BTRC to propose cost modelling for MFS

Staff Correspondent | Published: 23:38, Oct 19,2016

 
 

The telecom regulator has decided to send a proposal to Bangladesh Bank for working out a cost model to determine the pricing of mobile financial services as the MFS operators and mobile phone companies are in a dispute over the issue.
Bangladesh Telecommunication Regulatory Commission officials said that the decision was taken in a meeting last week where representative of BB, BTRC, mobile operators and MFS operators were present.
The pricing of MFS recently came into focus after the mobile phone companies demanded higher revenue share for MFS operations.
Mobile operators claimed that the increasing volume of MFS transactions was blocking large portion of their USSD network, a dedicated channel, and a higher share of revenue will compensate that.
As per the MFS operators the mobile companies get 7 per cent of the revenue of each transaction.
Agents and distributors get 80 per cent of the revenue while MFS operators (banks or their subsidiaries) get 13-16 per cent of the revenue.
The mobile operators are now demanding charge for each USSD session, meaning a fixed charge for every cash-in and cash-out of MFS.
The MFS operators, on the other hand, claimed that meeting mobile operators’ demand will increase the overall operation cost as the USSD session charge would
be higher than the existing charge.
They said that people who were using the service will have to bear the additional cost.
The MFS operators also claimed that yearly the mobile operators receive around Tk 100 crore from the mobile financial services.
‘The MFS operators and the mobile operators failed to come to an agreement about the matter. So we decided to do a cost modelling for USSD pricing of MFS to determine the charges,’ a senior BTRC official told New Age.
He said BTRC will now take approval from the telecom ministry and after that send a proposal to BB in this regard.
‘The cost modelling will be done in participation of both the regulators,’ he said.
The BB in January 2014 decided to work out a cost modelling for mobile banking after the BTRC in December 2013 issued a slab-based maximum charge directive on mobile banking.
The BTRC directive sparked instant controversy as country’s mobile banking follows bank-led model where mobile phone network is a medium.
The BTRC suspended the directive two days after the issuance as BB expressed concern over overlapping the regulatory periphery.
The central bank, however, is yet to come up with any cost modelling for the MFS. 

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