3G mobile service auction today
4 cos vie for 4 licences with no competitionAhmed Shawki
Four mobile phone operators of the country are poised to be nominated for 3G mobile services as the Bangladesh Telecommunication Regulatory Commission holds auction for four licences today.
As there is no competition for the licences, the operators will ‘compete’ for allocation of 40MHz of spectrum, which has been divided into eight blocks of 5 MHz with a floor price of $20 million a MHz, said BTRC officials.
They said although it should be a historic event for the country’s telecom sector, the fear over syndication between BTRC and operators remained a thorny issue.
‘The events prior to the auction including relaxation of taxes for operators and non submission of bids by any foreign operator indicate syndication between BTRC and mobile operators,’ said an official.
BTRC held a mock auction on Saturday where four participants — Grameenphone, Banglalink, Robi and Airtel — were present.
Sources present in the mock auction said a leading mobile phone company took 15MHz spectrum and other three operators took 5MHz spectrum each while 10MHz remained unsold.
They said in the mock a leading operator placed two bids where 10 MHz spectrum was sold for $22 million and 5MHz spectrum was sold for $23 million which was the highest amount for any spectrum block in the mock 3G auction.
‘The mock auction should not be considered for any thing. But in the real auction, it seems there will be no competition as four companies will vie for four licences with a plenty of spectrum for them,’ a senior BTRC official told New Age after the mock auction at the Ruposhi Bangla Hotel in Dhaka.
There is a possibility that that some spectrum would remain unsold.
He, however, said that they feared all operators would go for 10MHz each with the base price or one call from the base price. ‘If a leading company wants to take 15MHz, it will have to manage a smaller operator to take 5MHz,’ he said.
In the first phase, auction for 10 MHz would be held while in the second phase auction for 5 MHz and in the last phase auction for unsold spectrum will be held.
Although initially five local operators including Citycell applied for participating in the auction for three licences with no foreign operator applying for another licence, Citycell dropped out citing financial crisis.
BTRC officials said that the BTRC set the criteria for foreign operators for a licence in such a way so that no company could appear in the auction, following pressure by the existing mobile companies. The BTRC then decided to give all four
licences to local operators.
BTRC and National Board of Revenue officials said that the Awami League-led government was desperate to hold the 3G auction before the end of its tenure in October.
‘As a result, the government conceded millions of dollars in possible taxes from the operators which took the opportunity to squeeze benefits by threatening time and again that they would not participate in the auction,’ said a NBR official.
The NBR, under pressure from the government recently reduced proposed VAT on 3G licence to 5 per cent from 15 per cent in two phases.
NBR officials said because of the reduction of the VAT the mobile companies would get at least $80 million in benefits initially from the spectrum price payment.
BTRC expects to raise at least $800 million from the four licences.
The revenue board on August 6 exempted the mobile phone operators from paying 15 per cent VAT on their revenue from 2G and 3G services to be shared with the BTRC.
Earlier the government reduced the floor price of the auction from $30 million to $20 million meeting the operators’ demand.
The revenue board reduced the SIM tax to Tk 300 from Tk 600 in the national budget for the FY14.
NBR is also likely to cut its claim of Tk 3,100 crore SIM replacement tax from the four operators in the next few days.
The state-run Teletalk will get the fifth 3G licence by-default by matching the highest bidding price.
According to the 3G guideline mobile phone companies have to introduce the 3G service within six months from the getting the license.
Officials of different mobile companies said they would launch the service of 3G within three months which will enable users to browse high-speed internet, GPS system and many other features.
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