M Azizur Rahman

Private fixed phone operators welcomed new call tariff of the state-run Bangladesh Telecommunications Company Ltd (BTCL), saying it would pave the way for a level playing field in the market.

The state-owned public switched telephone network (PSTN) operator, BTCL, raised its nationwide call charge by up to three folds to Tk 0.30 per minute on Wednesday, narrowing the tariff gap with 12 private operators.

It also reduced tariff to Tk 0.65 per minute for calls to other companies in what the telecom minister Raziuddin Ahmed Raju said an effort to streamline the country's fixed line tariff structure.

Top private operators hailed the move, saying it would lead to competitive environment in a market dominated by BTCL thanks to its state largesse.

"We welcome the BTCL's move. It has brought about an equilibrium in the call rates of the PSTNs," said Chief Technical Officer of Ranks Telecom Ltd Abul Kashem Shamsuddin.

The previous BTCL tariff rate was not competitive, said Mr Shamsuddin, whose company is now the country's second largest PSTN operator with subscribers base of 170,000.

"In the past, BTCL's tariff created uneven playing field, which was not conducive for private operators growth. Now the market would be determined by how quickly a company can respond to clients' need and how best it can offer quality services," said the Ranks Telecom official.

He said the RanksTel has already cut its tariff to make it close to that of BTCL. "We hope we can now grow faster. Already the clients are happy with our services," he added.

Managing Director of Bangla Phone Amzad Hossain Khan said: "The BTCL's previous call rates distorted market and were not in line with the rules of the telecom regulator."

The telecom regulator -- Bangladesh Telecommunication Regulatory Commission (BTRC) -- had fixed the minimum call rate for any phone operator at Tk 0.25 per minute, but the BTCL slashed it as low as Tk0.10, ignoring the BTRC order, he said.

The BTCL's previous call rate was Tk 0.15 per minute for peak hours and Tk 0.10 per minute for off-peak hours.

Some of the private PSTN operators, however, feared that they might face stiff competition in the remote areas as the BTCL planned free connections in rural towns.

They demanded waiver of the existing line connection charges for the private PSTN operators to make a level-playing field.

The BTCL's new flat tariff rates and free distribution of handsets and lines in district and sub-district towns would squeeze expansion of private operators in the countryside, managing director of Dhaka Telephone Abul Hashem Khan said.

Mr. Khan said the BTCL should charge higher for the connectivity with mobile phone operators than the private PSTNs.

Currently the private PSTN's have to pay the government Tk 800 per connection. "It's a big drag on our expansion drive," he said.

The country's private PSTN operators have invested around Tk 30 billion hoping to grab a slice in the fast growing telecom market. But many have since found the going tough amid intense price war from BTCL and the mobile phone operators.

A total of 13 PSTN operators including BTCL are now active in the country having the total subscribers of over 1.41 million.

The state-owned BTCL has the largest clientele followed by the private Ranks Tel, Peoples Telecom Ltd and National Telecom.

As of May 2009, the BTCL has 872,409 subscribers followed by Ranks Tel's 168,037, People's Tel's 85,910 and National Telecom's 81,263.