Bangladesh’s mobile TowerCo industry launched in 2018 with gold rush excitement. Licenses were snapped up, drawing foreign investors into what looked like a booming infrastructure market.
But the fever has cooled, reflected in the cautious expansion of the two TowerCo licensees backed by US giants.
Bangladesh TowerCo Association Interim President Sunil Issac underscored the need for tax rationalisation, faster tower transfers, and greater policy certainty to strengthen the sector’s economics and attract sustainable long-term investment.
With three decades of global telecom and digital infrastructure experience, the Country Managing Director of top TowerCo EDOTCO Bangladesh said Bangladesh’s standalone TowerCo model rightly followed international practice.
In an interview with TIMES of Bangladesh, he compared the business to airlines, requiring heavy capital investment.
“To make it a profitable business, a TowerCo needs scale to reduce the cost per tower and unlock sustainable profitability,” he said.
A key expectation was that by 2025, mobile operators would sell most of their towers through sale-and-leaseback deals, creating a mature tower-sharing market.
Yet by the end of November last year, operators still held nearly 47 per cent of Bangladesh’s 46,685 towers.
Leading TowerCo in the market, EDOTCO operates close to 17,000 towers, followed by Summit Tower’s 5,255, while the two others, Kirtonkhola and Frontier, significantly lag with 1,220 and 1,005 towers respectively, and mobile network operators still hold 21,763.
Issac said taxation is the biggest pain, with almost half of industry revenue going to the government. Bangladesh is among the highest-burden markets compared with Malaysia, Indonesia, the Philippines, Cambodia and Pakistan.
Until last year, TowerCos were not recognised as a distinct industry in the tax system, contributing to double taxation.
TowerCos pay a 5.5 per cent revenue share and a Tax-VAT on the topline tax are rare examples of double taxation that the government should rethink immediately.
“For every Tk100 we earn, almost Tk49 to 50 goes to the government as tax, while the official corporate tax is 27.5 per cent,” he said.
A healthy international benchmark for total tax burden is 25 to 35 per cent of revenue, with below 35 per cent considered sustainable. Some countries impose no revenue sharing at all.
Issac said long-term investors value predictability over high short-term returns.
“This is like an ETF fund. Stable and predictable policies are essential. When regulations shift or additional taxes are introduced beyond the established framework, it becomes difficult to do business,” he said, emphasising that clarity and consistency are key to sustaining valuations and attracting foreign investors.
Tower economics shape data costs
Issac said TowerCos manage a major component of telecom economics, the cost of producing data.
In the cost of producing 1GB of data, tower infrastructure accounts for 25 to 35 per cent, electricity adds another 20 to 30 per cent, followed by spectrum, staff, distribution and overheads.
For TowerCos, a major share of expenditure goes to land and rooftop rentals, especially in dense Dhaka, where high rooftop costs can outweigh returns.
Issac said towers are critical national infrastructure and government support is needed to ease rental burdens.
He pointed to infrastructure sharing, noting that when three operators share one tower, costs fall by about one-third.
That model, he said, helped bring down internet costs significantly between 2018 and 2026, keeping Bangladesh’s data prices among the lowest in the region.
“Further relief will require coordinated action with government and tax authorities.”
Issac also highlighted electricity reliability as a major hurdle, especially in rural areas.
Each tower site needs four to six hours of battery backup due to outages, raising costs and affecting consumer internet pricing.
He also cited misalignment among authorities, including city corporations imposing their own local taxes.
Tower demand rises with 4G and 5G physics
Despite investors’ hesitation, Issac foresees tower demand will grow as Bangladesh moves deeper into the data era.
In the 2G voice period, one tower could cover up to 25 kilometres. In 4G and 5G, coverage shrinks as towers must be closer to users.
Data coverage works less like a floodlight and more like a spotlight, requiring denser placement.
Technically, a tower can cover only about 100 to 300 metres effectively for quality 4G service, otherwise latency and HD performance suffer.
Bangladesh’s dense population also drives shorter inter-site distance.
“Bangladesh is less than 500, Indonesia is around 600, and some countries are over 1 kilometre,” he said.
Based on spectrum deployment in bands such as 900 MHz, 1800 MHz, 2100 MHz and 2600 MHz, Issac estimates Bangladesh needs another 8,000 to 10,000 additional sharable towers to ensure nationwide quality 4G.
When 5G expands, towers may eventually be needed every 100 metres, even as structures become smaller and less tall.
5G rollout a chicken-and-egg problem
Issac rejected claims Bangladesh is unprepared for 5G, noting operators have already launched limited 5G sites.
Tower infrastructure is technology agnostic, with equipment from Ericsson, Huawei and Nokia upgradeable through software.
The key drags are delayed release of the 700 MHz and 3,500 MHz spectrum bands and low smartphone penetration, around 55 per cent.
He described this as a chicken-and-egg problem, citing Malaysia where government-led rollout helped demand follow.
Early 5G use cases in Bangladesh, he said, are likely in private networks such as airports, ports and smart factories.
Valuations and policy hope
Issac said TowerCos and digital infrastructure assets are valued higher globally than traditional telecom operators.
Mobile operators trade at 4 to 6 times EBITDA, down in recent years. TowerCos trade at 6 to 12 times, with some European deals in 2023 and 2024 reaching 16 times.
Data centres average around 14 times, while fibre companies trade between 12 and 14 times.
Issac noted the new NICSP licence framework is open, allowing fresh investors to enter, acquire assets or build new infrastructure.
He welcomed Bangladesh’s new telecom policy, highlighting the reduction of TowerCo revenue share from 5.5 per cent to 3 per cent, alongside lower fees.
However, he cautioned execution and licence migration will be the real test.
Issac said the TowerCo association is working closely with the BTRC to ensure a smooth transition as Bangladesh pursues its digital nation ambition.
He said the industry retains long-term potential, driven by demand for thousands of new towers, expanding data consumption and future 5G applications.
But unless taxation is rationalised, tower transfers accelerate and investors regain policy confidence, the investor appetite that once made TowerCo licences lucrative may continue to decline.
Their fair profitability must be ensured, Issac added
