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Murtoza Ali Quader

ID: 061213045
ETE 405 (1)

Limitations & the effect of the current VoIP policy in Bangladesh

Voice over internet protocol (VoIP) is the routing of a voice conversation over the
internet or through an IP based network. The development in the technology is
being fuelled by the convergence of the telecommunications, information and
television industries. With new service applications, and the expanded capabilities
for global commerce, the traditional PSTN operators in many countries are moving
to new IP centric networks, to stay in the game except Bangladesh because here
the BTCL is the main PSTN operator which is run by PSTN backbone that has many
limitations. They don’t want to move advance IP centric network and they don’t let
others to introduce it. As a result BTCL is dealing with the dilemma of loosing
revenue to illegal VoIP service providers, including illegal international operators
such as Skype and Vonage.

So what is VoIP? Voice over internet protocol (VoIP) is the routing of a voice
conversation over the internet or through an IP based network. The term “VoIP
Services” is used loosely to cover a range of publicly available voice services using
VoIP technology.
This includes:
-Voice over broadband (VoB) such as international private lease circuits
-Voice over digital subscriber loop (DSL)
-Voice over Wireless Local Area Network
-IP telephony or voice over IP based networks
VoIP is integrated with other services (e.g. data, video) that are available on the

In Bangladesh VoIP is using for long distance call for such a long time but our so
call engineers of BTCL didn’t knew that till 2000. And this so call engineers are
making the VoIP policy for Bangladesh. Now most of the communication is on IP
base communication. And in National Telecommunications Policy, 1998 and in
Bangladesh Telecommunication Act, 2001, there is no mention of VoIP. That’s why
the Cabinet decides to open VoIP in the private sector on 23 October 2003. But
unfortunately the Cabinet decision could not be implemented. As a result illegal
VoIP operators in Bangladesh were made their fortune at that time. Most of the
illegal VoIP operators are back by high ups of Government and run by powerful
businessman it’s very difficult to capture them. As a result the powerful illegal

internet telephony operators keep on draining out hundreds of crores taka each
year, while the government is delaying the process of awarding license for VoIP
operation on various pretexts ignoring a fresh recommendation of BTCL. Meanwhile,
the number of illegal VoIP operation across the country has reached several
thousand, according to some market operators. The evidence of their growth was
marked in the report of an international telecom research organization, known as
Telegeography. The report states that in 2004, Bangladesh was the third fastest
growing destination for international VoIP traffic. Brazil and Nigeria led the world in
growth last year, with 112 percent and 103 percent. Bangladesh marked a growth
of 97 percent. Globally, VoIP traffic grew by 35 percent in 2004. But finally in 2007
(ILDTS) POLICY-2007” was made. But this policy made by so call engineers of
BTCL. And these people think voice and data are totally different things. And while
making this policy they thought about their own benefits.

Now I’ll give you an example of how BTCL losing lots of money because of this so
call policy making engineers. It is obvious that VoIP is the reality of future
telephony. The cost effective VoIP solution will continue to attract more people in
the year to come. Unfortunately our policy maker could not see this. BTTB's income
in the year 2005-06 was 13,300 million Bangladeshi taka with only 1.07 million
users. This revenue figure is the lowest compared to last few years. This drop is
caused by excellent cellular network of Bangladesh and illegal VoIP businesses.
Now, if BTCL had 45.21 million VoIP users they could earn much higher with
monthly low fixed charge. 45.21 million is the current number of users in cellular
world of Bangladesh. That clearly indicates there is a high demand for telephony in
Bangladesh. With such rapid growth of users BTCL should not have any concern
regarding their income target and return on investment in VoIP infrastructure.
According to Bangladesh Telecommunication Regulatory Commission (BTRC), every
day some three crore international calls are entering. Of the calls, Bangladesh
Telegraph and Telephone Board (BTTB) terminates some 1.40 crore calls and the
rest 1.60 crore calls are dealt by the VoIP traders. And that’s how BTCL are losing
lots of money.

By reviewing the ILDTS Policy-2007 one can easily see that The VoIP policy of
Bangladesh is almost same as the PSTN policy. In PSTN the call comes from
outside received by IGW. That is known as International gateway. Then IGW
serves call to ICX, which is the exchange. Then exchange serves calls to the
operators. Like GP, Citycell, Banglalink etc. Now for VOIP ICX is not used.
Alternative of that ISP is used. Data comes from abroad through submarine cable
And data come from IIG to ISP through VSAT. Everything is controlled by
BTRC. This is the regulatory board. This is the policy maker. And who is playing
monopoly business along with local businessman who runs the IGW in Bangladesh.
The BTRC gave 4 IGW license and instead of making a competition among them,
which may decrease the call rate, but the BTRC made the policy in such a way that

each IGW gets 25% of total communication. IGW got 87% revenue with
government and 13% is received by the owner. That is how the policy is going on.
And this is totally opposite of public interest. And it fall between to provide low cost
international telecommunication services.

IGWs were handling 12 million minutes of calls a day while BTCL was handling 20
million, till December 2008. Another 40% of the VoIP Calls is handling by the black
market. Actually this VoIP policy encourages people to invest on illegal VoIP
business. As there is hardly any regulatory committee, anyone can launch a VoIP
service by spending only Tk 2.5 lakh, which might cost some more depending on
the volume of the VoIP exchange. IGWs are charging 4 cents for handling each
international call, while VoIP black market price is at most 2.5 cents on an average.
Thus the government is losing around Tk 1208.88 crore revenue per year due to
international call termination through illegal VoIP.

August 5th, 2009 on a function Chairman of Bangladesh Telecommunication

Regulatory Commission (BTRC), Zia Ahmed said “As many as 32 local internet
service providers will be awarded IP telephony licenses, opening up voice calls
through internet protocol (VoIP), usage of which prohibited in Bangladesh just a
few days back.” And these 32 local internet service providers are ACME
Communications Ltd., Adams Telecom Ltd., Aliance Holdings Ltd., AML Infotech
Ltd., Axiom Interconnect Ltd., Aziz Trade & Engineering Ltd, Bangla Trac,
Communication Confidence Steel Limited, DBL Telecom Ltd., Gateway Dhaka Ltd.,
Getco Telecommunications Ltd., Goldcrest Holding Ltd., Imam Network Limited
,Inland Telecom Ltd., Intesa Communication M & H Telecom, Mango Teleservices
Ltd., Mir Telecom, Mobileway International Ltd., Mostafa Communications Ltd.,
Netex Telecom, Precision Networks Limited, Project Builders Ltd., Royal Green
Infotec Ltd., Sigma Engineers Limited, Signal 7 Ltd., Standard Group Limited,
Technovista Limited, Teleport Bangladesh Ltd., Telesat Trinco Limited, United
Enterprises & Co. Ltd., Universal Network Company and Xylink Networks. Now my
question why you just award this license to only local ISP? Why there is a
boundary? Most of the ISP provider in Bangladesh is not financially solvent, so it’ll
be very tough for some ISP to introduce this service. On the other hand, if license is
open for all than lots of people will show interest to take the license which will help
the economical growth of Bangladesh.

In Bangladesh the VoIP policy was made by inappropriate people those who haven’t
have enough idea about it. That’s why this VoIP policy is not suitable on road of
digital Bangladesh. In this policy the government has been trying to encourage
people to stick to its traditional telephone network. They have been cutting down

the consumer's bill by reducing the charges. However, we have seen the traditional
telephone network will never be able to allow cheaper rate compared to VoIP
network. Rather the government itself can go for VoIP businesses in different form.
Moreover, recently it is found by the GSM Association (GSMA) that the Bangladesh
government protects the BTRC's monopoly over international phone call business.
Thus foreign investors are least interested to inject fund in the country's telecom

We have connected ourselves to the information superhighway via submarine cable.

Unfortunately we are in the superhighway with a rickshaw. And if the VoIP isn’t
legalizing for international call termination we’ll continue our journey on the
superhighway with a rickshaw. The BTRC will award only 32 VoIP license to the
local ISP, just to exchange call in the boundary of Bangladesh. To make
international call they will still have to pass through IGW.

VoIP installation and maintenance can be based on software rather than hardware.
Thus the system is more robust and easy to upgrade. Beside these, VoIP promises
with lots of job opportunities in Bangladesh, especially for the women. For example,
call centers, which is enabled via VoIP. Also Lots of technically sound man power is
needed. People needed for management, improvement, new layout design,
Observations. By legalizing VoIP for both national and international call, Bangladesh
will be benefited in several ways. Significant cost saving in the government, private
and home telephone bills would definitely make a mark in the economy. In the
world of globalization, unlimited long distance calls are desired to take the home
businesses to the global market. VoIP is the cheapest solution to take your voice to
the world business community. It will create new business, jobs, new era in
communication. So VoIP is a blessing to our people. So I hope the government of
Bangladesh will appoint some expert people to upgrade the VoIP policy of