Three leading private mobile operators – Grameenphone, Banglalink and Robi – expressed their concern over the indifferent attitude of the Bangladesh Telecommunication Regulatory Commission (BTRC) towards their demands.
The mobile telecom operators threatened not to participate in the 3G (third generation of mobile telecommunication technology) auction until and unless the BTRC settled several major issues like outstanding taxation and investment protection.
Jon Fredrik Baksaas, president and chief executive officer of the Telenor (major shareholder of the Grameenphone), Jo Lunder, group chief executive officer of the VimpelCom and Robi Axiata President and Chief Executive Officer Jamaludin Ibrahim in a letter on July 29 asked BTRC Chairman Sunil Kanti Bose to resolve the issues.
The letter also requested the BTRC chairman to delay the process by one month so they could resolve their problems within time.
The BTRC's unilateral rights to change terms and condition in the spectrum 3G license undermines confidence in Bangladesh as an investment destination, the three international investors' letter reads.
Earlier, a similar letter was also sent to the ministries concerned including Posts and Telecommunications Minister Shahara Khatun on January 17 and Finance Minister MA Muhith on May 16.
The letter requested the issues be settled before the auction was held as it involved a huge amount of money in the process,†Mahmudur Rahman, executive vice-president of the Robi, said.
After receiving the letter the BTRC chairman met the finance minister on Tuesday and decided to reschedule the auction deadline.
On Wednesday the BTRC extended the deadline by 10 days for mobile operators to apply for the spectrum auction for the 3G mobile network.
The new last date for filing an application is now August 12 instead of August 1 and the last date for paying the earnest fee, $20m per operator, has been shifted to August 25 from August 18.
The auction date too was deferred until September 8 from September 2.
The letter said: "We hope the government would maintain the general investment protection provision under the Foreign Investment Protection Act-1980."
It proposed the BTRC and Ministry of Post and Telecommunication should include a provision reflecting the investment protection act in the 3G spectrum licenses.
A last minute price increase in 2G renewal costs is a major barrier to 3G auction participation, 2G licensing value added tax payments currently subject to dispute in court should be set against operators value added tax (other taxes/fees) due over a five year period commencing from 2014, the letter continued.
"We propose one fifth of the amounts disputed by operators should be set against value added tax (or other taxes/fees) each year from 2014."
The private mobile operators objected to the tax imposed on SIM replacement by the National Board of Revenue (NBR) terming it double taxation.
"We (three operators) propose that issues including tax compliance be approached through the formation of a joint audit committee or task force including the NBR, BTRC and industry association representatives," observed the letter.
The three operators want the government to follow the model of 1996 in awarding 3G spectrum licenses.
In 1996 licenses were issued on the basis of contract between two parties – licensor and licensee.
But this time the NBR was involved in the process.
According to the 3G guideline, the telecom regulator will award to the highest bidders from among the five existing operators and a new one.
The state-run Teletalk has already got the 3G license by default. The tenure of the 3G license will be 15 years.
The regulator will offer a 5-Megahertz (MHz) slot in the 2100 band; the floor price of per MHz spectrum has been fixed at $20m.
The guideline also suggests 60% of the total price of spectrum assignment has to be paid in the first instalment within 60 days of the auction and the remaining 40% within another 180 days.
