Spectrum costs now consume about 16 per cent of telecom operators’ revenue in Bangladesh, nearly double the global median of 7.7 per cent, raising concerns that high airwave prices could slow network investment and delay 5G expansion.
According to a report by the Global System for Mobile Communications Association (GSMA), total taxes on the telecom sector reach about 55 per cent of operators’ revenues, more than twice the global average, adding pressure on companies already operating in a market with relatively low earnings per user.
The findings reveal a growing contradiction in Bangladesh’s digital landscape.
Fourth-generation mobile coverage now reaches about 99 per cent of the population, yet millions of people still remain outside the full benefits of mobile internet.
Industry experts say the high cost of spectrum — the invisible airwaves that carry mobile signals — is emerging as one of the main obstacles to expanding network capacity and improving service quality.
Association of Mobile Telecom Operators of Bangladesh Secretary General Lt Col Mohammad Zulfikar (retd) said the price of spectrum has become a major barrier to investment in the telecom sector.
“When the cost of spectrum rises, the overall cost of providing services also increases, which ultimately affects customers and undermines the viability of business operations,” he said.
Zulfikar said spectrum prices in Bangladesh are not always determined through technical assessments or international benchmarking.
In some cases, the reserve price for spectrum auctions is based on previous auction outcomes rather than broader economic considerations.
“In contrast, many comparable economies adopt more investment-friendly policies by setting lower reserve prices to encourage network expansion and digital inclusion,” he said.
He added that telecom companies depend on reasonable returns on investment to sustain operations, but high spectrum prices combined with VAT and other taxes make such investments significantly less attractive.
Bangladesh’s spectrum most expensive in the region
International comparisons of the 700 megahertz spectrum band, one of the most valuable frequencies for mobile broadband, highlight the disparity.
Bangladesh priced the band at about Tk255 crore per megahertz, significantly higher than several comparable markets.
Pakistan set the price at about Tk80 crore per megahertz, while Vietnam priced the band at around Tk91.85 crore per megahertz.
In smaller markets the cost is much lower.
Bhutan charges about Tk16 lakh per megahertz, Ireland about Tk17.97 crore, Tanzania about Tk8.47 crore, Estonia around Tk2.20 crore, and Lithuania roughly Tk5.89 crore.
Several advanced economies allocate the spectrum without acquisition fees.
China, Japan and Malaysia provide the spectrum free of cost, prioritising network expansion and long-term digital development.
Other markets apply relatively moderate pricing structures.
The Netherlands charges about Tk107.67 crore per megahertz for a 15-year licence, Hong Kong collects a spectrum utilisation fee of about Tk11 crore per megahertz over 15 years, Singapore priced the band at roughly Tk22.82 crore per megahertz, and Taiwan at about Tk118 crore per megahertz.
Only a few countries charge higher prices than Bangladesh, including Saudi Arabia at about Tk274.7 crore per megahertz.
“This difference limits the rapid expansion of networks and affects long-term service affordability,” Zulfikar said.
He added that Bangladesh has historically prioritised generating upfront government revenue from spectrum assignments, which partly explains why prices remain comparatively high.
High taxes and rising costs threaten 5G investment
According to the GSMA report, operators in Bangladesh currently utilise just over 500 megahertz of spectrum, lower than the levels used by telecom companies in many other Asia-Pacific markets.
This remains the case even after recent allocations in the 2.3 gigahertz and 2.6 gigahertz bands.
Demand for spectrum is expected to rise in the coming years.
Telecom operators will need to renew licences in the 900 megahertz, 1.8 gigahertz and 2.1 gigahertz bands, while also acquiring new spectrum in the 700 megahertz and 3.5 gigahertz bands to support growing data demand and future 5G services.
Meanwhile the cost burden has steadily increased.
The spectrum cost-to-revenue ratio rose from 11 per cent in 2014 to about 16 per cent in 2023, significantly higher than the Asia-Pacific median of 10.4 per cent and nearly double the global median.
Telecom companies also face a heavy tax structure.
Operators share 5.5 per cent of their revenue with the regulator and contribute 1 per cent to the Universal Service Fund.
Regulatory taxes alone accounted for 22.2 per cent of operators’ revenue in 2023, while total taxes including consumer taxes reached about 55 per cent of revenues.
The global average tax burden stands at about 22 per cent.
Industry analysts say such a cost structure could discourage long-term investment and slow technological adoption.
At the same time, the economics of the telecom market have shifted.
Competition has intensified while the market has matured, reducing revenue growth.
Between 2014 and 2023, inflation-adjusted revenue per mobile connection in Bangladesh fell by 38 per cent.
During the same period, operators increased spectrum holdings to meet rising data demand.
However, revenue generated per megahertz of spectrum dropped by 69 per cent, reflecting declining returns from the resource.
Bangladesh’s extremely high population density further increases spectrum demand because operators require greater network capacity to maintain service quality.
Yet the country’s average revenue per user stands at about Tk140, far below global averages.
Zulfikar said such conditions create serious challenges for both service quality and operator profitability.
Operators must also invest heavily in network equipment alongside spectrum acquisition to launch new services.
“Higher spectrum costs increase the overall expenditure for operators on both internet and voice services, which may ultimately affect consumer prices,” he said.
Economic modelling suggests that maintaining current spectrum prices could push the spectrum cost-to-revenue ratio to about 21 per cent by 2035.
That scenario could delay network improvements and limit 5G coverage to about 86 per cent of the population.
Reducing spectrum prices could unlock major economic benefits.
Studies suggest that cutting prices by 50 per cent could increase 4G speeds by 17 per cent and expand 5G coverage to 99 per cent of the population, potentially generating about $34 billion in additional GDP by 2035.
A deeper reduction of 75 per cent could raise 4G speeds by 22 per cent and accelerate 5G deployment, contributing up to $45 billion in economic growth.
Industry experts say policymakers now face the challenge of balancing government revenue with long-term digital development.
Pricing spectrum too high risks leaving valuable national resources underused and slowing investment in network infrastructure.
For Bangladesh’s digital economy, the stakes are significant.
The policy choices made today will determine whether the country’s mobile sector continues expanding or struggles under the weight of rising costs.
