MPOs squeezing national cash flow

Analyzing one leading MPO's statement when launching their well publicized reduced call charges, their monthly revenue was estimated at probably around Tk 260 crore with over 40 lakh subscribers -- before this reduction! Probably half of this was post-paid. The MPO must have been receiving advance cash payment to the tune of about Tk 130 crore per month! The figures are staggering to say the least.

Excluding the leader in the sector, other mobile phone operators together are estimated to serve a further 30 lakh consumers at least. Using the earlier data as a guide line, the total cash inflow of the mobile phone sector could well be around Tk 400 crore per month, half of which could well be cash advances paid by pre-paid mobile phone customers.

If ever one could dream of a cash cow, the reality exists in the mobile phone sector in Bangladesh today! No wonder it is attracting many newcomers who are rapidly entering the fray.

In contrast, one has to be really lucky to get a T&T mobile phone, with its reasonable tariff structure. We all look forward to its rapid expansion and consolidation. This vital national endeavour is needed to create the competitive pressure to bring about rational and realistic scenario in mobile phone tariff.

I would earnestly request our government to encourage and rapidly expand the capacity of T&T mobile phone service with more publicity about it. It will greatly benefit our rural population by giving easy telecom access at a reasonable charge. There are rumours that the government may sell off or have private sector control the T&T mobile phone service!

If that happens, then price escalation for the consumers will follow as surely as night follows day.

Hopefully our government will not proceed in this wrong and detrimental direction, from their enlightened effort to provide cheaper telecommunication for the masses. Should the private sector get their hands on it, and I am sure they are salivating for it, T&T's growing mobile service facility with a vast potential scope of expansion and coverage will become the biggest cash inflow service for private profiteers!

In the interest of our large rural population who are desperately in need of reasonably priced telecommunication, any idea of giving it to private hands may well be considered as a national disaster.

We hope that the government telecommunication regulatory body (BTTB) will become more active and make its power felt in taming the runaway cash profits being harvested by private mobile phone operators.

It should force the various companies to share their resources, particularly antenna towers and other installation facilities, to reduce duplication of investment cost of the private service providers wherever it is technically feasible. Steps like these will force them to reduce their charges.

If needed, an in-depth independent technical audit may be carried out for this, and based on this the mobile rates fixed, providing a reasonable profit margin and return on investment for the private mobile phone companies. Such a positive step will definitely rationalize the mobile phone operator's charges and contain their spiraling profits.

If some form of regulation or control is not put in place soon, possibility is very much there for the few private operators to form an unofficial and discreet cartel with ornamental variation under various head of charges, to make these appear different, but basically to make hay while the sun shines.

One sometimes wonders if this is not already happening. The regulatory board (BTTB) owes it to the vast numbers of current and potential mobile phone customers to ensure that they are not fleeced and high profit skimmed off from a visible and profitable business to go out of the country as profit repatriation.

Government should carefully examine and asses these potential pitfalls. It must move positively and effectively to contain the call rates in line with what is happening elsewhere. The ultimate aim should be to provide maximum availability, but at a reasonable cost to the consumer.

This is an important market where proper intervention of the government in the larger public interest is justified and necessary. We hope the whole matter of mobile phone business is pragmatically looked into and charges rationalized.

In the same spirit, government should provide all financial and logistic support to encourage T&T mobile phone operation to expand rapidly and act as a check and balance to the runaway high profit oriented private mobile phone business.

The writer is Director HR, Partex Group.