Sunday, January 22, 2006

Mobile phones, romance and the government

This is an article of mine which was published (scroll down to the bottom to find the article) in the op-ed page of the New Age newspaper in Bangladesh. For the record I do not know the girls in the picture published along with the article. I guess it is from New Age's photo archive and is probably meant to portray a college student in Bangladesh talking to her 'romantic partner'.

BTRC directive on free mobile calls
by Issam Mosaddeq

Who says consumers (or at least their parents!) in Bangladesh do not have a strong voice and they are at the mercy of businesses? According to a report published in New Age on 14 January, the Bangladesh Telecom Regulatory Commission (BTRC) has asked the mobile phone operators in the country to stop their offers of free phone calls at night, following complaints from parents of young mobile users. The parents complain that such nighttime free calls are harming their children by hampering their studies, changing their lifestyles and, I guess, in the overall sense leading their children down the ‘wrong-path’ as they talk on the phone all night. Firstly, it is ludicrous that some parents, who are not able to control their own children, are asking the government for help so that they can make their children study and go to bed at sane hours. Secondly, it is bizarre as well as worrying that the same inept telecom regulator, incapable of taking firm decisions, actually paid heed to these requests and asked the mobile companies to refrain from legitimate business practices. These offers are a result of long sought-after competition in the mobile industry beneficial to consumers at large. Going back to the first point, it has long been a mentality of certain groups of parents in Bangladesh to blame everything but themselves for their lack of parenting skills. Why should mobile phone operators bear the responsibility for their inability to exert control on their children? Why then should only mobile operators be ‘blamed’, when a similar (and equally ridiculous) argument can be made ‘against’ broadband internet providers? With broadband internet, young people can chat with their ‘romantic partners’ all night and using a cheap microphone talk to them for free, using software like Skype or MSN. So should broadband internet be banned as well to compensate for some people’s bad parenting? To me, this sort of mentality points to a bigger sociological problem of a rise in our society of a section of people who have come to acquire wealth rapidly without a corresponding rise in education and enlightenment. This same section of society seems to be unable to handle their children. They shower their adolescent offspring with money and then lose all influence over their ‘unruly ways’ and then start blaming everyone and everything but themselves. To make matters worse these 21st century young men and women can easily bluff their way around their unsophisticated 20th century parents. Surely, in this particular case, it would have been far simpler for the parents to take away the mobile phones from their children or at least give warning of the consequences of not being obedient than to complain about the mobile tariff structure to the BTRC. As for the BTRC, they failed miserably for quite a long time to ensure a competitive environment in the mobile phone industry. This failure is also due to the lack of a proper policy on industrial organization in our country. We have had two mobile phone monopolies in Bangladesh at different points of time (CityCell to start with and then Grameen Phone) before the industry slowly started to take the shape of what resembles a competitive oligopoly. The BTRC, after being formed, paid little attention to the monopolized market structure in the industry even as consumer screamed themselves hoarse complaining about the expensive tariffs, poor service and lack of competition. So it is very strange that now, after the market finally starts to become competitive, the BTRC wants to interfere with the conduct of firms that is neither illegal nor against the best interests of their consumers at large. And they have apparently only interfered at the request of an unspecified number of irresponsible parents. Another question worth asking is who has given the telecom regulator the right to play the part of moral police and decide whether free phone calls conform to social and cultural values? Another part of the report is also worrying. Why are intelligence agencies asking for the free call offers to be stopped. It is legitimate for them to ask for subscriber registration but what right do they have in interfering with business conduct? And why would they want to? Will terrorists stop killing people if they have to pay by the minute for their calls or are late night romances a new security threat for the country? It is high time for Bangladesh to have a well-defined policy on industrial organization outlining rules on industry structure and behavior of firms. It is very important to have such a policy if businesses are to expand and the economy is to attract foreign companies. It would go a long way in ensuring consumer rights. Firms and consumers should not have to be victim to the sudden follies of the government or its capricious (and seemingly parochial) officials or have to bear the strange consequences of teenage romance. And would someone please tell some of these parents to stop whining and teach them a thing or two on how to handle adolescents? Issam Mosaddeq writes from London

Wednesday, July 20, 2005

Tax on mobiles

I cannot help but disagree with Finance Minister Saifur Rahman on his imposition of a 900 taka ($14) tax on mobile sim cards.

He is angry at the mobile phone companies in this country for not lowering call charges, so he punishes the consumers by imposing a new tax on them when buying new phone connections . Makes no sense. As it is, mobile phone consumer have to pay 15% VAT for every minute they speak on their phones and also when they buy a phone set.

He is partially right when he accuses the mobile companies of not reducing call charges; partially because the telecoms watchdog BTRC is meant to make sure that the companies are acting fairly and not colluding with each other while fixing call tariffs. But then only he can probably explain how the mobile companies are punished when the consumer is taxed.

Meanwhile, the
news of this tax imposition has spread globally. The Economist cites this tax increase in Bangladesh as an example of the barriers to growth of mobile phone usage in poor countries. The density of mobile phone ownership has been found to be positively related to the rate of GDP growth. Here is a report from the Globalization Institute which also links to a study on mobile phones published in the Economist.