4 cos to vie for 4 licences, BTRC to hold closed door bidding
There will virtually be no competition in the auction for four licences for 3G mobile services as four operators — Grameenphone, Banglalink, Robi and Airtel — on Thursday submitted bid earnest money while Citycell dropped out of the race. The Bangladesh Telecommunication Regulatory Commission move not to allow any observer or journalist in the auction scheduled for September 8 has further intensified the fear of a BTRC-operators nexus in holding the bid in a pre-planned way, said commission officials.
With the five existing mobile companies submitting applications for the 3G auction for three licences and no foreign firm bidding for another licence by the August 12 deadline, some BTRC officials were apprehending that there might be syndication among the local operators.
The four operators deposited $20 million in bid earnest money each while Citycell did not submit the money within the Thursday deadline.
The Citycell in a letter to the BTRC said the company had been going through a financial crisis.
State-owned Teletalk had got the licence by default.
‘The fear among us has deepened that there was syndication among the operators and BTRC following the submission of bid money by four companies for four licences,’ said an official.
The commission had modified the 3G guideline in a manner so that no foreign firm could attend the auction for a licence and local operators could get four licences instead of three.
BTRC chairman Sunil Kanti Bose and Association of Mobile Telecom Operators of Bangladesh secretary general TIM Nurul Kabir, however, brushed aside the allegations of any possible syndication.
Another BTRC official said that there was little chance of any competition for the licences. ‘It seems that the operators now will only compete for the amount of spectrum allocation,’ he said.
According to the auction process, a company will be able to take a maximum of 15 MHz against a licence.
The BTRC has divided 40 MHz spectrum into eight blocks of 5 MHz with a floor price of $20 million a MHz. The first call for the auction will be $21 million and after that each call will be $1 million.
In the first phase auction for 10 MHz would be held while in the second phase auction for 5 MHz and in the last phase auction for unsold spectrum would be held.
‘The auction process is designed in such a way that there could be no syndication,’ BTRC chairman Sunil Kanti Bose told reporters after the four operators submitted bid earnest money.
He, however, admitted that there would be no intense competition after Citycell dropping out of the race.
Sunil said that he was happy with the participation of four companies in the bidding for four licences.
‘There is no point in selling the spectrum in higher prices, which eventually make the 3G services of mobile operators unviable. We should focus on generating more revenue for the government by revenue sharing from the operators,’ he claimed.
Sunil said that Citycell sought time extension for submitting the bid earnest money but the commission rejected the plea. ‘We have given enough chances to Citycell as we allowed them to participate in the 3G auction despite the company’s failure to deposit money for the 2G licence fees.’
AMTOB secretary general Nurul told New Age that there was no syndication among operators. ‘All mobile operators are competitors to one another and will try to serve the best interest of their companies. So I don’t see any chance of any syndication,’ he said.
Commission sources said that the BTRC officials informed the parliamentary standing committee on the telecommunications ministry on Thursday that no observer from any other government agencies and journalists would be allowed in the auction.
‘This move also intensified the syndication fears as BTRC never barred journalists from attending any previous auction,’ said an official.
BTRC vice-chairman Md Giashuddin Ahmed told reporters that they would bar reporters inside the auction room. ‘There is no need to allow reporters inside the auction room. We will inform the reporters, who will be waiting outside, about the auction time to time,’ he said.
He claimed that there would be no lack of transparency in the auction because of such move.
BTRC earlier held open auctions, allowing journalists, in the auction room in 2008 for multi-million dollar licences for international gateway operations.
India in 2010 held an open auction for 3G licences in which the country raised more than $15 billion.
BTRC expects to raise at least $800 million from the four licences but the government has already conceded possible revenue income of hundreds of millions in taxes by relaxing the tax measures for the 3G service operations as per the demand of the operators.
The National Board of Revenue, under pressure from the government that wants to hold the 3G auction before the end of its tenure in October, recently reduced VAT on 3G licence to 5 per cent from 15 per cent in two phases.
The revenue board on August 6 exempted the mobile phone operators from paying 15 per cent VAT on their revenue from 2G and 3G services to be shared with the BTRC.
Earlier the government reduced the floor price of the auction from $30 million to $20 million meeting the operators’ demand.
The revenue board reduced the SIM tax to Tk 300 from Tk 600 in the national budget for the FY14.
NBR is also likely to cut its claim of Tk 3,100 crore SIM replacement tax from the four operators in the next few days.
-With New Age input
