Govt to rescue Teletalk

The government is set to rescue Teletalk from the tight corner it finds itself in by taking care of Tk 3,256 crore of the operator's dues.

The decision to covert Teletalk's debts to equity was taken in a meeting of the Executive Committee of the National Economic Council on Tuesday, said Tarana Halim, state minister for telecom, yesterday.

The state-owned mobile operator has about Tk 1,600 crore outstanding with the Bangladesh Telecommunication Regulatory Commission for 3G spectrum. This sum will now be written-off or showed as cleared.

Teletalk also has another Tk 1,656 crore outstanding with a Chinese bank. The government is the guarantor for the loan, according to Kazi Md. Golam Quddus, managing director of Teletalk; it will now pay off the amount.

Tarana said she would write to the finance minister by next week about the equity issue and is hopeful of getting an immediate response.

However, after the meeting the planning ministry sent out a press release that said Prime Minister Sheikh Hasina, who is also the telecom minister, has instructed Teletalk to search for a foreign company to merge with.

Market sources also said a Chinese company is interested in buying a stake in Teletalk and a certain group is also lobbying to make it happen.

Tarana, however, disputed the development."Right now, the government has no plans to merge Teletalk with any other company. Rather, the prime minister has asked us to expand the operator's network coverage and improve its service quality," she told The Daily Star after the meeting.

Tarana went on to cite the Tk 675 crore that Hasina has sanctioned for Teletalk's network expansion on Tuesday as a case in point of the prime minister's commitment to the venture.

"The option of merger with a foreign party was earlier discussed. But at the meeting we were able to convince the prime minister and she gave us the green signal."

The prime minister has a vision of delivering mobile service to the remotest parts of the country through the state-owned operator, according to the state minister. "She is convinced of Teletalk's potential," Tarana said.

"If these dues are counted as government equity it will be a great relief to us and we can move on to plan for 4G then," Quddus said.

The government has so far invested Tk 3,500 crore in Teletalk, and after getting the fresh equity investment the amount would soar to Tk 7,000 crore.

The move would also put the state-owned operator on a solid footing to compete with the other operators.

"Market leader Grameenphone has more than Tk 30,000 investment. Without injecting funds, it would be impossible for us to fight in the market," Quddus said.

Under the Tk 675 crore approved on Tuesday, the state operator will establish 1,500 3G sites and 1,000 2G sites, mostly targeting the growth centres and educational institutions, said a top official of Teletalk.

Currently, the operator has about 1,700 3G sites, with another 1,500 3G sites expected to be up and running by June next year.

"After the completion of these two projects, Teletalk will become a competitive player," the official said.

At present, Teletalk has 40 lakh active customers out of the industry total of about 13 crore.