• Tuesday, Jan 28, 2020
  • Last Update : 09:32 am

Airtel enjoys spectrum worth billions for free

  • Published at 02:45 am June 2nd, 2013

Bangladesh Telecommunication Regulatory Commission (BTRC) in 2005, had allocated spectrum worth billions, completely free of cost to the sixth mobile operator in the country, Warid Telecom, a venture of the Dhabi group, which India’s Airtel bought controlling stock of in 2010.

However, the regulator, only two years later, had charged its competitors – Grameenphone, Banglalink and Robi – Tk800m per Mhz of spectrum on the same frequency range. Grameenphone bought 7.4 MHz with the price of Tk5.92bn, Banglalink took another 2.6 MHz in Tk2.08bn and Robi also bought 2 MHz in Tk1.60bn during the caretaker regime.

The “discrimination” was discovered in an audit of the regulator’s operation in between 2001 and the 2009-10 fiscal year by the office of the Comptroller and Auditor General (CAG). It also estimated the government lost around Tk12bn due to the free allocation basing their calculations on the 2007 rates.

The CAG’s office asked the telecom-watchdog to give a clear and detailed explanation regarding the free allocation and if unable, to collect the lost amount from the operator and inform the audit authority.

According to the report, BTRC gave GSM license for cellular mobile services to Warid Telecom for 15 years on December 20, 2005. It paid $50m (Tk3.31bn) only as license acquisition fee, but were also given the 15-MHz spectrums on 1800 band free of charge.

BTRC officials argued that license was already high thus the spectrum need not to be priced.

However, a highly-placed official of the regulator, on condition of anonymity, told the Dhaka Tribune: “Spectrums were never free. Even in 1997 a minimum fee was charged. We have to take into account that in 1997 our telecom industry was nothing, by 2005 it had matured a lot.”

A former commissioner pointed out that BTRC took license renewal fees and charged an extra Tk1.5bn per MHz for spectrums from four mobile operators – Grameenphone, Robi, Banglalink and Citycell – in 2011. “If that is justified, then how can Airtel be in operation by paying only the license fee?” he said.

However, the telecom regulator chief, Sunil Kanti Bose, claimed it was all a “misunderstanding” with the auditors.

“We gave our reply to the CAG and there is nothing in the regulations about it (spectrum allocation process),” Sunil told the Dhaka Tribune in a recent interview.

The government had in the past handed out spectrum on the 800, 900 and 1800MHz bandwidth for free. “It does not mean that the government made losses then,” Sunil said.

Airtel declined to officially comment on the matter despite repeated attempts. However, a senior official, requesting anonymity, told the Dhaka Tribune in a meet at his office last week: “We are the first operator who paid for a license and at a high rate. So the government should show us that respect. Instead we are getting harassed by various sectors including the media.”

The official added that their license does not include any provision that says they have to buy the spectrum separately.

The CAG report also pointed out that the operator had made a change in the frequency range of its bandwidth in July 2010, when it switched the frequency of a 5-MHz band from the 1800MHz frequency to 900MHz range free of cost.

Indian telecom giant Bharti Airtel had bought 70% stake from Dhabi Group (Warid Telecom) on January 2010 just before the change. The operator was rebranded in December 2010.

A highly-placed official of a competing operator said 900MHz has higher range compared to 1800MHz. The equipment for the frequency is also less costly. “Operators can save 30% to 40% money by using this spectrum.”

BTRC also attribute that 800 and 900 band is much effective than 1800 band on the drafted 2G license renewal guideline.

Before finalising the guideline with the finance ministry, the regulator priced allocations on the 1800MHz range at Tk1.5bn per MHz and doubled that rate for 800/900MHz frequencies.

“It was a change of spectrum only, as far I know. BTRC allocated Airtel 5-MHz band in the E-GSM band and took back the same from the 1800MHz – band,” the regulator’s chief, Sunil Kanti Bose, said.

Sources said, if BTRC cannot solve the problem then it will go to the parliamentary standing committee on public accounts and the panel would decide on it.