect them with malicious add-ons or software. Sometimes deranged individual within an operator may do sabotage act. But with the Teletalk I didn't have this kind of experience. I lost telepoints,balance and uncarried data. On some occasions ,I got back missing telepoints and balance after complaining to the highest level. On some occasions, I didn't get back anything. The horrifying experience of mobile servicing forced me later to document every telephone service mishap happened to me and report back to proper authority including the BTRC. In the last two and half years ,I did not have to spend much as I was using the cheapest service offered by public telecom operator. Later I learned Teletalk network expansion had been mostly done with Chinese credit and it owes a lot of money to public company and other vendors. Government is planning to sell part of its share to make it profitable again. I think the merger between Telenor and Axiata did a lot of damage to the services offered by the operators. Both the operators, followed by others, offered the identical services at the same price after that merger. Nowadays operators make hefty profits by selling internet data. But as consumers we don't know how to measure the data we consumed. I wrote a detailed piece about mobile data packs few years back. So I don't want to highlight the issue any more. The point is allowing few more operators or selling new licenses to operators originating from countries with huge trade potentials could make the telecom market competitive again. If we allow availing the service of railway optical fiber network and satellite internet along with the license ,then more investors feel encouraged to step forward. Prior to election, a Telenor director in an interview with a local daily hinted to wind up their operations here. But few weeks ago GrameenPhone boss in an interview told they made a u-turn on that decision and decided to stay. It is a good news,otherwise we will see another round of increase in the prices of telecom services.

BTRC has to take fair share of the blame. It failed to stop the merger between operations of Telenor and Axiata here in Bangladesh. For more than a decade telecom operators remained top revenue source of the government. How could BTRC allow such merger inside Bangladesh? It directly affected the revenue earning in this sector. Look at the first three quarter of the profits of the two( or same) operators. BTRC should make a regulation about publishing details about unused data in a year. Because consumers pay for data but some data remain unused and do not carry forward. So they have right to know what the operators do with that data. This may fall into wrong hands or be used in wrong purposes. Operators should disclose what amount of data remains unused and what they do with that. I think it should be given back to consumers as bonus or special offers or to offer welfare services like free internet for education/social awareness/alleviating digital divide. Nowadays we see telecom, real estate regulatory bodies like RAJUK are being headed by military men. I completely oppose this practice as those who lack transparency and accountability could not call into question others integrity. In that light BTRC simply cannot charge operators Taka 10 for some of the data collection activities it intends to undertake. In some hearings BTRC survey report justified abolishing short duration data pack. Contrary to the survey report, many news reports divulged that many consumers were unhappy with such idea. In this case one may doubt that findings are predetermined. I think Parliamentary committee should be given the task to steer the activities of BTRC and anti-trust activities in telecom services. In functioning democracies, Parliament plays a greater role in such case. We know we have problems here but we should start the practice and rely less on men-in-fatigue. It is a surprise that many agencies failed to anticipate the biggest merger in the telecom industry that happened in Malaysia, where many former senior army personnel and their relatives took refuge. Look at the strategic ties with Qatar. Despite commitment of boots-on-the-ground, Qatar bluntly refused to sell LNG on deferred payment. And the decision of strategic ties with Qatar was taken by few sidestepping the Parliament. Let's come back to point. We need new telecom operators to give a relief to the consumers and to augment the govt revenue.

The Missing Data Phenomenon

Mobile operators face whimsical tariff, Consumers pay a price massive.

Loss of unused data has become a major concern among mobile data pack users. BTRC held several hearings in the past about the issue.Mostly private operators get the blame. Now public operator like Teletalk joined the party. Currently, Teletalk offered the cheapest data pack in the country.

Other operators, which continue to sustain punitive tariff payment, just pass their burden on consumers,making their products much expensive.

Even the 72-hour duration data pack became costly compared to other competitors. But the problem is it is not easy to measure the data you consume.

Back in 2018 when BTRC raised the duration of small internet package ,I wrote a piece titled “Asymmetric Information And Data Pack” highlighting this missing data phenomenon:

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Bangladesh Telecom Regulatory Commission has recently instructed all the mobile operators to raise the duration of small internet packages. From now onwards, all the packages have minimum duration of 7 days and maximum duration of 30 days.

According to a news report, mostly students, youths, occasional internet users and lower income groups are main clients of this small packs.

As small packs are still available in the market, consumers are still somehow unaffected by the decision. But the operators may drive them to relatively costly packages using BTRC decision as a pretext. The restriction is only on the duration.

Being a user of this small packs, I am also likely to suffer from BTRC decision.

Nowadays data packs become a major source of revenues for mobile operators.

One can see the asymmetric information playing a role in the interaction between data pack purchaser and operators. Here consumers (principal) have no clue on the type of operators(agent)they are dealing with.Operator may pretend to be honest and act as a dishonest one.

Despite the fact that there are many operators in the cellular data market, they behave and offer products in unison. And two big operators have merged. So, this cellular data market cannot be categorized as a textbook competitive market.

When you buy goods from a grocer you have the means to recheck the quantity you bought. Unfortunately, most of the data pack users do not have means to verify the usage of purchased data.

One may argue that there are apps that keep records of data usage. But I lost faith on them after I had found one giving suspicious reading.

So an internet user may pay for a 50 MB pack but ended up getting less of what he paid for. It is pretty easy to monitor the talk time, but very hard to measure the kilobyte or megabyte you used.

So, it is highly likely that operators cheat their customers. This is an example of hidden information problem, where some operators pretend to be selling the right data pack but deliver less output.

I would like to share my own experience in this regard.Two years ago I used to buy data pack of 1 GB at Tk 89 for a week. Soon I discovered that I ran out of my data before the expiration date. I used the mobile internet and pretty convinced that smartphone consumes less data than a laptop. Earlier I had used internet on my laptop spending less than Tk 100 for the same data pack for a month.

I had a belief that using internet on smartphone would cost me less. To my surprise, my internet cost quadrupled. Far too often my internet packs finished before the expiry date.

I visited mostly news sites and social media. And from my past experience I knew these visits consumed modest amount of MBs.

I went to a local mobile balance recharge shop and shared my concern. The pack seller advised me to buy pack for lesser volume with smaller duration. I migrated to such pack.

I discovered that smaller packs worth Tk 5, Tk 11 and Tk20 provided me the desired utility within the given duration. And I slashed significantly my monthly cost on internet.

Later I figured out how it happened. Cheating operator made a profile on your internet usage. For long duration you may not be serious about internet use. Based on that profile, it cheats on you about your data usage. It pretends to be an honest operator and delivers less than what you paid for.

By changing my internet use , I made the cheating process less attractive to the operator. My weekly spending was around Tk 90. By changing the internet use, I reduced it to Tk 30 per week, one third of Tk 90. Moreover, i switched to limited-duration packs, which are less prone to cheating. I altered completely my weekly internet use.Now the operator found my pack less attractive to cheat.

In data pack market all the operators follow somewhat similar product line, all of them offering small data packs, varying slightly in duration and volume.But fierce competition is absent here. You have an aura that there is only one operator.

What BTRC has done is to drive us to situation where consumers are less better off given that asymmetric information prevails in the market. Now the operators , as all of them have to obey the regulator’s decision, may offer data packs that are relatively expensive compared to earlier ones. Every one of them knows other will do the same.

With relatively higher price and duration, consumers also face the higher risk of being cheated. They may end up getting less than what they paid for.¹

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This is exactly what is happening now. The 72-hour long data ends pretty early. For my case it lasts only 24-hour. It increased my monthly costs 5 times more than what I paid in 2018. So I decided to switch to longer-duration packs with larger data volumes, hoping such move will again slash my monthly costs. Teletalk allows to carry the unused data to the newly purchased pack. I found proofs in smaller packs like 350 MB/750MB/1 GB. It convinced me such things will likely to happen in longer duration pack. Just a day before the expiration of one such pack, I purchased another pack. Previous pack’s unused 7GB data added to the current pack and total data reflected it. But after the expiration, I surprisingly noticed that my unused 7GB data was gone. I did not expect this from a public operator that is meant to protect consumer interest. I suffer a monetary loss in the times of high inflation. I instantly reported the phenomenon to BTRC.

Many of the consumers do not take account of such missing data and net welfare loss is huge in this case. The resources may end up covering expenses of some vested quarters, who are not good for the people. I do not blame the operators too much as they have to do business in an environment that is becoming difficult to operate. If government continues to slap tariff, we the consumers bear larger part of the burden. No wonder more people switch back to dumb phones nowadays.

Notes And References

1. ”Asymmetric Information And Data Pack”,Rezaul Hoque,December 16,2018,https://rezaulhoque.wordpress.com. For more read at https://rezaulhoque.wordpress.com/2018/12/16/asymmetric-information-and-data-pack/