Mobile operators Grameenphone (GP) and Banglalink have raised their objection to Airtel's spectrum renewal at a lower price.
They demanded that the spectrum be sold at a price set during the last auction in February 2018.
The validity of Airtel’s spectrum is going to end on December 19 later this year.
According to the Bangladesh Telecommunication Regulatory Commission (BTRC), Airtel Bangladesh Ltd, which merged with Robi in 2016, had a spectrum validity of 15 years.
Airtel holds 11.6 MHz spectrum from the E-GSM-900 MHz and GSM 1800 MHz band.
According to sources, in 2005, Warid Telecom (later Airtel) spent Tk340 crore to buy 1800 MHz, meaning 15 MHz in the 2G band.
The cost of this spectrum was allocated for 15 years, approximately Tk1.51 crore per MHz spectrum.
In 2011, when Robi Axiata renewed its 2G spectrum license, it spent Tk10 crore per MHz. Thus, Robi had to pay more than Tk8.49 crore extra for each megahertz of 2G spectrum.
Since Robi bought the same spectrum in 2011 for Tk10 crore, it is now proposing to buy Airtel’s spectrum from the government for Tk10 crore, if Robi wants to consolidate their 2G spectrum with Airtel.
This acquisition would now cost them Tk573 crore for 15 megahertz spectrum.
BTRC officials said that as they allotted the Airtel spectrum at a very low price back in 2005, additional fees were added to maintain balance when it merged with Robi.
Now the same principle should be applied again if they want to acquire more spectrum, they added.
In this case, Robi would have to spend around Tk3,043crore to retain the 11.6 megahertz (MHz) spectrum in its network system, as per the BTRC's latest spectrum auction rate as of February 2018.
Robi applied for the spectrum renewal on August 3.
If it does not renew in time, a large number of its customers might suffer from poor service, such as call drops and slower mobile internet.
“We have applied for our spectrum renewal. If the application is declined, Robi will still have its 2G license, since these two issues are completely unrelated. The company will still be able to provide 2G services to customers using the remaining spectrum and countrywide infrastructure,” Shahed Alam, chief corporate and regulatory officer, Robi Axiata Ltd, told Dhaka Tribune.
Meanwhile, Banglalink and Grameenphone separately sent letters to BTRC on this issue where they demanded that Robi-Airtel be allotted spectrum as per the 2018 auction price.
Robi-Airtel's proposal was not reasonable as the spectrum was only sought for Airtel, which should not be considered as both the companies are now merged and could share each other's resources, in this case, Airtel could enjoy Robi's spectrum tenure, they said.
Banglalink, in its letter, mentioned that Airtel wanted to purchase spectrum at rates, which were long before the latest auction.
“The minimum price should be the last auction price. If spectrum is distributed at a lower cost, the (other) operators who purchased spectrum at that time should be compensated to ensure a level playing field,” said Taimur Rahman, chief corporate & regulatory affairs officer of Banglalink.
“If the regulator now sells the spectrum at a lower price, Banglalink will seek a refund for part of the money it spent on the previous auction,” he added.
Grameenphone mentioned in its letter sent to BTRC that the approach to Robi-Airtel's spectrum renewal must guarantee transparency and provide equal treatment and opportunity to all operators.
"We believe there is no basis for considering Robi-Airtel’s spectrum differently than spectrum of other market players and there should not be any preferential treatment," the letter also stated.
While asking about this matter, BTRC senior assistant director Zakir Hossain Khan told Dhaka Tribune that there was no issue about not renewing Robi’s Airtel spectrum.
"But as we received different letters from two mobile operators, the commission will review all the issues and will decide what to do next," he added.
Airtel bought Warid Telecom in 2010 and started business in Bangladesh. Robi got 11.8 MHz spectrum and number starting with '016' from Airtel from 2016.
In the previous auction for 4G technology in 2018, the BTRC fixed $27 million as the floor price per MHz of spectrum in the 2100 band, and $31 million per MHz in the 1,800 and 900 bands.
At that time, Banglalink acquired a total of 10.6MHz spectrum – 5MHz in the 2100 band and 5.6MHz in the 1,800 band – for $308.6 million, while market leader Grameenphone took 5MHz only in the 1,800 bands at $155 million.
However, the other operator Robi Axiata Ltd did not participate in the bid.
Airtel bought Warid Telecom in 2010 and started business in Bangladesh. Later Robi got 11.8 MHz spectrum and number starting with '016' from Airtel from 2016.
At present, the market leader Grameenphone has 37 megahertz (MHz) spectrum, Robi 36.4MHz, Banglalink 30.6MHz, and Teletalk 25.2MHz in three different bands.
