High price for new frequencies puts mobile operators in dilemma

The country's top three mobile operators are in a dilemma over whether to add new frequencies as the telecom regulator has set a price of Tk100crore per MHz per year, a massive increase on previously.
Responding to the mobile operators plea for additional frequencies in order to improve their services and cope with the rapid growth in users, the telecom regulator BTRC decided to allocate 17.6 MHz to them last week.
However the operators have been shocked by the price. Previously they were paying between 3-4 crore per MHz.
BTRC sources said the country's three leading mobile operators Grameenphone, Banglalink and Aktel applied to Bangladesh Telecommunication and Regulatory Commission (BTRC) last month.
"Certainly, we need additional frequencies to improve our network quality. But the price that BTRC claimed will definitely be a burden for us," said a high official of a mobile phone operator.
However BTRC officials said the price that is being offered to the operators is not so high compared to other countries. "Frequency is a natural resource and a nation's asset, and should be sold at a fair price," a high official of the telecom regulator said.
He said at one time BTRC allocated frequencies free of cost, adding that the decision was a wrong one as obtaining frequencies in other countries entails high costs.
According to BTRC sources, on the basis of their existing customer base Grameen may get 7.5 MHz, Banglalink 5.1MHz and Aktel 5MHz, respectively, in addition to their existing frequencies. If these operators add new frequencies, the amount of Banglalink and AKTEL's frequencies will be 17.5Mhz and 17.8Mhz respectively.
At present the mobile operators share around 80MHz.
Industry insiders said the three operators might go for bargaining with the BTRC for a price cut.
During the past year, mobile operators claimed that the lack of frequencies was one of the main reasons for the deterioration in service quality with increased numbers of dropped calls and network busy signals.
They also claim their costs increase as operators are forced to build more base stations to compensate for the lack of frequencies.
At present there is a little relationship between the number of subscribers and frequency allocation. This has led to a situation where the country's smallest mobile operator, state owned Teletalk, has the largest amount of frequencies.
As of May 2008, the number of mobile phone customers reached 42 million and this rapid increase has caused problems among the larger operators that concerns inadequate frequency allocation.