Renewal of 2G licenses won’t harm industry

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Wednesday, 09 February 2011

Author / Source : STAFF REPORTER

Dhaka, Feb 8: The process of renewing 2G licenses would either take place through negotiations or auction, so that the industry does not suffer any shock, said Hasanul Haq Inu, chairman, parliamentary standing committee on Ministry of Post and Telecommunications (MoPT), in a round-table discussion on Tuesday. Inu was the chief guest at the programme. He said that renewal guidelines have not yet been finalised, though the BTRC has submitted a draft to the ministry. He added that operators are protected by law. Inu said that the telecom sector is the biggest stakeholder in implementing the Digital Bangladesh vision.
The round-table discussion, entitled “Implementing the vision of Digital Bangladesh: Role of Telecom and ICT Sector”, was organised by Bangladesh Enterprise Institute (BEI), at the Pan Pacific Sonargaon Dhaka Hotel. Policy-makers, bureaucrats, regulators, business owners, journalists, operators and market analysts attended the discussion and offered their views on enabling the Digital Bangladesh vision, through the telecommunications sector. The focus of the discussion was supposed to be on the role of telecom and ICT sectors, but it turned onto the difficulties faced by operators in the 2G licence renewal process. While fielding questions from reporters, after the round-table, Inu said, “We're trying to settle the 2G licence fees in a justified and tolerable manner, comparing to previous benchmarks, such as license fees paid by Warid in 2005, 2008’s WI-max auction charges and 2008’s spectrum charges by the BTRC.”
The stakeholders said that, so far, mobile operators have contributed Tk. 2,500 crore to the exchequer and the payments will continue. But if Tk. 14,000 crore is to be paid as spectrum charge, by the four operators, then it would be difficult for them to do business. Mobile operators are the biggest taxpayers of the country, as they pay 50 per cent of their revenues to the government.
Telecom players likened the sector to the golden goose, which, they said, should not be destroyed to fulfil short-term gains.
Business leaders of the country said that, except Grameenphone, all other operators are facing losses. So, if a huge charge is imposed, at a time, operators would not able to put forward the money. Even local banks would not able to finance such a large sum. The big four telcos – Grameenphone, Banglalink, Robi and CityCell – will have to pay the spectrum renewal charges to the government within November this year. According to the operators, they do not have sufficient funds to pay for the licenses.
Moreover, they want to remove non-telecom issues from the renewal guidelines such as employment directives, social obligation funds, corporate social responsibility, liability on gray traffic, separation of access and transmission, mobile number portability, IPO, 3G spectrum auction, and spectrum rearrangement.
The discussion begun with opening remarks by BEI president Farooq Sobhan, who moderated the programme. He said mobile phones can now be used to carry out a large number of activities, such as, mobile banking, overseas money remittance, among others. The operators should be congratulated for what they have done, he added.
"We need to create conducive atmosphere and investment climate for investors, so that we can ensure a gross domestic product (GDP) of 8-9 per cent in the near future," said Farooq Sobhan.
The speakers said that to fulfil that government’s vision for “Digital Bangladesh”, policymakers, as well as, the regulator and the operators have to develop a win-win situation. To make information technology (IT) and information communication technology (ICT) more effective, policy transparency and best practices from around the world, need to be incorporated.
The speakers said that telecommunications and ICT can be useful tools for building Digital Bangladesh. They mentioned that the telecom sector in Bangladesh has seen growth in mobile penetration that has exceeded all expectations, with over 65.1 million subscribers, as of September 2010, against a mere four million in 2004.
With supportive regulatory environment, crossing 100 million subscribers, by 2013, is achievable, they said. Further, they said, rapid growth in the mobile telecom sector has undoubtedly had a transformational impact on the economy, in terms of aggregate investment, FDI and increased productivity levels. There have been substantial benefits from greater connectivity, in terms of social cohesion and poverty alleviation.
Sunil Kanti Bose, the MoPT secretary and special guest at the programme, said that the 2G licence renewal guideline has shaken people who we have talked to. The issue should settled keeping in mind global practices, as well as, practical goals, he said.
As the guideline has not been finalised yet, the secretary advised operators not to panic. Admitting the lack of clarity in government’s works, he said there are some difficulties in the guideline, which should be discussed.
“We'll analysis the guideline and consider it. Under no circumstance, the government would support a policy that goes against everyone's interest,” he said. Maj-Gen (retd) Zia Ahmed answered to the golden goose allegory, telling operators, “Your golden goose is with you, while ours is with us. We have to consider our commitments to the people.”
He added, “Our effort is to create investment and level playing fields.  We are preparing to audit the operators’ accounts, according to the Telecommunications Act.”
Sanjay Kathuria, lead country economist of the World Bank, said the Bank is ready to help the government to develop the sector. In the current situation, the Bank recommend an open auction, he said. Kathuria added that a 50 per cent levy is too high for the industry and there are some non-licensing issues which should be left for other ministries of authority.
Key-note speakers included Aslam Hayat, representative of Association of Mobile Telecom Operators (AMTOB), Tenzin Dolma Norbhu, senior ICT policy specialist of the World Bank, and Ifty Islam, MD, Asian Tiger Capital Partners.