Mobile cos, VAS providers to share revenue at 40:60 range

BTRC finalises guidelines allowing foreign cos more pie

HM Murtuza | Published: 22:40, Jun 03,2018 | Updated: 23:13, Jun 03,2018

 
 

Bangladesh Telecommunication Regulatory Commission has finalised guidelines on the telecommunication value-added services, setting the range of ratio of revenue sharing between the mobile phone operators and the VAS providers at 40:60.
Besides, the commission has also allowed foreign companies to hold more stakes in the VAS providing entities than what was proposed in the draft guidelines.
The guidelines titled ‘Regulatory Guidelines for Issuance of Registration Certificate for Providing Telecommunication Value Added Services in Bangladesh’ were issued by BTRC director MA Taled Hossain on May 31 this year.
The BTRC’s directive would help reduce VAS providers’ longstanding loggerheads with mobile phone operators as it said that the range of revenue sharing ratio would be from 40 per cent to 60 per cent.
A senior BTRC official said the mobile phone operators usually share around 30 per cent of the revenue they get from VAS with the service providers, making VAS providers dissatisfied.
The ratio of revenue sharing depends on service modality, contribution of stakeholders to the TVAS value chain, scale of operation, geographic and demographic characteristics of the target market segment, the guidelines said.
Therefore, revenue sharing model may vary for different services and also may vary for access network services, the guidelines said.
Considering the commercial freedom, the range of revenue sharing between TVAS providers and ANS operators would be within the range of 40 per cent to 60 per cent, the VAS guidelines said.
On the other hand, the finalised guidelines also said that any foreign company would be allowed to hold up to 70 per cent stake in any joint venture company in Bangladesh that would be formed to provide value-added services.
The BTRC in the draft guidelines, which were sent to the posts and telecommunications ministry last year, had proposed that the shareholding in a VAS providing entity by a foreign entity to be limited to 51 per cent.
A BTRC official told New Age that around 15 companies, solely owned by foreign entities, were running their VAS business in Bangladesh, resulting in significant amount of fund repatriation from the country.
With a view to lessening such fund transfer from the country, the telecom regulator had inserted the provision of limiting the foreign entities’ ownership to 51 per cent in VAS providing entities in the draft guidelines, the BTRC official said.
No foreign entity, however, would be allowed to operate VAS services without having any local partner.
The finalised guidelines said that VAS providers would have to get registration certificate from the BTRC, while the application fee for registration and the registration fee for a period of five years would be Tk 5,000 and Tk 50,000 respectively.
Besides, VAS providers will have to share 5.5 per cent of their gross revenue with the government and will have to deposit 1 per cent of their gross revenue in the government’s social obligation fund from the third year of the start of their operation.

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