Spectrum auction today

A crucial auction for spectrum bands that can support both fourth-generation (4G) and 5G technologies is set to take place in Dhaka today as the government looks to alleviate the sufferings of users stemming from the slower mobile internet speed.

The country's four mobile operators, including state-owned Teletalk, have already deposited earnest money with the Bangladesh Telecommunication Regulatory Commission (BTRC), confirming their participation.

The auction will take place at the Hotel InterContinental.

The regulator will award 60 MHz spectrum in six blocks from 2.3 GHz (2,300-2,400 MHz) bands and 120 MHz in 12 blocks from 2.6 GHz (2,500-2,690 MHz) bands through the open auction.

The base price per MHz is $6 million for both bands.

"It's a very crucial auction as it is suitable for both 4G and 5G. No auction for the spectrum that is supportive to for both 4G and 5G will take place in the future," Mustafa Jabbar, telecom minister, told The Daily Star.

"If the operators don't obtain the required amount of spectrum, their quality of services will be degraded and their expansion will be limited."

The minister said the government has kept the price of the bands low and provided flexibility in the payment schedule and rollout obligations.

"I hope operators will take the opportunity."

Three mobile phone operators bought 27.4 megahertz of spectrum for $885.35 million last year, taking Grameenphone's total spectrum to 47.4 MHz, Robi's to 44 MHz and Banglalink's to 40 MHz.

Teletalk's spectrum was at 25.2 MHz.

The spectrum department of the BTRC allotted 60MHz of the spectrum from 3.5GH to Teletalk on a refundable condition to allow it to launch 5G in December on a trial basis.

Industry people say the people and the government want a better quality of voice and data services, higher speed, lower prices and coverage improvement.

The rollout of 5G has been part of the current government's election manifesto in 2018.

Officials of private operators say it is getting tough for them to invest heavily in the spectrum due to the higher tax, one of the highest in the world, the very low average revenue per user, stagnation in voice revenue, and lower data price.

Besides, only 35 per cent of consumers use 4G devices, while the network coverage is more than 95 per cent, leading to a consistent low-profit margin.

An official of an operator says 2,300 MHz and 2,600 MHz are capacity bands, so a big chunk of spectrum is required to address the capacity. They are not the same as 900MHz/1,800MHz bands as 5 or 10 MHz of such bands were enough to cover a large area.

"Although the BTRC is saying that it has kept the spectrum price lower this time, it will lead to a higher spectrum price burden as the bigger block size is now required," said the official.

Such a higher price will lead to lower spectrum sold and lower investment in enhancing network capacity, again impacting the quality of service and deepening customer suffering. Unsold spectrum brings no benefit for consumers as well as the government, said an official.

Hossain Sadat, acting chief corporate affairs officer at Grameenphone, said: "We look forward to a transparent auction with fair outcomes."

"We welcome the auction. It is an important auction for further enhancing 4G experience and 5G readiness."