• Thursday, September 18, 2014

Telcos' investment jumps manifold

Abdullah Mamun

The mobile industry invested Tk 33,515 crore last year on the purchase of 3G spectrum and networking equipment, while investment was 'zero' in 2012.
The mobile industry invested more than Tk 84,000 crore in the last 17 years, according to data from the Association of Mobile Telecom Operators of Bangladesh, the operators' lobbying group.
The numbers were shared at a workshop organised by Robi in Dhaka yesterday.
The operators may invest a further $1 billion to expand networks in the current year if the regulatory environment becomes flexible and friendly, TIM Nurul Kabir, secretary general of AMTOB, told The Daily Star after the workshop.
The tax administrator did not make the environment friendly for the operators, although they are the largest taxpayers, he said.
The regulatory environment has improved compared to previous years but the telecom law of 2001, which was amended in 2010, needs to be revised as the law puts investors at risk, Kabir said.
Licence violations by any telecom retailer may make the operator itself liable to a fine of up to Tk 300 crore, Kabir said.

The law has not yet specified the violations and punishments, he said.
The industry invested Tk 10,099 crore in 2011 and Tk 5,569 crore in 2010, which was only Tk 300 crore in 1997 when the industry made a debut in Bangladesh, according to a study by AMTOB.
The capital-intensive industry continues to invest in technological developments, said Ala Uddin, head of corporate finance of Robi.
Referring to data from AMTOB and Bangladesh Bank, the telecom industry alone invests 60 percent of total foreign direct investment in Bangladesh, which is around 10 percent of the national revenue.
The industry has paid more than Tk 53,000 crore to the government exchequer as taxes, revenue sharing and spectrum charges.
However, the industry is facing a huge tax burden, which has become a challenge against investment, Ala Uddin said.
For example, if Robi earns Tk 100 as revenue, it pays Tk 22 to the National Board of Revenue, Tk 28 to Bangladesh Telecommunication Regulatory Commission and Tk 9 as SIM tax; the company receives the rest Tk 41 that it continues to spend on capital and operational expenditures.
The telecom sector not only contributes to the government exchequer, but it also contributes to the country by creating a knowledge-based economy, said Mahmudur Rahman, executive vice president of Robi.
In contrast, the investors are not getting sufficient returns on their investment due to high taxes, he said.

Published: 12:00 am Tuesday, February 18, 2014

Last modified: 12:14 am Tuesday, February 18, 2014

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