Vietnamese mobile phone operator mobifone has expressed its deep interest in acquiring some stakes of Bangladesh’s Citycell, according to people related with the companies.
A team from mobifone, a brand name of Vietnam Mobile Telecom Services has been in Dhaka for last few days and met with the government high-ups. Phuong, head of international division of the operator, is leading the delegation.
The company people said VMS can acquire whole 44.54% shares of SingTel Asia Pacific Investment Pet Ltd in Citycell and 37.95% of Pacific Motors Limited shares or 17.51% Far East Telecom Limited.
The mobifone team met Telecommunication Minister Abdul Latif Siddiqui, outgoing Telecommunication Secretary Md Abubakar Siddique and Bangladesh Telecommunication Regulatory Commission (BTRC) Chairman Sunil Kanti Bose on Tuesday at their respective offices.
The delegation also visited different Citycell offices in last two days and went to Chittagong yesterday to oversee some of its infrastructures and network.
They also attended an iftar with Vietnam ambassador in Dhaka, two bank officials with Citycell yesterday evening. They are due to fly for Vietnam today.
When asked about the matter, Citycell CEO Mehboob Chowdhury, who is also Chairman of South Asia Mobile Forum, said he had a meeting with VMS officials but the meeting discussed “no bilateral issues.”
However, “they are very interested to invest here in the country for flourishing the broadband and we only discussed about it,” Mehboob Chowdhury told the Dhaka Tribune highlighting the prospects of Bangladesh market and of the region including Nepal.
Morshed Khan, chairman of pacific motors and known as de facto owner of Citycell, said he has no idea about the matter.
According to telecom ministry sources, the government high-ups were in efforts to attract VMS officials into investment in Bangladesh promising all necessary assistance.
Citycell came into operation in 1993 and currently has a subcriber base of 14.33 lakh, lowest among the operators. Its holds 1.23% market share now. But the operator used to enjoy nearly 20 lakh subscribers and 3.23% marker share just four years back in July 2010.
Citycell’s revenue in FY2012-13 was Tk267.63 crore ($344m), declining from Tk347.04 crore ($351m) in FY2011-12, according to BTRC data.
The operator made no investment in FY2012-13 while in FY2011-12 it had a Tk490.39 crore ($637m) investment in the market.
On the other hand, Mobifone, a government-owned operator, has a market share of nearly 34% in Vietnam. It also launched service in 1993 as a GSMA operator making a yearly revenue of around $4bn.
This is not the new. For last few years, Citycell has been searching potential investors. It is also trying to shift their technology from CDMA to GSMA.
In July last year, a Chinese investor signed a Memorandum of Understanding with Citycell to invest on broadband and connectivity. But finally they didn’t reach any decision.
Company sources said not only the mobifone but also another foreign operator Axiata of Malaysia is interested to invest in Citycell. But Axiata has made its investment in Robi.
As Citycell has a scarcity of new flow of money, it has an outstanding amount of Tk228 crore ($296m) with BTRC as 2G licence renewal spetrum fees.
The operator applied for attending the 3G spectrum auction but later failed to deposit $20m as required. So the operator was unable to participate in the 3G spectrum auction.
