Mobile phone companies are putting pressure on Bangladesh Telecommunication Regulatory Commission to reduce the fees they must pay to obtain a renewal of its licence, according to BTRC officials.
The BTRC has published a draft guideline concerning the renewal of the 2G mobile licences of four mobile operators — Grameenphone, Banglalink, Robi and CDMA operator Citycell — as their current licences are due to expire at the end of November 2011.
This states that the four companies will have to pay a total of Tk 14,579 crore for a 15-year licence – the exact amount of each company in part dependent on their subscription base.
Grameenphone will have to pay the most at Tk 7,056 crore. Banglalink will have to pay Tk 3,300 crore to renew its licence, Robi will have to pay Tk 3,163 crore and Citycell will need to pay Tk 1,020 crore.
For Grameenphone, Tk 7,056 crore represents between four and five times the level of profits after tax that the company made in 2009. In that year, the company made Tk 1,500 crore.
Industry insiders, however, told New Age that the level of licence renewal fees is less than it should be as it has been fixed on the basis of existing subscribers’ status rather than the number of subscribers projected in the future.
Furthermore, they say, the cell phone operators since their inception have been enjoying the facilities of a large portion of the frequency spectrum at no cost, as the law was unclear.
Other countries including India, Pakistan and Nepal have been earning millions of dollars against the spectrum allocation.
Asked why the BTRC fixed the licence renewal fees on the basis of existing subscribers’ status causing possible loss in revenue earnings of the government, the BTRC chairman, Zia Ahmed, said, ‘You see, I am under pressure from different quarters.’
‘A vested group is conspiring to reduce the proposed fixed amount of fees for the cell phone operators. Even the parliamentary standing committee on post and telecommunication ministry also asked me why I fixed such a large amount of licence fees,’ Zia Ahmed told New Age on Saturday.
‘Anyway, I can say that we have done justice to the peoples’ requirements as the government did not get a single taka from using this part of the spectrum in the past,’ he said.
A top official of the Association of Mobile Telecom Operators Bangladesh told New Age on condition of anonymity that the mobile operators would not be able to pay this ‘huge amount of money’ to secure a licence renewal.
‘It would be a huge blow for the industry,’ he complained.
mobile phone companies, however, deny they are putting any pressure on the regulator. A Grameenphone executive said, ‘We are currently studying the document. We will make comments only once our analysis is completed.’
Robi’s chief communication officer Mohiuddin Babar said the BTRC should fix the fees for licence renewal in consultation with the stakeholders.
‘I think the huge amount of fees the BTRC has proposed for licence renewal will discourage foreign investment in the country,’ he added.
According to statistics of the BTRC, the six cell phone operators were given a total of 65 MHz of frequency free of cost while they paid Tk 2160 crore for using 37MHz of frequency.
According to the proposed fees set out in the draft guideline, the licencees will have to pay Tk 50 crore to obtain the frequency and an ‘assignment fee’ of Tk 150 crore for each megahertz they will use of GSM 1800MHz band and the same amount for each megahertz of CDMA 800MHz Band.
The assignment fee for GSM Band 900MHz is proposed at Tk 300 crore for each megahertz.
Asked about having allowed cell phone operators the use of part of the spectrum free, Ahmed said, ‘From now onwards, no frequency will be given free of cost.’
According to the current licensing guideline, mobile phone operators’ licences can be renewed for five years after the completion of a successful fifteen years of operation. But, the regulator has decided to renew the terms for fifteen years similar to the licence terms for a new entrant.
Officials within some telecom companies said that 15-year licences would discourage both new companies coming into the market and mergers and acquisitions. This, they say, would allow the existing operators to operate with little pressure.
Asked why the licensing renewal period has been proposed for 15 years instead of five years, Zia Ahmed said, ‘We think that the companies must be assured of doing business for a longer period as they are paying a handsome amount of money for the licence.’
There are 68 million mobile subscribers in Bangladesh at the end of December 2010. This represents an impressive gain of over 13 million subscribers since the start of 2010, suggesting that the market is not yet saturated.
The draft guideline is on BTRC’s website for allowing people concerned to give their opinions in this connection by February 9, 2011.
