Prime Minister Sheikh Hasina has approved a proposal from BTRC to reduce international incoming call termination rate by 50% from 3 US cents to 1.5 cents per minute.
The approval was given Thursday on a test basis for next six months to discourage illegal call trafficking, said government sources.
The proposal also included cutting down the government share in the international call termination earnings from 51.75% to 40%, meaning the government will get 40% of 1.5 cents per minute.
Bangladesh Telecommunication Regulatory Commission (BTRC) sent the proposal to Prime Minister’s Office (PMO) through telecommunication ministry.
Earlier, it was dispatched to finance ministry for PM approval, but the ministry sent back the proposal twice for review arguing that if it was approved, the government would lose a huge sum of revenue.
Then the BTRC sent it to the telecom ministry which was allegedly convinced by influential groups including senior cabinet members to clear the way.
A senior telecom ministry official said the proposal received PM approval without any change.
As per the proposal, the government will get 40%, Interconnection Exchange operators 18%, mobile or land-line operators 22% and International Gateway (IGW) operators 20%.
In July last year, BTRC said the government earned around Tk1,800 crore from international call termination and it might reduce to only around Tk777 crore if the proposal was accepted.
Then it sent the proposal to finance ministry which later asked for review in March this year.
After such instruction from the ministry, the BTRC changed its earlier estimates of revenue loss and made a new proposal in May claiming that slashing call termination rate would allow the government to earn an additional Tk162 crore.
But the finance ministry didn’t sway from its stance. The telecom ministry argued that it led to crores of taka revenue loss in the beginning, but “the matter will be stable.”
Currently there are around 6 crore minutes of incoming international calls every day and BTRC expects it will increase up to 9 crore minutes.
Market sources said some service providers carry international calls through gray channels using voice over internet protocol (VoIP) technology.
On January 30, the Association of Mobile Telecom Operators of Bangladesh (AMTOB) wrote a letter to the telecom ministry to cut the rate from 3 cents to 1.5 cents as most illegal VoIP calls are between 1.5 and 2 cents.
The situation would be more challenging if the termination rate is slashed reduced, AMTOB said.
Currently, there are 29 IGW operators in the country while nine of them are inactive or stopped doing business after they evaded payment of revenue of around Tk500 crore to the government.
The regulator is now in a process to cancel licences of four to five IGW companies.
As of 2008, the state-owned Bangladesh Telecommunications Company Ltd (BTCL) was the only institution for international call transmission. But during the last caretaker government, BTRC liberalised the gateways and issued three more IGW licences. In 2012 the Awami League government also issued a total of 25 such licences.
Though Bangladesh reduced its inbound international call termination rate but VoIP Service Providers Association (VSPA) said the call termination rates in neighbouring countries are three to eight times higher than Bangladesh.
VSPA Convener Rabiul Karim said per minute international call termination rate in Sri Lanka is 9 US cents, 9.5 cents in Nepal, 8.8 cents in Pakistan and 25 cents in Maldives, which is the highest.
Market sources also said though the government reduced the termination rate, the IGW operators can terminate the call at much higher price but they will not share it to the government.