Govt eyes to earn Tk 11,000cr from 4G auction

The government has targeted to earn Tk 11,000 crore by selling spectrum at the upcoming 4G technology auction that will allow mobile phone operators to offer high-speed data service.

Industry experts, however, cautioned that the government should not be too much focused on making a huge amount of money from the auction because high prices might leave the spectrum unsold like it happened in case of 3G.

Top three mobile phone operators – Grameenphone, Robi and Banglalink — yesterday also wrote to the government, expressing concerns about “higher” floor prices.

Last week Prime Minister Sheikh Hasina, who also heads the telecom ministry, approved the 4G guideline.

According to the guideline, the Bangladesh Telecommunication Regulatory Commission (BTRC) will put 36.4 megahertz of spectrum in three bands up for auction.

Some 25 MHz in 2100 band, 18 MHz in 1800 band and 3.4 MHz in 900 band spectrums will be available at the auction.

The government has set a floor price of $27 million per MHz in 2100 band and $30 million per MHz in both 1800 and 900 bands.

If the spectrums are sold at the floor price, the government will earn Tk 11,000 crore.

The government will also have the scope to earn $7.5 million as each MHz spectrum’s technological neutrality charge in 1800 and 900 bands that mobile operators are currently using.

The Posts and Telecommunication Division will hold a media briefing in the ministry today to announce the government’s plan on 4G rollout and auction.

Abu Saeed Khan, senior fellow of LIRNEasia, a Colombo-based ICT think tank, said because of higher prices, operators will not buy as much spectrum as they need.

“As the government wants to make quick bucks from the auction to boost domestic revenue mobilisation, public interest will not be protected,” he said.  He said, during the 3G spectrum auction in 2013 the regulator earned about Tk 4,000 crore.

But a huge amount of spectrum also remained unsold at the time and the government has not been able to monetise it, he said.

“3G is a big joke. Apart from the urban areas, 3G hardly exists in other parts of the country. The same will happen in case of 4G and 4G will remain in the pockets of only a few privileged customers.”

The government will also earn money in value-added tax from spectrum sales, licence fees, annual fees and spectrum utilisation fees.

But Khan criticised the government policy of charging $7.5 million for each MHz as spectrum conversion fee.

“Already the operators have paid Tk 150 crore for each MHz of the spectrum they are using. Now the operators want to provide a new service with the spectrum. If the government charges them again for the spectrum it will clearly be hypocrisy.”

The winning bidders will have to pay 60 percent of the auction fee within 30 days and the rest 40 percent in four instalments in four years.

In July, the Association of Mobile Telecom Operators of Bangladesh said private mobile operators see no substantial return in the first three years of investing Tk 22,600 crore to roll out 4G service.

Grameenphone, Robi and Banglalink got back only Tk 6,000 crore of the Tk 32,000 crore they invested in the first three years of the introduction of the 3G, according to the association.

The regulator plans to arrange the auction within three months as mobile operators are almost ready to launch the 4G service, said BTRC Chairman Shahjahan Mahmood.

The government is exploring new avenues to boost income from domestic sources after its plan to introduce a new VAT law had to be deferred following strong opposition from businesses.

The government had planned to earn Tk 22,579 crore in additional revenue through the implementation of the new VAT law in the current fiscal year.

Source: The Daily Star