The government has decided to award a WiMax licence with LTE and wrongly calculated spectrum to the controversial Ollo brand without any auction, which industry insiders say will cause a loss of at least Tk32bn public money.
Telecommunication Minister Shahara Khatun approved the licence on Monday evening. The approval is likely to be sent to the Bangladesh Telecommunication Regulatory Commission (BTRC) by today, a ministry official confirmed the Dhaka Tribune.
The LTE (long-term evolution, a fourth generation telephone and mobile broadband communication standard) will enable Ollo to handle both voice and data services, making it the most influential operator in the country although it is spending much less than other operators.
Ollo, a brand of Bangladesh Internet Exchange Limited (BIEL), will have to pay only Tk2.46bn for the licence and will not have to pay any extra fees for the highly expensive 20MHz spectrum in 2600 band, the current value of which is more than Tk34.29bn according to the price fixed at the last auction on 2100 bands held for 3G mobile services on September 8.
Legal and telecom experts termed Ollo’s getting the licence the biggest spectrum scam in the country adding the government would have to face legal fight challenging the decision.
Telecom Minister Shahara Khatun declined to make any comment on the matter.
She, however, told the Dhaka Tribune: “Journalists need not know what we are going to do. The government will decide what is best for the people.”
The Association of Mobile Telecom Operators of Bangladesh (Amtob) disagrees with the licence awarding process and has requested the government to assign spectrum through “proper valuation.”
The information and communication technology professionals claimed that 2,100 and 2,600 bands technically held the same power, both being a natural extension of the 3G spectrum and widely auctioned for 4G LTE.
At the 3G auction the BTRC sold 1MHz spectrum for $21m with 5% VAT; considering the dollar’s exchange rate on September 8, the price of 20MHz spectrum crossed Tk34.29bn.
In 2008, the BTRC held an auction for WiMax licences and the price for each licence was fixed at Tk2.15bn with 35MHz spectrum.
Industry insiders said by these five years the telecom industry became more mature and spectrum became much more expensive.
The BIEL participated in the 2008 auction vying for three WiMax licences and placed sixth. Mobile operator Banglalion, which ranked top with a bidding of Tk2.15bn, and Augere Bangladesh, which placed third, got two licences. Brac also won in the bidding but later withdrew from the race.
The BTRC then offered the companies securing fourth, fifth and sixth positions to take the licences for Tk2.15bn each, but they all refused. The BIEL even withdrew its earnest money deposited for the auction.
Abu Saeed Khan, a senior policy fellow of the Colombo-based regulatory thinktank LIRNEasia and a former secretary of Amtob, has termed the 2008 auction “dead.”
“Once an auction is closed, it gets closed forever and under no circumstances any licence can be issued referring to that auction,” he told the Dhaka Tribune. “It is completely illegal.”
Legal professionals said the same thing had happened in India in 2008 when the Indian telecommunication ministry had caused the exchequer losses of nearly $40bn by selling licences at a seven-year-old price.
Barrister Tanjib-ul Alam said: “The BIEL is not eligible for the licence unless a new auction is held.”
Amtob sent a letter to the telecom secretary and the BTRC chairman on Sunday, saying: “Globally, the spectrum values for 2600MHz and 700MHz have been very encouraging for governments. If these bands are allocated without proper valuation and auction, it would result in significant value loss for the government which otherwise would have been possible [to prevent] through setting up a realistic base price and allowing mobile operators to participate.”
The letter signed by Chairman Michael Kuehner and Secretary General TIM Nurul Kabir said the government decision might disrupt the level-playing field in the industry.
An official of the BTRC said the regulator had sent a letter signed by its Senior Assistant Director Shazeda Parvin to the BIEL on September 15, informing it about the licence awarding.
Ollo, a joint venture of the BIEL and the New Generation Graphics Limited (NGGL) – both now owned by the Russian company Multinet, had applied for the WiMax licence in April this year. The NGGL had already got 20MHz spectrum free of cost on 800 band in 2011.