The government has decided to take a billion-dollar loan from Korean company LG U+ for expanding Teletalk’s network coverage and making the state-run operator’s infrastructure 5G compatible.
The Korean company has offered $1.2 billion as loan last year and the proposal was placed before Prime Minister’s ICT Affairs Adviser Sajeeb Wazed Joy in a meeting recently, where he gave the green signal, according to officials working on the matter.
Teletalk has only 48 percent network coverage while its competitors have covered more than double the geographical areas, said Telecom Minister Mustafa Jabbar.
“We can’t compete with anyone with this coverage.”
To bring Teletalk up to speed with the other operators a huge amount of investment is needed.
“And LG’s offer for Teletalk is a good option. They have offered $1.2 billion but I don’t think we need that much as Teletalk does not build any tower.”
The proposal’s pros are that Bangladesh will not need to take any sovereign guarantee for the loan and the interest rate is only 3 percent and the tenure of the loan 25 years, according to Jabbar.
“And we also have the scope to negotiate,” he added.
As of June, there are 16.18 crore active mobile connections, of which Teletalk have a 2.37 percent market share, according to the Bangladesh Telecommuni-cation Regulatory Commission’s monthly report.
LG also wants to improve Teletalk’s core network to make it capable of handling 2.4 crore customers, reads the proposal.
“Teletalk had the first-mover advantage when 3G service was launched but not in case of 4G. We want to have the first-mover advantage when 5G is rolled out,” Jabbar said.
The government has targeted to launch 5G commercially by 2023.
Now that the prime minister’s ICT affairs adviser has given his nod Teletalk will now contact LG for further negotiations, said a senior official of the state-owned operator.
Teletalk also has other options in hand, such as a Tk 3,282 crore-project for 3G and 4G network expansion, according to Jabbar.
Since Teletalk is lagging behind in 4G coverage the project will upgrade its network. And when it is time for 5G roll-out a little additional investment would make the network ready to deliver the latest technology. The proposal was placed before the planning commission last year but found no response.
Saudi Telecom Company is also engaged in a dialogue with the government on seven projects including telecom. However, it is not certain whether they will invest in Teletalk.
“The process is slow and there are some challenges as well,” Jabbar said. The state-run operator is also running some projects to expand the network but those are not sufficient.
“One year ago Teletalk’s total investment was only Tk 3,600 crore while Grameenphone’s was about Tk 40,000 crore. None can expect a healthy competition with this minor investment,” the minister added.