Undue frequency allocation by BTRC causes Tk 840cr govt loss

CAG audit finds GP, Banglalink, Robi get frequency at lower rate
The government lost Tk 840 crore in revenue as Bangladesh Telecommunication Regulatory Commission in 2008 allocated additional 12 MHz frequency to three mobile phone companies for 18 years with lower charges, a government audit found.
The BTRC unduly allocated the 12 MHz frequency to three operators for 18 years in 2008 whereas the license validity of the companies was scheduled to expire in 2011, revealed the audit report of the Comptroller and Auditor General’s office.
The telecom regulator allocated additional 7.4 MHz frequency to Grameenphone, 2.6 MHz frequency to Banglalink and 2 MHz frequency to Aktel in 2008 for 18 years and took payment at a price of Tk 80 crore for each MHz.
It said the BTRC in 2005 formulated the Spectrum Pricing Policy and fixed the price of per MHz frequency of GSM 1800 band at Tk 80 crore in 2008.
The BTRC in 2011 formulated the regulatory and licensing guideline for the mobile operators and set per MHz price for GSM 1800 band at Tk 150 crore.
‘The license validity of the three companies was supposed to expire in 2011, so the BTRC in 2008 should not have allocated the frequency for additional 15 years,’ said that CAG report.
‘Before any government decision about the license renewal of the three companies, the BTRC unduly allocated the frequency for additional 15 years which caused the revenue loss,’ the audit report said.
The mobile companies renewed their licences in 2012 with effect from 2011.
Considering the market competition factor, the BTRC should adjust the current price of per MHz, which is Tk 150 crore, with that of 2008 as the companies got the frequency allocation beyond their license validity, said the report.
It is also mandatory to find the responsible persons who decided to provide such undue favour, it said.
In response to the audit objection, the BTRC said, as no operator was willing to take the frequency allocation for three years before their license expiry date at the cost of Tk 80 crore per MHz, the commission allocated the frequency for 18 years as per ‘operators’ demand’.
The BTRC claimed the decision of allocating frequency was ‘logical’.
Following the BTRC reply, the Post and Telecommunication ministry suggested the CAG office to dispose of the audit objection.
The audit office, however, rejected the BTRC reply and recommended for collecting Tk 840 crore either from the three operators or the BTRC officials liable for the decision.
‘The BTRC allocated the frequency for 18 years knowingly that the licenses will be expiring in three years. Spectrum frequency is a limited government resource which the BTRC should ensure proper use,’ it said as a reason for rejecting the BTRC reply.
‘We have given our reply to the audit office. If the CAG office is not satisfied with our reply it can place the objection before parliament. Then we will take action as per the decision of the Public Accounts Committee of the parliament,’ BTRC chairman Sunil Kanti Bose told New Age when asked about the issue.
Officials of three mobile companies declined to comment on the audit objection.

-With New Age input

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