Telecom liberalization promised in EDP but no word from Govt on 3rd operator

Licensing for mobile service providers and Internet Service providers will be liberalized according to the recently launched Economic Development Policy (EDP) of 2017.

However, while lip service has been paid to Telecom liberalization in EDP, there is no word yet on allowing a third operator. The government in 2016 said it may allow a third operator if the quality of services of the two current operators do not improve, but while services have even gone worse there has been no movement.

The existing Telcos, Bhutan Telecom and TashiCell, have said that the Bhutanese market is too small for the operation of a third telco; but the possibility of whether or not the Ministry can revoke their license in case of deteriorating performances and re-tender it to a potential interested operator has raised curiosity on the particularity of the case.

On the matter, the Ministry said that after getting a proper perspective on the quality of services through a wider study, they would draw up Service Level Agreement (SLA), and institute a feedback mechanism which will help the government to evaluate the performance of the telcos. “Since the telcos would have to get the clients to sustain their businesses, poor service would mean losing their customers which would put them out of business ultimately,” said Minister for Information and Communications Lyonpo D.N Dhungyel.

The ministry and BICMA have not received any proposals yet from interested operators. Those wishing to establish either of the services will have to fulfill all the licensing guidelines by BICMA and abide by the Bhutan Telecommunications and Broadband Policy 2014 for mobile operators. Issuance of license will also depend on the market trends and sound proposals.

Lyonpo Dhungyel pointed out that BICMA’s report highlighted many shortcomings with the two telecos, which warrants expert intervention, but the report has covered only Thimphu area and cannot be taken for a comprehensive report.

Therefore the ministry will also institute an independent entity to study the call-drop areas, network congestions, and accordingly come up with advisories to help the telcos to improve their services. He said a new Service Level Agreement (SLA) would be drawn between BICMA and telcos wherein the penalty clauses will be spelt out there after.

Since Bhutan does not have technical competencies in identifying network congestion, call drops and other pertinent issues, a request has been made to the Government of India for assistance. “GoI has indicated their willingness to provide us with technical assistance and equipment,” the minister said.

Lyonpo D. N Dhungyel said liberalisation would give better access to value added services for users.

“The penetration of mobile services is 89.7% and Internet is 71.7%, which shows that we have achieved good coverage,” the minister said.

“However, we are all aware that quality of services needs to be improved. So, liberalization will help improve quality of services. Since we are so dependent on internet in this day and age, better telecommunication services will help in improving the socio-economic development, education, health, FDI in business, efficient government functioning and service delivery to name a few,” he added.

The minister pointed out that the price of Internet in Bhutan is one of the highest in the region as per the study conducted by Deloitte and Antelope Consulting. Therefore, liberalisation is expected to reduce cost of services and improve choice of service packages to customers.

“Introduction of new players in the market has always brought in positive changes and competition,” the minister said.

“New players would bring in new technology, better packages and of course competitive pricing. The introduction of second Telco had the same effect in the beginning,” the minister said.

The Economic Development Policy 2017 states that the cost of connectivity will be benchmarked to costs within the region and the government, while ensuring universal connectivity, will endeavor to bring down costs.

“This has been the area of priority for this government. We have initiated talks with Bangladesh and India for both import of bandwidth and Right of Way (ROW). I am pleased to report that the government of India has been very considerate in exploring the possibility of granting us the import of bandwidth through their country,” the minister said.

“We have been assured that a complete business proposal will be sent to us through their Telco (BSNL). We are confident that with the third international gateway the prices of bandwidth will reduce by many folds. I am personally monitoring the progress of this initiative, and I am in touch with my counterparts in India.”

Currently, out of the 9 licensed Internet Service Provider (TashiCell, Bhutan Telecom, Samden, Druk Com, DataNet WIFI, SuperNet Infocomm, BitCom Systems, USD NET, Nano) only 6 are noted to be providing active services. Tashi Cell and BT are the major players importing their bandwidth from India. Druk Com provides VSAT services to the banks.

As of September 2016 there were 702,683 and 561,979 mobile and Internet subscribers according to the communications ministry.

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