Major telcos may shun spectrum auction

Four top mobile phone operators may not take part in the forthcoming spectrum auction as some of the key issues that the government promised to sort out during the last bidding remain unresolved.

In a joint letter, Grameenphone, Banglalink, Robi and Airtel drew Finance Minister AMA Muhith's attention to their "investors' inability to recommend participation" in the auction for 1,800 MHz and 2,100 MHz bands, due to be held on April 30.

The auction gives operators an opportunity to acquire more bandwidth, needed to maintain service quality to their fast expanding customer base.

Furthermore, the 1,800MHz spectrum is the international standard band for the fourth-generation wireless broadband service that provides fast internet.

But in Bangladesh, operators are using some of the 1,800MHz spectrum to provide 2G service and some for 3G service, so more bandwidth is needed in preparation for the eventual roll-out of 4G service.

In the letter on March 1, the operators said their participation in the 2,100MHz auction in 2013 was on the basis that certain tax disputes, including those on SIM replacement and VAT on spectrum, would be resolved within a framework agreed with the government.

It was also agreed that the telecom policy would be updated and improvements made to the investment framework including the introduction of technology neutrality for spectrum and development of a spectrum roadmap to improve predictability.

"We regret that we have yet to see resolution of the outstanding taxation issues," said the letter, adding that a positive revision of the telecom policy and improvements in the investment framework would further enable growth for the sector to the benefit of consumers.

A progressive tax policy and a more predictable regulatory environment are necessary to sustain investor confidence, according to the letter.

"We hope immediate concrete steps will be taken to address our concerns. This is required to support operators in making individual decisions on participation in the planned auction." 

The letter was signed by Jamaludin Ibrahim, president and group chief executive officer of Axiata Group, which owns Robi; Jon Fredrik Baksaas, president and group CEO of Telenor Group, which owns the majority of Grameenphone; Jo Lunder, CEO of VimpleCom, the owning company of Banglalink; and Sunil Mittal, chairman of Bharti Airtel, which owns Airtel.  

Grameenphone, Banglalink, Robi and Airtel together control 95.75 percent of the country's 12.18 crore mobile phone subscribers market, according to Bangladesh Telecommunication Regulatory Commission.

The government plans to update the National Telecommunication Policy and Bangladesh Telecommunication Regulatory Act, make a spectrum roadmap and draft licensing guidelines, according to a draft of reform measures it submitted to the World Bank recently.

The government's planned spectrum auction and guideline have already created a lot of debates.

Last month, the GSMA, the global association of mobile operators, urged Bangladesh to seek public consultation before the auction.