Telcos to spend Tk 22,600cr on 4G services

Private mobile operators are seeing no way of getting back within the first three years a “substantial” return of the over Tk 22,600 crore they will need to invest to roll out 4G services in Bangladesh.

And their estimate has not even taken into account the spectrum charge.

They say high spectrum charges and tax and low 4G device penetration and data price rates are to blame.

Top operators Grameenphone, Banglalink and Robi got back only Tk 6,000 crore of the Tk 32,000 crore invested in the first three years of introducing 3G services, says the Association of Mobile Telecom Operators of Bangladesh (AMTOB).

“This is a serious concern for the investors,” said AMTOB Secretary General TIM Nurul Kabir. Recent service guidelines have narrowed down the scope for business, which investors think will discourage further funding, he said.

Terming some of the guidelines “unrealistic”, mobile operators urged the government to review the issue with a holistic approach. “The government should fix a rational price for the spectrum. The operators will not just buy spectrum, they will also need to invest a significant amount of money to take the 4G services to people’s doorsteps,” said Kabir.

The government recently posted two guidelines on 4G services and spectrum auction at the telecom division’s website and the operators sent back their feedback.

The proposed base prices per megahertz were $30 million (900 MHz band), $35 million (1,800 MHz) and $27 million (2,100 MHz).

The operators are hoping for the price per megahertz to stay below $15 million.

In previous requests to halve the price, AMTOB reasoned that revenues were decreasing against rising data consumption.

They called for declaring the existing spectrum bands to be truly technology neutral, giving them the choice to use their spectrum as they see fit.

The guidelines say the operators should bring in foreign investment and none can be attained from local banks.

Top operators question the need for foreign loans, saying Bangladeshi banks now have enough money to lend at low interest rates.

They also reason that investment gathered from local banks would help keep the money within Bangladesh.

Another instruction is that the speed must be 100 megabits per second.

Quality service has to be ensured while the operators have to store all relevant data at their own expense until Bangladesh Telecommunication Regulatory Commission gives permission to delete those.

Industry insiders say providing such speeds requires a lot more investment. Moreover, a massive optical fibre network would be needed, which only a handful of entities are allowed to lay, further pushing up the operators’ costs.

In the letter, the operators said they also had to keep in mind contingent liabilities such as SIM replacement tax and VAT.

Source: The Daily Star


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