BTRC expects Tk5,355 crore from 8 Mar spectrum auction

Highlights:

• BTRC aims to raise a minimum of Tk5,355 crore from the auction
• 22.4MHz of spectrum from two bands will be auctioned
• Price of the last auction held in 2018 will be the floor price of the new auction 
• Government earned Tk3,940 crore by selling 16.6MHz of spectrum in last auction in 2018
• Four mobile phone operators using 129.2MHz of spectrum to serve 17 crore subscribers

Bangladesh Telecommunication Regulatory Commission (BTRC) has finally decided to hold an auction of radio frequency allocations to the mobile operators, aiming to raise a minimum of Tk5,355 crore.

The auction will be held on 8 March.

Earlier, the BTRC decided to allocate spectrum without holding a new auction. It changed its decision as more than two operators applied for spectrum allocation.

22.4MHz of spectrum from two bands will be put up for auction and the price of the last auction held in 2018 will be the floor price of this auction, read a BTRC notice. 

The commission is arranging the auction, claiming that the existing spectrum assigned to the mobile operators is insufficient to cover the enormous traffic.

It is good news for subscribers as telecommunication services in the country would improve a bit if the mobile phone operators purchase additional spectrum.

Confirming the matter, BTRC Chairman Shyam Sunder Sikder told The Business Standard the auction would be held to award spectrum from 1800MHz and 2100MHz bands to the mobile phone operators.

Spectrum auction is seen as a major revenue source for the governments worldwide while telecom operators jostle for a higher frequency of airwaves to improve services and stay competitive in the race for 3G, 4G, and 5G networks.

Even heavily indebted companies are raising money to participate in the auction as they view it as an essential investment to avoid the risk of being thrown out of business.

Faster economic recovery from Covid-19 depends on resilient digital infrastructure and higher frequency is a key element, they believe.

The 5G spectrum auction in the US yielded $81 billion last month, up from $45 billion six years ago. The amount was $277 million for the Swedish Post and Telecom Authority.

India's spectrum auction planned for March is expected to fetch 3.92 lakh crore rupees, which the industry sees as too high. Analysts forecast the sales proceed would be around 30,000 crore rupees.

In the UK, telecom operators are disappointed as the British authorities are delaying the auction scheduled for March.

In the last auction held in 2018, the Bangladesh government earned around Tk3,940 crore by selling 16.6MHz of spectrum to Banglalink and Grameenphone. This time, the BTRC expects to raise more than Tk5,355 crore.

Mobile phone operators say the spectrum rate is too high for them to afford. Therefore, a deadlock has been prevailing over spectrum allocation for years, leading to a deterioration of mobile phone services.

Commenting on the regulatory commission's move, Shahed Alam, chief corporate and regulatory officer at Robi Axiata, said, "We welcome the BTRC's initiative to allocate spectrum for mobile network operators. We hope they would consider spectrum pricing and allocation as tools to correct the unbalanced market competition that exists at the moment."

No comment was available from Grameenphone and Banglalink.

Posts and Telecommunication Minster Mustafa Jabbar said, "We have set the price considering market demand and our resource limitations. There is no way to lessen the price at all."

Talking about the balance in allocating spectrum, he said, "We have divided the spectrum into different blocks to avoid partial allocation to a single company."

Meanwhile, telecom services have been deteriorating in the country as the operators are not using adequate spectrum to cover their customer base.

Currently, user occupancy against per MHz spectrum in Bangladesh is more than 13 lakh, which is only two to three lakh in Nepal and Myanmar.

Operator-wise, the scenario is worse. According to the BTRC, Grameenphone, the country's largest mobile phone operator, has the lowest spectrum coverage for its users. Over 20 lakh Grameenphone subscribers are currently occupying each MHz of spectrum.

The second largest operator, Robi, serves 14 lakh subscribers with the same frequency while Banglalink has 11 lakh users in each MHz of spectrum.

At present, Grameenphone has 37MHz of spectrum, Robi 36.4MHz, Banglalink 30.6MHz, and Teletalk 25.2MHz in three different bands.