Can we ensure an inclusive digital future by keeping the spectrum price high?

Bangladesh stands at an important economic crossroads. The Policy Research Institute of Bangladesh (PRI) describes the economy as experiencing “fragile stabilisation rather than a strong recovery”.

GDP growth was provisionally only 4.14 percent in FY26, industrial growth slowed to 2.86 percent, private investment fell to 21.53 percent of GDP, and fresh FDI equity inflows declined sharply. Private-sector credit growth has fallen to a 33-year low of 4.47 percent.

Against such a backdrop, the forthcoming spectrum renewal is much more than a telecom regulatory exercise. It is a test of whether public policy will help revive private investment or inadvertently weaken it further.

The temptation to view spectrum primarily as an instrument for generating government revenue is understandable. Bangladesh's fiscal position is constrained.

The tax-to-GDP ratio remains around 6.8 percent, NBR revenue fell approximately Tk 835 billion short of its FY26 target, and the government faces significant expenditure and borrowing pressures.

But these fiscal difficulties are precisely why spectrum should not be used as a mechanism for extracting the maximum possible upfront payment from an investment-intensive industry.

A large renewal fee may produce an immediate receipt for the exchequer, but if it reduces investment in networks, the economy ultimately pays through poorer connectivity, slower digitalisation and weaker productivity.

Bangladesh's telecom economics already make the case particularly compelling.

The spectrum-cost-to-recurring-revenue ratio in Bangladesh is estimated at 15.7 percent, compared with a global median of 7.7 percent and an Asia-Pacific benchmark cited at 10.4 percent. On the present trajectory, it could rise to an extraordinary 22 percent by 2027. Such a scenario would leave operators significantly less financial headroom to expand coverage, improve network quality and prepare for 5G.

Moreover, we must not forget that more than 50 percent of the population are still not using internet. Without access to internet, it will be practically impossible to identify the most deserving beneficiaries of the social welfare schemes, such as, Family card, Farmers’ card, etc. Charging high price for spectrum will naturally deprive the telecom sector from the investment required to plug this 50 percent gap in our digital inclusion drive.

If we look at the market realities, we find that operators in Bangladesh are serving one of the world's lowest-revenue telecom markets. Monthly ARPU was only around Tk 130 at the end of 2024. This compares with approximately Tk 267 in India and Tk 752 in Thailand.

Besides, Bangladesh's operators also face corporate tax rates of 40 percent for listed and 45 percent for non-listed companies, while consumers face a tax burden at 39 percent.

The pattern in data business also illustrates the contradiction even more vividly. Between 2019 and 2024, mobile data consumption increased fivefold in Bangladesh, but data revenue increased just 1.8 times as prices declined sharply.

This underlines the fact that connectivity has become more affordable and substantially more heavily used, but the investment economics underpinning that connectivity have become increasingly challenging.

This matters enormously in the economic environment identified by PRI.

With private investment declining, FDI weakening and capital-machinery imports contracting, Bangladesh should be looking for policy interventions that crowd in investment rather than crowd it out. Telecom is one sector where regulatory decisions can immediately release capital for productive investment without requiring additional public expenditure.

There is also a global precedent for thinking differently.

Many countries have shifted from revenue-maximization approaches toward spectrum policies that encourage network investment.

Vietnam, Indonesia, France, Germany, Spain, Pakistan and India have adopted measures such as spectrum usage charges waiver, significantly lower reserve prices, extended spectrum allocations without renewal charges and cost-effective spectrum renewals.

These measures have allowed operators to direct more resources toward network expansion, improved coverage and quality, accelerating 5G and enhanced digital services.

The underlying philosophy is powerful: the greatest value of spectrum comes not from selling it at the highest possible price, but from putting it to the most productive possible use.

Bangladesh should apply that principle to the 2026 renewal.

Instead of simply carrying forward legacy spectrum valuations, the Government should consider a drastic reduction in renewal prices. As highlighted earlier, lower spectrum renewal prices will encourage operators to direct more resources toward network expansion, rural coverage, improved indoor connectivity, capacity enhancement, and faster deployment of spectrum and 5G technologies, thereby accelerating the country's digital transformation objectives.

Longer spectrum tenures could also further improve investment certainty and allow infrastructure costs to be recovered over a commercially sensible period.

This is not an argument for giving valuable national resources away. It is an argument for changing the form in which Bangladesh captures their value.

The choice should not be between government revenue and corporate profitability. The real choice is between short-term extraction and long-term economic value creation.

PRI's economic diagnosis makes that choice more urgent. Bangladesh needs investment, productivity growth, stronger business confidence and economic diversification. Digital connectivity is infrastructure for all four.

At a time when private investment is already under severe pressure, imposing an excessive spectrum renewal burden would risk solving a short-term fiscal problem by creating a longer-term investment problem. Spectrum Renewal 2026 should therefore be seen from an investment policy perspective, not merely a revenue collection exercise.

Bangladesh cannot tax and charge its way into the digital future. It must invest its way there.

[Shahed Alam is a barrister-at-law, telecom expert, and the chief corporate and regulatory officer at Robi Axiata PLC]