Bangladesh will gradually reduce telecommunications taxes every two years over the next five to ten years as part of a long-term strategy to strengthen the country’s digital economy, stimulate investment, accelerate smartphone adoption, and expand next-generation connectivity infrastructure.
The announcement was made by Prime Minister’s Adviser on Posts, Telecommunications and Information Technology Rehan Asif Asad during the launch of Grameenphone’s nationwide 700 MHz spectrum deployment, which marks the first nationwide rollout of the low-band spectrum by a mobile operator in Bangladesh.
The proposed tax reductions form part of a broader digital transformation agenda extending to 2030, with the government aiming to create a more competitive telecommunications market while positioning Bangladesh as one of the world’s fastest-growing digital economies.
According to Asad, Bangladesh currently maintains one of the highest taxation burdens on telecommunications services globally despite having a tax-to-GDP ratio of only 6.5%, among the lowest in the world. He said industry consultations consistently identified taxation as one of the biggest barriers to investment, affordability, and digital adoption.
The government has therefore incorporated a phased reform approach into its long-term planning, balancing the need for public revenue generation with the objective of expanding digital access and encouraging private-sector investment.
Digital Economy Vision Targets Top-Ten Global Consumer Market Status
The telecom reforms are part of a wider national strategy that seeks to transform Bangladesh into what officials believe could become the world’s ninth-largest consumer and digital economy by 2029.
To achieve this, the government has identified four strategic pillars:
- Connectivity
- Digital Public Infrastructure (DPI)
- Data Centres and Artificial Intelligence
- Electronics Manufacturing
Connectivity remains the immediate priority.
Asad described 5G as the “oxygen of the digital ecosystem” and urged operators, vendors, and regulators to accelerate preparations for nationwide next-generation mobile services.
The government is also focusing on expanding broadband access, improving network quality, and reducing the cost of digital participation for consumers.
Smartphone Adoption Remains a Key Challenge
One of the government’s primary concerns is smartphone penetration.
Officials estimate that approximately 50% of Bangladesh’s population still does not own a smartphone, limiting access to digital services, e-commerce, digital payments, online education, and government platforms.
As part of budget consultations, the government engaged local handset manufacturers to identify policy and taxation measures that could lower smartphone production costs and make devices more affordable for low-income consumers.
Several of those recommendations have reportedly been incorporated into the latest budget proposals.
The strategy reflects growing recognition that connectivity alone is insufficient unless consumers have affordable devices capable of accessing digital services.
Bangladesh to Launch First National Digital Public Infrastructure Framework
The government also revealed plans to begin work next month on Bangladesh’s first national Digital Public Infrastructure (DPI) programme.
The initiative will be built around a framework of:
- One Citizen
- One Digital ID
- One Digital Wallet
Under the proposed system, every citizen would be assigned a digital identity and connected to the digital economy through a secure digital wallet.
The model mirrors emerging digital public infrastructure frameworks seen in markets such as India, where digital identity and payment systems have become foundational components of financial inclusion and digital service delivery.
Officials believe the initiative will help accelerate access to government services, digital payments, financial inclusion programmes, and digital commerce opportunities.
Data Centres, AI and Electronics Manufacturing Identified as Growth Engines
Beyond connectivity and DPI, Bangladesh is prioritizing investments in data centre infrastructure, artificial intelligence capabilities, and electronics manufacturing.
The government intends to support local innovation ecosystems by opening digital platforms to startups, developers, freelancers, and technology entrepreneurs while allowing private-sector companies to build services and applications on top of government-enabled infrastructure.
Officials also confirmed that electronics and consumer electronics manufacturers will continue receiving long-term incentives over the next decade to encourage domestic production and attract investment.
The strategy is designed to reduce dependence on imports while creating employment opportunities and strengthening Bangladesh’s position within global technology supply chains.
Grameenphone Launches Nationwide 700 MHz Coverage
The announcement coincided with Grameenphone’s launch of nationwide services using the newly acquired 700 MHz spectrum band, becoming the first operator in Bangladesh to deploy the frequency nationwide.
The Bangladesh Telecommunication Regulatory Commission (BTRC) allocated 10 MHz of 700 MHz spectrum to Grameenphone earlier this year for a period of 13 years.
The operator is expected to contribute approximately Tk 2,200 crore to government revenues over the duration of the allocation.
Low-band spectrum such as 700 MHz is particularly valuable because it provides broader coverage, stronger indoor penetration, and improved connectivity in rural and underserved areas.
Grameenphone CEO Yasir Azman said the deployment will strengthen 4G performance while providing a foundation for future technologies including 5G, artificial intelligence, and IoT services.
The rollout is expected to improve network quality, increase data speeds, reduce latency, and enhance digital access across both urban and rural regions.
Editor’s Note
Bangladesh’s latest telecom and digital economy strategy represents one of the most comprehensive policy shifts seen in South Asia in recent years.
The significance extends beyond tax reductions. The government’s roadmap signals a transition from viewing telecommunications as a revenue-generating sector to treating digital infrastructure as a national growth engine.
This distinction matters.
Historically, many emerging markets imposed heavy taxes on telecom operators, devices, and digital services because the sector generated reliable government revenue. However, excessive taxation often slows network investment, increases consumer costs, reduces smartphone adoption, and ultimately limits digital economy growth.
Bangladesh appears to be adopting a longer-term view by gradually reducing sector taxes while simultaneously investing in connectivity, digital identity, AI infrastructure, and electronics manufacturing.
The proposed Digital Public Infrastructure initiative could prove particularly transformative. Global experience increasingly shows that digital identity, payments infrastructure, and interoperable public platforms create the foundation for innovation across fintech, e-commerce, healthcare, education, and government services.
The emphasis on smartphone affordability is equally important. With half of the population still lacking smartphone access, device affordability may represent one of the largest barriers to digital inclusion. Expanding connectivity without expanding device ownership risks leaving significant segments of the population excluded from the digital economy.
The deployment of 700 MHz spectrum by Grameenphone complements these objectives by improving coverage quality and extending broadband access into underserved regions. Infrastructure, devices, and digital services must evolve together if digital transformation goals are to be achieved.
The broader implication is that Bangladesh is attempting to build a complete digital economy framework rather than pursuing isolated technology initiatives. By combining regulatory reform, connectivity expansion, digital identity infrastructure, AI development, and manufacturing incentives, the country is laying the groundwork for long-term digital growth.
If execution matches ambition, Bangladesh could emerge as one of South Asia’s most dynamic digital markets over the remainder of the decade.
