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Teletalk not ready to pay 3G spectrum fees

  • Published at 08:54 pm September 5th, 2013
Teletalk not ready to pay 3G spectrum fees

Teletalk, the only state-owned mobile phone operator in the country, will have to pay at least Tk18.83bn to Bangladesh Telecommunications Regulatory Commission as the fee for 3G spectrum plus VAT.

The 3G spectrum auction is scheduled on Sunday. Even though Teletalk, which has been running 3G services since April 2012, is not required to participate in the auction, it has to match the hammer price and pay BTRC for the spectrum and the licence, according to existing 3G licencing regulations.

Teletalk has been using 10 MHz spectrum from April 2012. The starting price for the auction is $21m per MHz plus a 15% VAT. Therefore, given the starting price, Teletalk will be required to pay at least $241.5m, equivalent to TK18.83bn. Another Tk100m will be charged for the licence. Of this payment, 60% or $144.9m, equivalent to TK11.3bn, has to be paid before November 7.

However, the bidders at the 3G auction are required to add $1m per MHz in every call, so the actual figures will be much higher.

Teletalk’s total revenue in the 2011-12 fiscal was Tk3.57bn. Teletalk Managing Director Md Muzibor Rahaman admitted that the company would not be able to come up with the kind of money needed for spectrum and licence in such a short period of time.

“If the government wants us to give the licence fees and spectrum charges, we would have to go to different banks, or we could also collect money from IPO. But for that we need some time,” he told the Dhaka Tribune.

The company was making profit so loans would not be a problem to get, said the Teletalk chief. He added that Teletalk had some plans to make its 3G services successful.

The success of the country’s first 3G services so far, however, belies the directors’ confidence.

Teletalk’s 3G service began on October 14 last year with $211m foreign suppliers’ credit from China and local funds of Tk4.24m, and has managed to barely cover Dhaka, Narayanganj, Gazipur, Chittagong and Sylhet so far. It intends to reach Cox’s Bazar soon.

Sources in the company said there was no plan yet for bringing the rest of the 58 districts under 3G coverage, as there is no fund to do so.

When asked about the issue, Telecommunications Secretary Md Abubakar Siddique, who is also the chairman of Teletalk board ex-officio, would not give any concrete answer.

“As a government owned company, Teletalk has some dependence on the government. At the same time, it may enjoy some extra facilities compared to private operators,” he said, however.

A source in Teletalk said the issue of payment had not yet been raised at the company’s board meeting.

BTRC Chairman Sunil Kanti Bose told the Dhaka Tribune that although Teletalk was a state-owned company, according to the guidelines, it would have to pay all the fees like other operators. “But if the government takes any decision, we have to follow it.”

Before launching 3G services Teletalk was allocated a spectrum on a six-month basis. This approval has already been extended three times. The 3G licence from BTRC will remain valid for 15 years.  

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