Bangladesh boasts relatively affordable Internet, with the price of 500MB of broadband below the Broadband Commission’s 5% target. Yet, less than 10% of the country’s population uses the Internet. What accounts for this disparity? Our newest country case study explores the current state of affordable Internet access in Bangladesh, examining the history and growth of the country’s telecom sector, the policies currently governing the sector, and the policies and questions to be addressed in order for the country to overcome remaining barriers to access.
Bangladesh has one of the longest telecom governing histories in the region. Regulation started in 1971 with the creation of the Telegraphs and Telecommunications Department, and in 1989 the government allowed a private operator to begin offering telecom services in the country — over five years before the start of commercial mobile services in India or Pakistan. Despite this early start, development in Bangladesh has sputtered, while regional neighbors have surpassed it, despite their later start. Our 2015-16 Affordability Drivers Index — which scores countries based on the infrastructure and access drivers they have in place to contribute to more affordable Internet — ranked Bangladesh 33rd out of 51; only Nepal ranked lower among Asian countries.
A number of significant barriers to expanded access remain, including low incomes and high levels of poverty, high data and device costs, and high consumer taxes. Despite the appearance of low data costs (equivalent to 3.49% of GNI per capita), mobile data prices in Bangladesh are still about 3x more than those found in neighbouring India, Pakistan and Sri Lanka. This pricing issue is compounded by the low national incomes and the fact that over 77% of Bangladeshis live in poverty.
Bangladesh also has some of the highest tax rates for mobile services in the world. Mobile network operators are taxed at 60% of revenue generated — a rate that seems particularly high when compared with the estimated global average of about 40%. The bulk of these costs are passed on to consumers.
What can Bangladesh do to reduce broadband prices for its citizens, expand access, and enable universal access? Read the full case study to learn more, and feel free to leave your ideas, questions and comments below.