Telecom Sector: Heavy tax burden limits profits and investment

Staff Reporter :

Bangladesh’s mobile operators face one of the region’s highest tax burdens, leaving most struggling to generate sustainable profits despite decades of operation and large subscriber bases.

Industry data shows that after taxes, fees, spectrum charges, and licence costs, operators retain only a small portion of revenue, limiting their ability to reinvest in network expansion or service improvements.
Analysts say the strain is uneven: only one operator maintains relatively stable profits, while others operate on thin margins or continue to post losses.

With voice revenues stagnating and operating costs high, telecom companies say the current tax structure offers little scope for long-term planning.

Observers note that while telecom services have become essential utilities, the sector is still taxed as if it were high-margin, constraining investment, innovation, and raising concerns over network quality and sustainability.
Banglalink: Losses Persist
Banglalink is the hardest hit by the tax regime. After 26 years in operation, the company has yet to post a profitable year.

Serving roughly 40 million subscribers and holding a 22percent market share, it reported a Tk331 crore loss in the latest fiscal year. An additional 2percent turnover tax, imposed regardless of profitability, further restricts cash flow. Officials say that after meeting tax, spectrum, and licence obligations, little remains for network investment, forcing Banglalink to limit upgrades and expansion.

Robi: Profitable but Margins Thin
Robi, the second-largest operator with nearly 70 million subscribers, reached profitability only after more than two decades.
In the last fiscal year, it reported a turnover of Tk9,950 crore, with profits accounting for just 7percent of revenue. While growth in digital and enterprise services has improved results, high taxes and spectrum costs continue to constrain reinvestment in fibre backhaul, unified network management, and 4G service improvements.
Grameenphone: Leading but Pressured Grameenphone remains the only operator generating relatively strong profits, controlling 46percent of the market. In 2024, it reported a turnover of Tk15,845 crore and a profit of Tk3,630 crore, slightly lower than its post-tax profit in 2020.

However, analysts note that tax pressure has reduced its reinvestment capacity, with capital expenditure at Tk1,830 crore—a modest amount given rising data consumption and network demands.