The auction of the Bangladesh Telecommunication Regulatory Commission for 3G mobile services has flopped as the government bagged much lower revenue by selling the spectrum than expected target, said a number of officials of the commission.
The four operators — Grameenphone, Banglalink, Robi and Airtel— bought 25 MHz spectrum on Sunday from available 40MHz by paying only $21 million each MHz whereas the opening base price was $20 million a MHz.
The government expected that it would net in revenue worth at least $800 million from four licences but it could only get $525 million as GP took 10MHz with $210 million, Banglalink, Robi and Airtel took 5 MHz each with $105 million an operator.
Many of the commission officials, however, initially expected that the 3G auction might net in more revenue as similar auction in neighbouring India saw the government getting double the revenue it expected.
Officials said the possible competition among the mobile operators was marred as the BTRC set the criteria for foreign operators for competing for a licence in such a way so that no company could appear in the auction, following pressure by the existing mobile companies to eliminate competition.
The BTRC then decided to give all four licences to local operators.
‘The commission changed the auction process and the 3G guideline as per operators demand which discouraged new foreign operators to enter the market and eliminated the competitions factors,’ a senior BTRC official told New Age after the auction.
He said the BTRC repeatedly changed its stance on some critical issue which made the auction nothing but a formality to allocate the spectrum.
The 3G auction of India, which stretched for 34 days, the government target was to raise nearly $7 billion from the auction but finally the amount doubled to $11 billion because of intense competition among seven companies.
‘We do not expect the level of success like India as its market depth and operators’ number is very big. But we could have ensured better competition,’ said another senior BTRC official.
He said during the Wimax licensing auction in 2008 held by BTRC, the event continued for 26 hours and the auction price ultimately went 10 times higher than the base price.
The base price in Wimax auction was Tk 25 crore which went as high as Tk 215 crore.
From the three winners two paid the price while one operator declined to pay the amount saying it was too high.
‘It is true that the Wimax auction price went too high considering the market depth. It rose 10 times from the base price which would not have brought good result in 3G auction. But there should have been a minimum competition,’ he said.
The bidding for the three phase auction started at 11am which lasted for only one hour as no operator competed with each other.
BTRC chairman Sunil Kanti Bose, however, claimed that the price for the spectrum could be lower if it facilitated the operators to reach the service to the people.
‘I don’t mind selling the spectrum at $15 million a MHz if it helps the industry people to reach the service to the people in better way,’ he told reporters after the auction at the Ruposhi Bangla hotel.
He said the decision of imposing tight condition for the foreign operators was right.
‘The existing operators could have gone to the court if the government had relaxed the provision for new foreign entrant. I think the decision ensured parity,’ he said.
-With New Age input
