As we call for a Wi-Max licensing auction and expect foreign
companies to come and take the market, we are leaving the local
wireless broadband access service providers, who have been
supporting the wireless broadband industry since its infancy, in a
state of indignation, writes Towheed Feroze
The Wi-Max, or Worldwide Interoperability for Microwave Access,
licensing auction for Bangladesh is scheduled to be held soon and
the last date for the submission of application for a licence is
September 11, 2008. According to Bangladesh Telecommunications
Regulatory Commission, the auction for the licences with 15 year
validity will start from Tk 25 crore and all mobile phone operators
will be barred from applying. Reportedly, three licences will be
given to non-government bodies and one to government-owned
Bangladesh Telecommunications Company Limited to build a WBA network
using Wi-Max technology as well as the licence to provide internet
telephony services. All the licensees will get 35 megahertz
bandwidth on the 2.3 and 2.5 gigahertz band. According to policy,
the companies bidding for the licences can be 60 per cent foreign
owned.
The main aim of Wi-Max, a non-line-of-sight wireless broadband
technology, is to ensure that fast, convenient and wireless internet
facilities reach the masses at reasonable rates. For the layman, the
understanding is that through Wi-Max, internet access will become
more affordable and through reasonably priced customer wireless
modems, internet will be able to penetrate into homes in remote
parts of Bangladesh.
However, local wireless broadband access operators have some
views that have not come up in the media in the context of the
upcoming submission of application and the subsequent auction. One
of the leading WBA operators said that since local WBA operators
have been in the market for eight years and have experienced, first
hand, the evolution of the technology, therefore, they also need to
be part of the new Wi-Max regime. Whereas some of the potential
foreign entities who attended the pre-bid meeting have large funding
behind them, they are new entities only having been formed in the
last few years.
The question is, why have the foreign entities not shown any
interest in the Bangladesh WBA market until now and why have the
local WBA operators with years of WBA network service experience not
been able to start offering internet services to residential users?
According to some of the leading local WBA operators when they began
building their WBA networks they had to use expensive proprietary
technologies as there was no standardisation of WBA technologies
until recently. The high cost of the proprietary technology customer
modems prohibited the local WBA operators from entering the
residential markets.
They also point out that the main reason they took a chance and
acquired unused licensed spectrum from BTRC, before the global
technology vendors even decided to call the standardisation as `Wi-
Max', and began building their WBA networks is because they believed
that eventually there would be standardisation of WBA technologies
globally just like there was with WiFi. Wi-Max is the
standardisation they have been waiting for to be able to finally
start providing services to the residential users. Perhaps this is
the same reason why foreign entities did not show any interest in
the Bangladesh WBA market until now as they too would not have been
able to penetrate the mass residential markets without a cost
effective technology like Wi-Max.
As a matter of fact some of the local WBA operators expressed
their bewilderment at BTRC preventing the import of Wi-Max
technology in 2007 to begin providing residential internet services.
Technology is constantly evolving and Wi-Max is merely the latest
technology which enables WBA operators to extend internet services.
They also said technology should never be licensed and licences
should always be for allowable services only. They point out that
the recent deployment of Wi-Max networks in the USA did not require
operators to go through any new licensing process. Operators in the
USA with 2.5 GHz spectrum acquired years earlier for MMDS services
are now using the same spectrum to deploy Wi-Max networks across the
USA.
According to some industry insiders the first draft of the Wi-Max
licence policy categorically said that all existing local WBA
operators would have to cease their WBA operations within 5 years.
Essentially meaning all wireless internet business would eventually
be done only by the new Wi-Max licensees. Although this clause was
subsequently removed, it must be asked why that clause was there in
the first place. Is it truly in our national interest to hand over
all existing businesses from local companies to foreign companies?
According to the BTRC's revised policy they will allow the new
licensees to do mobile and fixed wireless broadband using cost
effective Wi-Max technology while forcing the existing WBA operators
to continue using expensive non-Wi-Max standard technologies to
provide only fixed wireless broadband services. The revised policy
will set an uneven playing field by giving the Wi-Max licensees an
unfair advantage over the existing WBA operators. Essentially the
policy will ultimately achieve its original goal of stopping all
existing WBA operations as logic says only the new operators with
cost effective Wi-Max technology will survive thus reducing
competition instead of increasing it.
It seems that the question is not about fixed and mobile, what we
need to ask is if the local players who have been around can do Wi-
Max without foreign presence or not. It should be noted that the
Bangladesh WBA operators began building their networks before most
of their counterparts in neighbouring countries. A hundred per cent
of Bangladesh's export-related companies, airlines, banks and other
institutions who rely on broadband connectivity for their operations
are being supported extensively by the local WBA operators. By
looking at the extent of the overall WBA network coverage and
mission-critical services being provided over the years, the local
WBA operators seem to posses all the resources to be able to
successfully migrate their existing WBA networks from proprietary to
Wi-Max and extend affordable wireless internet services to the
Bangladeshi users.
In the view of some industry insiders, Wi-Max operators in the
near future will compete head-to-head with mobile phone operators in
the voice and data markets. Thus we should not forget that the
present telecommunications market is dominated by the mobile phone
operators who are already primarily foreign owned. In the past the
participation of foreign operators was essential for building and
growing the telecommunications industry in Bangladesh as local
companies did not have the expertise or the financial resources to
do so on their own at the time. In contrast, at the present time it
seems the local WBA operators have all the necessary expertise and
resources to migrate their existing WBA networks from the present
proprietary technologies to Wi-Max standard technologies without any
foreign help. Therefore, although the BTRC may earn a large one-time
amount by auctioning Wi-Max licences, Bangladesh may lose more
financially over the years as a majority of the ownerships in the
new Wi-Max regime are likely to be with foreign entities. It is
common sense that when a foreign company has 60 per cent stake, most
of the profit will filter out.
Wi-Max aims to bring the whole country under the umbrella of
technology and it also aims to bring affordable internet to homes,
both in the cities and in the rural areas. But from what we have
heard from the local WBA operators, it seems that certain
perspectives have not been well thought out. Almost all local
operators who have been in the market long enough believe that they
can also do the task and if they are given a chance then the local
market will flourish and all the profit will stay inside the country.
BTRC may have the welfare of the country in mind but has it
foreseen what misfortune will befall the local players and financial
outflow from the country if the existing WBA operators are left out
of the development of a phase to which they have an entitlement? And
should we not formulate policies across all sectors where we only
invite and encourage foreign investments in areas where we lack the
experience and resources while discouraging foreign investments in
areas where we have the expertise and resources? Such a policy will
surely allow our local companies to grow and enable them to
significantly contribute to our national growth.
Source:
http://www.newagebd.com/2008/sep/07/edit.html
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