New entity to pay Tk 500cr for using Airtel’s spectrum

The new entity after the merger of Robi and Airtel will have to pay more than Tk 500 crore in fees for using Airtel’s existing spectrum in the 1800 band, according to a proposal of the telecom division.

Additional charges and fees were also proposed for the merger.

The recommendations that are currently under the consideration of the prime minister, who is also the line minister for telecom, seek additional payments to adjust the spectrum prices with those in 2011, a senior official of the telecom division said. 

The Prime Minister’s Office may apprise the High Court of a decision on June 2.

Airtel, for Tk 340 crore, bought 15 MHz spectrum in the 1800 band for fifteen years in 2005. This translates to Tk 1.51 crore per MHz per year in spectrum price for the licence duration.

However, Robi and other operators got spectrum for a higher average price in 2011 -- Tk 150 crore for 15 years -- meaning per MHz spectrum price a year was Tk 10 crore.

“Now if the merged entity wants to retain this spectrum, it will have to pay the rest to match the price of 2011,” the official of the telecom division said, asking not to be named.

State Minister for Telecom Tarana Halim and Telecom Secretary Md Faizur Rahman Chowdhury declined to comment on the issue.

However, the telecom division’s recommendations did not mention anything about the 3G spectrums in the 2100 band, as all operators paid the same $22 million for each MHz for 15 years.

In the merged entity, there will be 471.41 crore shares in total, of which 117.85 crore (25 percent) will belong to Airtel Bangladesh.

Robi’s Japanese partner NTT Docomo will hold 29.73 crore shares or 6.3 percent of the total stake.

Axiata Investment (Labuan) Ltd will be the lead shareholder with 323.83 crore shares, and Axiata Group will have 900 shares. Four other partners will be in the board with only 10 shares each. The telecom division also allowed for the continued use of the numbers beginning with '016', currently allocated to Airtel, for the next two years, though no new number of the series shall be sold during the time.

However, those numbers must all be converted to the '018' series after two years, according to the recommendations.

Robi and Airtel opened talks on a possible merger at the end of August last year, and on January 28 the operators' parent companies signed a deal to that effect. If merged, the entity will be the second largest operator in Bangladesh.

As of March, Robi has 2.75 crore active SIMs, while Airtel has 1.02 crore.

Market leader Grameenphone has 5.62 crore active users and Banglalink 3.19 crore.