The much-hyped 3G spectrum auction – so far the country’s largest in terms of volume of money – concluded on Sunday with just four calls, selling a total of 25MHz on the 2,100 band.
In the bidding that lasted less than five minutes, mobile phone market leader Grameenphone bought 10MHz while Robi, Airtel and Banglalink bought 5MHz each.
A big chunk of 15MHz spectrum remained unsold.
The Bangladesh Telecommunication Regulatory Commission (BTRC) on Sunday evening sent a letter to the telecommunication ministry, informing it of the auction and its outcome and requesting it to approve issuance of the 3G licences soon.
“It was surprising that four operators took only 25MHz. I was also doubtful from the beginning about the rise of the price in the bidding,” said Abdullah Ferdous, consultant of the BTRC who conducted the auction.
BTRC Chairman Sunil Kanti Bose, however, said: “There was no scope of an intense competition here as only four licences were given and there were four applicants.
“I had doubt about how much spectrum would be sold; I thought in worst case scenario, only 25MHz spectrum would be sold. But there was huge scope to sell 30MHz-35MHz spectrum.”
The telecom watchdog has no idea what it will do with the unsold spectrum. “The government will decide on the rest of the spectrum on the basis of demand,” the BTRC chairman said in reply to a question.
The auction was held at Ruposhi Bangla Hotel in the capital.
The four mobile phone operators expressed satisfaction at the auction outcome and claimed there was no syndication about the auction.
BTRC officials were, however, very frustrated as bidding had not gone up at all and spectrum did not sell much.
The first phase of the auction for 10MHz blocks started at 11:15am and Grameenphone bid for $21m for each megahertz within 439 milliseconds. The operator won the bidding as there was no other player for this block.
In the second phase, Robi bid for 5MHz block within 410 millisecondsand Airtel bid after 44.792 seconds. Just before the end of the 5-minute period for bidding, Banglalink joined the race upon being informed by the BTRC chairman that it would not be eligible for buying spectrum if it did not attend.
The BTRC found no bidder in the second clock-round for $22m, so Robi, Airtel and Banglalink got 5MHz each.
No competitor responded to the auctioneer’s cry in the third phase.
Grameenphone got the chance to choose 10MHz spectrum in 2,125-2,135 band for downlink and 1,925-1,935 for uplink.
Depending on their responding time, Robi was given the opportunity to choose spectrum band, and it took 2,140-2,145 for downlink and 1,950-1,955 for uplink. Airtel took 2,135-2,140 for downlink and 1,945-1,950 for uplink while Banglalink got the rest of the block 2,145-2,150 and 1,955-1,960.
From the auction the government will get $525m (Tk40.82bn)as spectrum price and additional 5% VAT. The operators will have to deposit Tk100m each as licence fee. Theycan deposit it in local currency on Bangladesh Bank’s exchange rate on Sunday, which was Tk77.75 for $1.
The state-owned mobile operator Teletalk will get the 3G licence by default on 2,150-2,160MHzband and it will have to pay $21m,the price fixed by the auction.
The country’s oldest operator Citycell had applied for 3G licence but itdid not finally deposit $20mof the earnest money.
According to the guideline, the operators have to pay 60% of the total amount in the first instalment within 30 days of the auction – before8 October – andthe remaining 40% by the next 180 days.
After paying the fees they will get no-objection certificates to import equipment for operating 3G services.
Grameenphone CEO Vivek Sood said: “We are happy to get the spectrum to launch 3G. We will bring the 3G services to our valued customers at fastest possible time, ensuring the high quality for which GP is known for.”
Robi CEO Michael Kuehner told the Dhaka Tribune thattheir 3G service launching would depend on the issuance and handover of the actual licence as well as receipt of the NOCs from the relevant authorities for import of equipment and its subsequent deployment.
Ziad Shatara, CEO of Banglalink, said: “We are now ready to move on to the rollout phase, and ensure availability of this technology to our valued customers. Banglalink has always been at the forefront of technology in this market, and with 3G, we reiterate our commitment to deliver to our customers the next generation of technologies and value propositions.”
“We are very hopeful to fulfil the government’s desire by rolling out the 3G network within the time[fixed in the guideline] and we are committed to deploying world class 3G network in the country,” Chris Tobit, CEO of Airtel, told the Dhaka Tribune soon after the auction.
In a statementon Sunday evening,he claimed that the spectrum auction was “fair and transparent.”
However, a high official from an operator said: “Everything was managed before sitting in the auction. So, everything happened according to the script.”
A number of high officials of the operators said there were some weaknesses in the auction framing because of whichthe government did not earn much.
“The 3G is a 10-year old technology, so why would an operator invest money in a dead service?” another official told the Dhaka Tribune. He said everybody knew that the regulatory frame was not clear and the investors had found lots of uncertain aspectsin thepast couple of years.
But BTRC Chairman Sunil Kanti Bose said: “I can confirm there was no regulatory problem here. The operators concentratemore on voice here, not on data.Maybe this was one of the reasons for showing less interest in 3G.”
According to the guideline, the operators mustdeploy 3G servicesin seven divisional headquarters within nine months,in at least 30% of the districts within the next nine months, and they will have to cover the whole country within three years.
Telecommunication Minister Shahara Khatun, Chairman of parliamentary standing committee on the ministry Md Abdus Sattar, Secretary Md Abubakar Siddique, BTRC Chairman Sunil Kanti Bose, Vice-Chairman Md Giashuddin Ahmed, and commissioners ATM Monirul Alam and Md Abdus Samad were present at the auction.
