Govt refuses to give spectrum to telcos at discounted price

The Bangladesh government has refused to allocate spectrum to mobile phone service providers either at a discounted price or free of charge during the Covid-19 emergency.

Three mobile phone service providers – Robi, Banglalink and state-run Teletalk – last week applied for free spectrum to the Bangladesh Telecommunication Regulatory Commission (BTRC) for three months, while market leader Grameenphone verbally requested a discounted price.

Speaking with The Business Standard on Tuesday, Posts and Telecommunication Minister Mustafa Jabbar said, "During this Covid-19 crisis, we will not allocate spectrum at a discount or for free to any service provider.

"Three service providers have asked for free spectrum. Even if I could give that to them, their trial period of three months will end before the infrastructure is set up to use the spectrum. Grameenphone asked for a discounted price, but presently, that is also not possible."

Adding that in such cases, the final decision will be taken by the Ministry of Finance, Mustafa Jabbar said, "As a line ministry, we can only propose such a reduction of price. We have yet to officially reply to the telecom operators.

"So, after things get back to normal, we will forward the proposal to the finance ministry and then act according to its decision."

Telecom service providers sought a reduction in price as it costs a lot of money to buy megahertz (MHz) spectrum. In the last auction for 4G technology in 2018, the BTRC fixed $27 million as the floor price for per MHz of spectrum in the 2100 band, and $30 million per MHz in the 1800 and 900 bands.

At that time, Banglalink acquired a total of 10.6MHz spectrum – 5MHz in the 2100 band and 5.6 MHz in the 1800 band – for Tk2,558 crore, while market leader Grameenphone took 5 MHz only in the 1800 band at a price of Tk1,284 crore.

Robi and Citycell did not participate in that auction.

A senior official of a mobile phone company, seeking anonymity, said, "Data consumption increased manifold during the Covid-19 shutdown that started from March 26.

"People are now staying at home and are dependent on the internet for their work, entertainment and availing emergency services. So the use of data has shot up. In such a situation we need more spectrum to cater to the additional demand."

Responding to a query, Grameenphone's Director and Head of Regulatory Affairs Hossain Sadat said allowing a discounted price for spectrum will create a win-win situation for the government and the telecom service providers.

Sadat added, "In principal, we cannot support a request for free allocation of spectrum. We are of the view that the spectrum needs can be sorted out in a win-win manner. The thought we have, is that the government can consider allocation of spectrum at a discounted price for a certain period of time.

"This way, the government would get some money (as opposed to free), and we the service provider would enhance our capability to help our customers meet their communication needs."

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

According to BTRC data, total internet use in the country was 922GBps last year and 894GBps in 2018. Until this February, the total number of internet users in the country was 9.99 crore, of which 9.42 crore were mobile internet users.

Industry insiders said that at a recent internal forum, Grameenphone objected strongly to the idea of obtaining spectrum for free, while three other service providers spoke in favour of it.

Commenting on the matter, a senior official of a mobile phone company said, "Since Grameenphone has more money, it wants to buy the spectrum, while others want it for free.

"If the government allows discounted spectrum, other telecom service providers will face trouble availing it, which in turn might benefit Grameenphone."