Licensing process turns dubious

The beauty contest for awarding the licence for the much-awaited mobile number portability (MNP) service turned into an ugly competition as the telecom regulator recommended a company that does not meet the conditions it set in the guideline.

A beauty contest auction is a procurement mechanism where considerations other than price are of importance to the buyer. Sellers submit multidimensional bids, including reputation and speed of delivery, and the buyer awards the contract to a seller of his choice.

The Bangladesh Telecommunication Regulatory Commission recently recommended Infozillion BD Teletech Consortium, a joint venture of a local and foreign firm, for the licence by showing that they have gotten the highest marks from the technical evaluation committee.

But senior officials of the telecom regulator, who were also members of the evaluation committee, said Infozillion did not even meet up all the conditions.

Mobile number portability is a technology that allows customers to change their operators anytime without changing any single figure of its existing eleven digit number. The government has fixed Tk 30 as charge for the service.

The BTRC had first postponed and then cancelled the open auction scheduled for September 28 last year for awarding the MNP licence amid security concerns as all the selected firms had foreign partners. Subsequently, it decided to go for a beauty contest auction.

One of the conditions set by the BTRC in the guideline for the auction was that the applicants must have experience of handling a minimum of 10 million customers over a three-year period in any market.

In its application, Infozillion claimed their foreign parent, Teletech, a Slovenian company, has about 24 million customers using MNP service in three markets -- Armenia, Montenegro and Slovenia.

However, according to the International Telecommunication Union's latest report, the total active connections in the three countries are 6.86 million, though their total population is less than 5 million.

Armenia has 3.43 million connections, Slovenia 2.39 million and Montenegro 1.04 million active mobile connections, according to the ITU.

BTRC officials also noticed this information but disregarded it during evaluation.

About its foreign partner's insufficient experience in implementing and operating MNP, Mabroor Hossain, managing director of Infozillion Limited, said: “They mentioned in their application that right now they are operating in three countries with a customer volume of more than 24 million.”

However, he denied mentioning how many customers Teletech have managed to port successfully.

“Porting number is not important. Rather, how many customers are connected with our partner's network in those countries is more important,” he added.

Referring to the guideline, Aneek R Haque, a lawyer of the Supreme Court, said this is a clear violation of the telecom regulator's own guideline.

“In my view this company is not eligible for the licence if we go through the guideline,” said Haque, who is also the former legal consultant of BTRC.

He also said there are some other confusion in the guideline and if any one challenges those clauses the licensing procedure may be delayed further.

The telecom regulator has been trying to introduce the MNP service, which would help bring more competition to the market and improve the service quality, for the last few years but it kept getting delayed for one reason or the other.

According to the application, Infozillion's foreign partner Teletech has 10 percent shares in the joint venture.

However, Infozillion Limited's 51 percent shares are currently occupied by foreign partners, according to the documents that the joint venture submitted to the BTRC.

Officials who are related with the process said it means in the joint venture the total foreign share holdings comes to 55.9 percent, which is also a violation of the guideline.

The guideline said the foreign equity in the joint venture will not cross 51 percent.

Hossain said they have furnished all the documents and will be compliant to the guideline, though he has no official confirmation about the BTRC's recommendations.

“Once the licence is awarded, the company will form a new company and over there we will get the chance to reduce the foreign shareholding,” said Hossain, who is also a director of Hosaf Group, a company that was involved in money laundering between 2003 and 2007.

BTRC Chairman Shahjahan Mahmood said they have not independently verified Infozillion BD Telelech Consortium's information. “This issue have not come up if we had not recommended it for the licence,” he said.

The BTRC chairman said they have made its recommendation on the basis of the information placed by the companies themselves. “We have to take this information to be correct.”

The recommendation now is in the prime minister's office as Sheikh Hasina, who also heads the posts, telecommunications and information technology ministry.

If the debates had come up earlier, BTRC would have been able to verify them independently, he added.

On September 12, BTRC send its recommendation to the telecommunication division, in which it mentioned that Infozillion got 92 marks out of 100.

Four other joint ventures applied for the licence: Greentech Mediafon (87), Brazil-Bangladesh Consortium (84), REVE Number (82) and Royal Green (53).

The licence acquisition fee has been set at Tk 10 crore, and the winning company will have to share 15 percent of its revenues with the government from the second year onwards.

The company must provide the service within 180 days of getting the licence.

Discussions on MNP started in 2009 and in June 2013, BTRC asked the mobile phone operators to introduce this service by January 2014. But the operators failed to do so.

Later, the BTRC decided to appoint a third-party company to implement the service.

Currently, some 72 countries including neighbouring India and Pakistan have introduced the service, with Singapore being the pioneer in this field.