Internet: Can local ISPs survive the coming storm?

The internet revolution in Bangladesh did not begin with global tech giants or mobile operators. It began with local Internet Service Providers (ISPs) who, through personal grit and grassroots innovation, laid fibre optic cables across alleys, towns, and remote areas. In the early 2000s, young entrepreneurs in cities like Dhaka, Narayanganj, Khulna, and Chattogram risked their savings to build networks that connected people to knowledge, jobs, and the wider world. These homegrown pioneers helped open the doors to freelancing, digital learning, and social media long before smartphones became ubiquitous. During the COVID-19 crisis, it was these ISPs who kept education and businesses running.

A New Era of Threats

Today, this sector faces an existential threat. A draft BTRC policy proposes allowing mobile network operators to offer wired broadband using both radio and fibre technologies-first to enterprises, and potentially to households next. On top of that, satellite providers like Starlink are knocking at the door, bringing global competition to local turf.

Yet the problems aren't just external. Frequent disconnections, poor customer service, unstructured cabling, and vague pricing have eroded public trust. But industry insiders argue the roots of this crisis lie deeper: excessive taxation, revenue-sharing burdens, layered VAT, the Social Obligation Fund (SOF), and the ban on infrastructure sharing have all stifled growth. Years of appeals to address these barriers have largely been ignored.

What Still Sets ISPs Apart

Despite mounting challenges, local ISPs still hold critical advantages. They are deeply embedded in their communities, quick to respond to service calls, and often more affordable than mobile alternatives. Unlimited broadband at 10 to 15 Mbps is still available for just 500 taka-a competitive offering by any measure. Their local networks are often more reliable, particularly during peak usage hours, and many enjoy strong trust built over years of personalised service. A Sector in Need of Transformation

But trust alone will not ensure survival. ISPs must urgently transform their business model. Continuing to offer low-cost, low-quality services is no longer viable. Investment is needed in core infrastructure, redundancy systems, and network monitoring. Customer service must be professionalised with proper helpdesks, live chat, and smart ticketing systems.

At the same time, ISPs must embrace in-house technology development-building their own CRM platforms, billing systems, and real-time alert tools. Associations must also step up advocacy to create a level playing field. Without clear policy support, ISPs will remain disadvantaged against global and mobile competitors.

There is also room to strengthen ties with communities. Through digital literacy campaigns, school partnerships, and internet awareness events, ISPs can reinforce trust and deepen their grassroots presence. Rural and semi-urban markets remain underexplored, with rising demand and less competition. Diversification is key-services like IP telephony, IPTV, cloud storage, and local CDN solutions can open new revenue streams and future-proof the business model.

What the Government Must Do

On April 19, 2025, the ISP Association pledged to offer 10 Mbps internet for 500 taka. This prompted IIG and NTTN providers to promise discounted bandwidth and infrastructure. Yet these promises remain unfulfilled. This highlights the urgent need for government intervention and regulatory enforcement.

The state must allow infrastructure sharing among ISPs, recognise internet service as an IT-enabled service, halt revenue sharing on internet access, and suspend the SOF collection. These measures are essential for fair competition and sectoral innovation.

A Crossroads for Connectivity

Bangladesh's ISP sector is at a turning point. This industry brought the internet into homes, empowered youth, supported remote learning, and kept services running in a pandemic. Yet now, these same providers face the risk of extinction.

The question is no longer about capability-the ISP sector has the experience, reach, and trust. The question is whether the government will choose to stand by these digital pioneers or let them be swept aside as mobile and foreign giants take over. For the sake of our digital future, the choice should be clear.

The writer is Chairperson of the Bangladesh Internet Governance Forum