Bangladesh's telecom regulator should rethink its expectations of revenue generation otherwise the proposed licence and spectrum fees and sector and non-sector taxes could drive mobile operators out of the market, said London-based GSM Association.
According to the draft licence renewal guidelines of Bangladesh Telecommunication Regulatory Commission (BTRC), Grameenphone, the market leader, would have to pay Tk 5,504 crore, Banglalink Tk 2,994 crore, Robi Tk 3,000 crore and Citycell Tk 620 crore for 2G licence renewal, which will expire in November this year.
The four operators -- who together control over 93 percent of the country's 7-crore subscribers base -- said the draft guidelines fail to look beyond revenue generation to economic efficiency.
In a comment on the draft regulatory and licensing guidelines, GSM Association (GSMA) said Bangladesh's mobile operators could end up paying over Tk 12,118 crore for GSM and CDMA licences, plus non-sector-specific taxes and duties.
"The proposed model for spectrum fees and charges punishes mobile operators for extensive use of their assigned spectrum. This level of tax may bring unintended consequences and may not be sustainable for mobile operators and their investors."
Headquartered in London, the GSMA represents the interests of the worldwide mobile communications industry. Spanning 219 countries, it unites nearly 800 of the world's mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, internet companies, and media and entertainment organisations.
The association said the BTRC should switch from a short-term perspective of revenue maximisation to a medium-long term perspective of making sure the mobile bands are used' as efficiently as possible.
The observations came as the four operators anxiously wait for the government's next move on the issue.
Telecommunication Minister Rajiuddin Ahmed Raju, on several occasions, said there would be a discussion with all stakeholders including operators before finalising the guidelines. But no such move has been taken yet.
The GSM association urged the government to limit licence fees to recovery of the administrative costs of the licensing process and associated regulatory costs, including spectrum management. Where there is excess demand for spectrum, there should be an auction or assignment in line with the marginal forward-looking opportunity cost of the spectrum, it said.
It said the "utilisation factor" seriously risks forcing operators to cut back on their use of spectrum, deploy fewer base stations, and consider handing some of their spectrum back to the regulator to cut fees and charges. Marginal customers and Bangladesh's mobile penetration will suffer.
Mobile operators say the BTRC licence renewal proposals pose a direct threat to the success story of telecom sector. If implemented in their current form, they would do grave damage to both the mobile phone and financial sectors, and send wrong signals to potential investors into other sectors in Bangladesh, they say.
Among other problems, operators say, the proposed fees are too high, are not rational or proportional and significantly exceed the true market value of the spectrum. Moreover, Bangladesh's financial markets, both stock and bond markets, are not strong enough to finance them.
The operators say the draft renewal guidelines -- which also drew flak from World Bank -- consist of legal and financial uncertainties, non-licence elements and non-telecom issues, and lack stability, transparency and best practices.
Analysts say if mobile operators are forced to pay such high fees for 2G licence renewal then the government's own Digital Bangladesh vision will be in jeopardy, as it will leave the telcos with little to introduce 3G technology in the country.
Chris Doyle, a telecom expert, said the BTRC's approach appears consistent with that of many administrators who focus on technical parameters and revenue generation.
Doyle, an associate of Warwick Business School and Department of Economics, Warwick University, said he found little information in the draft regulations to indicate that spectrum charges are set to reflect relative scarcity, although operators with more spectrum will clearly pay more.
"Moreover, it is far from clear what might happen to the spectrum fees obtained. There is also no impact assessment that considers alternative scenarios, such as whether the country would be better off setting lower or higher spectrum charges," he told PolicyTracker, a telecom publication.
Doyle said given that mobile telephony is the only form of telecoms access for most of the population, lower annual spectrum charges would help deliver services at lower prices and directly benefit consumers.
He said the government must choose the best estimate. "If it opts for licence renewal fees at the top end, it may end up setting the wrong price for the spectrum, jeopardising investment and harming digital productivity and the public interest."
Telecom companies have invested Tk 30,000 crore between 1997 and 2009, and now contribute 10 percent to the national budget.
Six mobile operators cover more than 90 percent of the territory and 99 percent of population in the country -- a scenario the policymakers could not think of over a decade ago when Bangladesh prepared its first telecom policy.
Last year, the sector made up over 60 percent of the total foreign direct investments flown into Bangladesh.
News Source:
The Daily Star